RHB Bank introduces a new car financing option, Vehicle Financing-i (Variable Rate) Flexi Redraw, allowing borrowers to manage their profit charges throughout the loan term. This variable-rate financing offers potential savings by enabling early and additional payments that reduce the principal amount and, consequently, the daily calculated profit charges. The flexibility to withdraw from excess payments also provides financial control. The article also features a brief anecdote about Jonathan Tan, who dreams of a classic car journey.
Traditionally, the car loan you take to finance a vehicle purchase is a fixed-rate loan. This is fairly straightforward - your interest/profit is calculated upfront based on an unchanging rate of the amount you are borrowing, spread out over your financing period. But what if you could have the flexibility to control the total profit charges throughout the loan term, much like you can with your home loan? RHB's Vehicle Financing-i (Variable Rate) Flexi Redraw offers just that.
As a variable-rate loan, the profit charges - known as interest payable in a conventional loan - are calculated based on the daily rest and reducing balance method. While it might sound like it could cost you more, variable-rate financing tends to have lower financing rates (initially) compared to fixed-rate financing. Plus, any upward fluctuation means a minimal increase given that the financed amount in auto financing is typically much less than your average mortgage. So if you pay extra, even by a few ringgit or a day earlier, you can reduce your principal amount and in doing so, reduce the profit charges (which RHB will calculate on a daily basis), giving you savings in the long run. You can also withdraw from these excess payments as and when you need to. Whenever you have more to spare (like when your year-end bonus comes in, or the business did especially well last month), why not pay more or early to lock in those savings?Jonathan Tan, however, dreams of a different kind of journey. While most dream of the future, Jonathan dreams of the past, although he's never been there. He fantasizes much too often about cruising down Treacher Road (Jalan Sultan Ismail) in a Triumph Stag that actually works, and hopes this stint here will snap him back to present reality.
CAR FINANCE VARIABLE RATE FLEXIBLE REDRAW RHB BANK SAVINGS
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