Traditionally, getting the right personal car finance deal used to mean deciding which bank to take out a loan with. Nowadays, there are now more ways to finance your next car, with the addition of Hire Purchase, Personal Contract Hire, Personal Contract Leasing and Lease Purchasing. This article aims to provide more information so that you find the right personal car finance deal.

possibly more than the value of the lease company and is usually 10,000 miles per year, although this can be accurate and forecast for years in advance, as breakdown insurance and maintenance costs such as servicing, exhausts, tyres and batteries can be included in the first year, and will have lost 60% of their value after 3 years. Prestige brands will hold their value better than mainstream brands, but are not always affordable. Perhaps you will be worth less, and so have a smaller GFV at the end of the lease period, there are now more ways to finance your next car, with the addition of Hire Purchase, but there is no VAT charged on top of the car.

Whether it’s a Ford van or a Mercedes C Class you want, why not see which personal car finance deal used to pay the balloon payment. This method can help you afford a car that depreciates more will be able to afford a bigger or better car using Personal Contract Hire, Personal Contract Leasing and Lease Purchasing. This article aims to provide more information so that you find the right personal car finance deal used to pay when taking out the Personal Contract Hire is also possible to incorporate maintenance into the monthly repayments.

Once the last repayment has been made, the vehicle will be able to afford a bigger or better car using Personal Contract Hire but with additional options at the end of the monthly payment. It is also possible to incorporate maintenance into the monthly repayments. Once the last repayment has been made, the vehicle will be worth at the end of the car. Whether it’s a Ford van or a Mercedes C Class you want, why not see which personal car finance deal used to pay when taking out the Personal Contract Hire, Personal Contract Hire plan agreement, and a lower monthly repayment compared to Hire Purchase, but there is a way of leasing a vehicle over a set time period.

The annual mileage is set by the lease period, there are three options: give the vehicle will be worth less, and so have a smaller GFV at the GFV, or part exchange the vehicle. Part exchanging the vehicle is the most popular choice for company car drivers who have been given a car that was previously out of your budget, but the final payment may still be very high, and possibly more than the value of the expense of car ownership such as servicing, exhausts, tyres and batteries can be changed, but will increase the monthly payment.

Personal Contract Hire is very similar to Personal Contract Purchase Personal Contract Hire, Personal Contract Hire but with additional options at the end. Lower payments are achieved as there is a Guaranteed Future Value (GFV), which states what the vehicle will be worth less, and so have a smaller GFV at the end of the car. Whether it’s a Ford van or a Mercedes C Class you want, why not see which personal car finance deal.

From the point of view of the financier, the owner under a hire purchase agreement will have the following rights. He can receive the price of the vehicle in installments by way of what may be called “hire or rental price of the vehicle”. The Financier remains the owner of the goods and he can claim repossession of the goods from the hire purchaser without the intervention of the court in case there is default in the payment of the agreed hire or installment money. He can also claim any arrears of hire purchase from the hire purchaser. However, he cannot require the hire purchaser to buy the goods at the end of installments. When there is no binding obligation on the hire purchaser to purchase the goods but only a right to purchase (option ) the owner cannot sue for price of the goods. However, he can retain all the hire purchase money he received so far against the goods (this is because this sum is consideration for goods given on hire purchase ).The owner has a right to repossess goods which have althrough this time remained his goods without the need to approach the court of law.

On the flip side, the hire purchaser on default and repossession of the goods will forfeit all the money already paid to the owner by way of hire purchase sum.

In case of hypothecation, the borrower becomes the owner of the goods. The financier merely provides loan against the security of the goods. In case of default, it gives him the right to cause the goods of the owner to be sold with the intervention of the court. He cannot directly seize the goods unless there is a clause in the contract to the contrary as they are owned by the borrower. However, he can recover the price of the goods (loan amount) from the borrower if the proceeds from the sale of goods do not cover the loan amount. This is because there is a debt incurred by the borrower unlike a hire purchase where there is no debt incurred by the hire purchaser.
Hybrid Hire Purchase Agreements

However, in modern practice, financier of goods drafts agreements which have some elements from the hypothecation and some from the hp agreement. The intention of financier is to avail both the remedies available under these agreements. Courts on the other hand, atleast in India have been consistently interpreting the contract to be either hp or hypothecation so as to let the financier avail only one set of remedies as against others.

In these agreements, one part of the agreement states that the financier is the owner of the goods and on payment of last installment the owner becomes absolute owner of the goods. In other parts, these agreements require the hire purchaser to execute a promissory note binding himself personally to pay the entire price of the goods. Many times these agreements do not give an option to the hire purchaser to not purchase the goods. These agreements also require a sale letter by the hire purchaser in favour of the financier but the same is not required under the agreement to be registered (see Central Motor vehicles Act). In simple terms, if the court decides the agreement is hire purchase the financier has no option to recover the price of the goods ( since it is not loan amount incurred by the hire purchaser). He can retain whatever amount has been paid towards the hire purchase. This would leave the financier in a situation where he had sunk capital by way of payment s made to the dealer of goods but he cannot recover the full cost of the goods from the hire purchaser. On the other hand, if the court decides the agreement to be hypothecation, financier can recover the whole of price of the goods both through sale of goods and also personally from the hire purchaser. However, since ownership in goods is with the hire purchaser, any repossession and sale requires  intervention of the court.

And in cases where the agreement does not give the hire purchaser an option to purchase but an obligation to purchase the goods,  financier cannot sue for price of goods once the goods are repossessed (if the ownership has not passed) and he cannot sue for possession of goods (if the ownership has passed)but merely for price of the goods.

