What's a good interest rate?

Mars

Mars

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I'm being given numbers of 14.5% over 72 months from MFC.
to me that's ballistic. The finance person says that's the going rate, and I won't get better. I've told her that it's a deal breaker.

I'm sure she is going to come back with a better number from the other banks. I know the size of the "commision" for the finance person depends on the size of the interest rate. What should I settle for?
 
Ur going through a finance person?
Applly yourself, you will get better rates. you sure they dont have the 14.5% as fixed?
its very ver high
 
Insane. I got P+1 over 54 months (ie, less interest for the buggers) in May from MFC
 
Madman88 said:
I'm being given numbers of 14.5% over 72 months from MFC.
to me that's ballistic. The finance person says that's the going rate, and I won't get better. I've told her that it's a deal breaker.

I'm sure she is going to come back with a better number from the other banks. I know the size of the "commision" for the finance person depends on the size of the interest rate. What should I settle for?
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Depends entirely on your particular credit risk profile...age of car, etc

The finance lady has probably submitted your application to all the banks and MFC is the only one willing to finance the deal.
I was caught in a situation like that when I tried to finance a 2005 car. I ended up withdrawing funds from a home loan and paid cash for the car (R95 000)
 
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A great deal depends on the amount being financed as well. They are going to screw you on rate up to about 150k, above that you should be getting close to Prime without difficulty.

Another factor is the age of the car being financed.

We are dealing with banks here and god help them if they aren't making a fat profit.
 
JungleBoy said:
Depends entirely on your particular credit risk profile...age of car, etc

The finance lady has probably submitted your application to all the banks and MFC is the only one willing to finance the deal.
I was caught in a situation like that when I tried to finance a 2005 car. I ended up withdrawing funds from a home loan and paid cash for the car (R95 000)
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Why didn't you do that anyway? And just increase your monthly payment by what it would have cost the finance the car? save yourself a decent amount.
 
Fazda said:
A great deal depends on the amount being financed as well. They are going to screw you on rate up to about 150k, above that you should be getting close to Prime without difficulty.

Another factor is the age of the car being financed.

We are dealing with banks here and god help them if they aren't making a fat profit.
Click to expand...

It's for 225 odd, and it's a Mazda 5 individual 2009. I think the finance person is taking a fat chance.
 
Madman88 said:
I'm being given numbers of 14.5% over 72 months from MFC.
to me that's ballistic. The finance person says that's the going rate, and I won't get better. I've told her that it's a deal breaker.

I'm sure she is going to come back with a better number from the other banks. I know the size of the "commision" for the finance person depends on the size of the interest rate. What should I settle for?
Click to expand...

Damn! Prime plus 5.5? That is steep...

EDIT: Whats your credit profile like?
 
Madman88 said:
It's for 225 odd, and it's a Mazda 5 individual 2009. I think the finance person is taking a fat chance.
Click to expand...

:eek: That is bloody ridiculous - the only other factor could be that MFC see you as a potential risk. Try and find out if Wesbank passed the deal or not.
 
Wow no, that can't be right - I recently got finance via ABSA for prime +0.6% (10.1% at the time). Finance amount was ~R140k. Plus, I freelance, so banks automatically hate me.

According to the lady that drew up all the documents, it helped that I went through the call-centre rather than actually going into the bank.
 
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you are being screwed over.

What i don't get with this risk dependent crap.

If you are higher risk, why impose higher interest? Is it not more likely that by you having to pay more and you might default?
 
If you are higher risk, why impose higher interest? Is it not more likely that by you having to pay more and you might default?
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I quite agree with you, but that is how the banks operate.
 
Prime atm is sitting on 9% if I'm not mistaken. They're shafting you with a big ol' jar of KY.

If I'm not mistaken your interest is a yearly figure and not once off. (i.e. you pay 9% per year on the loan)
 
Well Gill Marcus quite rightly complained about finance houses that refuse to filter down the interest rate to the "low-end" consumer. I find paying prime +whatever criminal for first time buyers or small loans. Even if "this is how banks work", does not make it right...

You should be getting prime-something....
 
I got a rate of 14% a few months ago. Quite high. Couldn't get it any lower as I didn't have any credit history.

So what happens if I default payment? They take my car? So what's the point of them charging me more if they're still going to get every cent out of me? Seems like they expect me to default after 3-4 years so maybe I should grant them their wish.
 
In the end I have settled for prime +2 from wesbank. I had to apply direct to get that, the finance lady at the dealer could/would do no better than prime +3.
 
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