For a few days, my colleague and I talks and speak each others opinion as one of my colleague decides to buy a used car and asking us for car financing.
Some people believe that you need to dump a lot of cash for down payment. Well, my colleague did think that way. So he planned to pay up at least 10k for the car’s downpayment. From his plan, he will apply for personal loans to finance car down payment then use hire purchase loans for the rest of car financial.
Personally, I didn’t agree with the idea since he will end up with loans with more interest. Personal loans charge minimum 10% interest rate. Some banks charged more than that. Then hire purchase loans itself charge higher interest for used car maximum 4% interest rate.
So it’s not worth to have loans with 14% interest rate. I advised him pay only minimum on downpayment and only take hire purchase since it only serve 4% interest rate. That will save a lot of his money from paying more for banks.