Full Settlement Car : Is It Worthy to pay ?

I just received a letter about loan account statement from Hong Leong Bank. The loan account statement is my car loan for end year 2014 period.
It show that I’ve balance RM19,021.08 for my loan account. I’ve pay about RM500 per month and by doing this I need to paid around 38 months onward to settle the car loan.

It means, 3 years to face this loan before I could free from this debt. If possible, I want to do full settlement. Do you know what is full settlement ? If you make any loans, you must know this term.

What is Full Settlement ?

logbook loan

Full settlement loan means that we paid full loan before the end period. You can get rebate from debtor when paid lump sum as full settlement.

Advantages & Disadvantages of Full Settlement

Advantages of Full Settlement
– You will pay less than you would otherwise have to if you were to repay the full amount of the debt.
– Settle your loan early before the agreement times.
– You could save early especially for the total amount of interest.

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Disadvantages of Full Settlement
– You need access to a lump sum which could be used for other purpose such as invest.
– Once your creditors know that you have access to a lump sum, they may not accept your offer and may take enforcement action against you to recover the all of the debt.

Download this spreadsheet to calculate your full settlement loan.
The spreadsheet is not really accurate. Refer to your bank for more accurate full settlement amount.

I just get some advantages and disadvantages of full settlement. In my opinion, I will go to full settlement if I’ve enough money. I don’t like to wait to pay loan every month. Hopefully I’ve enough money to full settlement next year. Pray for me and help me by support yourfinancialblog.com.

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