Late Payment Charges?

[snaem85 1]

hi guys,

i need help to understand this. i have talked to the hdb personnel on phone, and in person.. but i still can't catch any balls. blursx! zz

my parents have not paid the monthly installment for a almost a year, and they are supposed to pay 820 per month.

therefore, the outstanding payment have chalked up to almost 20k and outstanding balance 160k.

i was looking through the mortage loan statement, and there's this 500+ per month - IM 3.82.

the hdb officer said the 500+ is the interest for the house loan. but i thought 820 already included the interest?

how do i calculate this figure? and what is this actually? btw this is their 3rd loan.

Edited June 9, 2011 by snaem85

[kliee11 0]

hi guys,

i need help to understand this. i have talked to the hdb personnel on phone, and in person.. but i still can't catch any balls. blursx! zz

my parents have not paid the monthly installment for a almost a year, and they are supposed to pay 820 per month.

therefore, the outstanding payment have chalked up to almost 20k and outstanding balance 160k.

i was looking through the mortage loan statement, and there's this 500+ per month - IM 3.82.

the hdb officer said the 500+ is the interest for the house loan. but i thought 820 already included the interest?

how do i calculate this figure? and what is this actually? btw this is their 3rd loan.

I believe 3.82 is your interest rate. Since this is their 3rd loan, they are not entitled to the HDB loan so 3.82%pa makes sense.

If you calculate, 3.82%pa interest on pricipal of $157268.28, your interest per month is about ~$500+, and since you haven't been making payments, interest will not be lower, it'll only increase over the months as your outstanding keeps rolling over.

$820 is your monthly repayment, but this repayment has two parts to it, (Principal + Interest), hence if for the month your interest payment is $500, out of the $820, $500 will go to paying off the interest, $320 will be used to pay down the Principal.

Total payment = Principal repayment and Interest repayment

$820 = $320 + $500

I'd encourage you to look to refinance out to banks, 3.82% is a very high interest to pay based on current condition.

Hope this helps.

[bepgof 20]

HDB applies 2 types of interest rates:

- Concessionary rate, 2.6%

- Market rate, 3.82%

These rates are revised every quartly.

http://www.hdb.gov.sg/fi10/fi10328p.nsf/w/UpgradeHDBInterestRates?OpenDocument

Read carefully. See calculation at end of the page there.

Monthly loan instalment amount is the sum of 2 components: "interest" + "mnthly payment towards principal"

Edited June 9, 2011 by bepgof

[snaem85 1]

I believe 3.82 is your interest rate. Since this is their 3rd loan, they are not entitled to the HDB loan so 3.82%pa makes sense.

If you calculate, 3.82%pa interest on pricipal of $157268.28, your interest per month is about ~$500+, and since you haven't been making payments, interest will not be lower, it'll only increase over the months as your outstanding keeps rolling over.

$820 is your monthly repayment, but this repayment has two parts to it, (Principal + Interest), hence if for the month your interest payment is $500, out of the $820, $500 will go to paying off the interest, $320 will be used to pay down the Principal.

Total payment = Principal repayment and Interest repayment

$820 = $320 + $500

I'd encourage you to look to refinance out to banks, 3.82% is a very high interest to pay based on current condition.

Hope this helps.

i am starting to get a hang of it.

does that mean the balance of $157268.28 shown is only the oustanding balance of principle amount, not inclusive of the interest amount?

meaning if i pay the next month installment, my balance will show $157268.28 - S$320 = S$156948.28? since u mentioned i am paying only S$320 for principal repayment and S$500 for the interest repayment.

if that is right, i think i already know the answer to my question. indeed the interest is crazy.

one last question, does that also mean the lesser my oustanding balance, the lesser my monthly instalment will be?

thanks guys!

Edited June 10, 2011 by snaem85

[therat 18]

i am starting to get a hang of it.

does that mean the balance of $157268.28 shown is only the oustanding balance of principle amount, not inclusive of the interest amount?

Correct

meaning if i pay the next month installment, my balance will show $157268.28 - S$320 = S$156948.28? since u mentioned i am paying only S$320 for principal repayment and S$500 for the interest repayment.

Correct

one last question, does that also mean the lesser my oustanding balance, the lesser my monthly instalment will be?

No.

your monthly installment will not get lesses..

Only you pay lesser interest and more $$ will pay to the principal.

I took 5 yrs to drop my mth installment ratio from 60:50 to 50:50 (Interest : Principal)

[snaem85 1]

oh okay.

now i totally get the picture already.

thanks alot! really appreciate it.