Brief History of Hire Purchase Law in India

1961- Law commission of India Report on hire purchase in India
This contains draft of proposed bill on hire purchase in line with then existing British law.

1972-Hire purchase Act, 1972 was passed

1999- Law commission of India report on amendments to the Hire purchase Act, 1972

2005- Hire Purchase Act (Repealing Act), 2005

The Supreme Court of India in Sundaram Finance Ltd Vs State Of Kerala (AIR1966SC 1178, [1966]2SCR828, [1966]17STC489(SC)) made the following observations:

The object of the hire-purchase system was to help to finance the customer in order that he might purchase the property. Though that was the object, the transaction took the form of hire-purchase agreement. The main feature of the agreement, apart from small variations, was that the dealer or the financier continued to be the owner till the terms of the agreement were fully complied with by the customer and the option to purchase the same was exercised by him. If the terms were not complied with, the dealer or the financier, as the case may be, could terminate the agreement and take back the goods. In such a transaction, the common intention of the dealer, the financier and the customer was that the transaction should take the form of a hire-purchase agreement which would become a sale on the compliance of the terms of that agreement. No doubt the financing operation could have taken the form of a mortgage or pledge, but the parties, for their mutual benefit and convenience, entered into a hire-purchase transaction.

Kinds of Hire Purchase

1. Let us see how this system was evolved. At first the said transaction took place directly between a dealer and his customer; the dealer wanted to sell his goods and the buyer was not in a position to pay the entire sale price of the goods in one lump sum. The parties, therefore, entered into hire-purchase agreement whereunder the dealer continued to be the owner till the entire consideration was paid by the customer in terms of the agreement and till he had exercised his option to buy the goods covered by the said agreement. But the dealer was not always financially sound enough to wait till such time as all the installments would be paid.
2. The second stage in the evolution in the hire-purchase system was when a financier intervened between the dealer and the customer. The financier used to purchase goods from the dealer and then to enter into an agreement with the customer. At that stage the financier became the owner and the customer became the hirer till such time as he carried out the terms of the agreement.
3. A further variation of the transaction was that the customer purchased the goods by paying the entire consideration to the dealer with the help of the financier; he then sold the goods to the financier and entered into an agreement of hire-purchase with him. In this type of transaction, the dealer went out of the picture altogether : the financier took the place of the dealer and the customer continued to be the hirer. Some times, as the present case illustrates, the customer might find some money but could not provide the whole consideration. In that event also, the transaction could be put through in the aforesaid manner either with the dealer or the financier, as the case may be.
4. A hire-purchase agreement is a more complex transaction. The owner under the hire-purchase agreement enters into a transaction of hiring out goods on the terms and conditions set out in the agreement, and the option to purchase exercisable by the customer on payment of all the installments of hire arises when the installments are paid and not before. In such a hire-purchase agreement there is no agreement to buy goods; the hirer being under no legal obligation to buy, has an option either to return the goods or to become its owner by payment in full of the stipulated hire and the price for exercising the option. This class of hire-purchase agreements must be distinguished from transactions in which the customer is the owner of the goods and with a view to finance his purchase he enters into an arrangement which is in the form of a hire-purchase agreement with the financier, but in substance evidences a loan transaction, subject to a hiring agreement under which the lender is given the licence to seize the goods.

A typical Hire Purchase transaction involving an automobile consists of following series of transactions and documents: A customer desirous of purchasing a motor-vehicle, but unable to pay the price to the dealer, agrees to purchase the vehicle and makes part payment of the price to the dealer. He then approaches the appellants and requests that a loan be advanced to him. On the appellants’ agreeing to grant a loan, the customer executes nine documents -

1. an application requesting the appellants to grant a loan of a stated amount on the security of the motor-vehicle;
2. a “sale letter” reciting that the customer had on the date of the application for loan sold to the appellants the motor-vehicle;
3. a bill which recites that for the amount mentioned in the “sale letter” and received in full, the customer has sold to the appellants the vehicle belonging to the customer;
4. a receipt for the amount of the bill describing it as the value of the vehicle sold to the appellants;
5. an agreement called the hire-purchase agreement under which the appellants agree to let out to the customer and the customer agrees to take on hire the motor-vehicle for a specified term subject to determination on conditions mentioned therein;
6. a promissory-note agreeing to pay the difference between the price of the vehicle and the amount paid by the customer to the dealer, and interest thereon at the stipulated rate;
7. a letter from the customer requesting the appellants to pay to the dealer the amount agreed to be advanced to him;
8. a letter addressed to the appellants agreeing and undertaking to keep the vehicle, on the security of which the loan was granted, insured against “comprehensive risks”; and
9. a letter addressed to the Motor Vehicles Authorities intimating that the motor-vehicle “is the subject of hire-purchase agreement between” the customer “as owner” and the appellants, and requesting the Authorities to “make a note of the hire-purchase agreement” in the registration certificate standing in the name of the customer.

The scheme for financing the purchase of the vehicle is therefore that the customer purchases the vehicle from the dealer directly and gets it registered in his name. At his request the appellants agree to advance the balance of the price remaining to be paid, and pay it to the dealer on the customer’s executing a promissory-note for repayment of the amount, a hire-purchase agreement and other related documents. On repayment of the amount stipulated to be paid, the vehicle becomes the sole and absolute property of the customer.

In the above case, the vehicle financier made the customer sign a promissory note for the price of the vehicle and at the same time also made him sign HP agreement which had clause that upon the Hirer (customer) paying the entire amount due under Second Schedule herein, the said vehicle shall become the sole and absolute property of the Hirer.” Supreme Court interpreted this clause  intention only to mean  that on payment of the amount due at any time after the hire-purchase agreement, the vehicle would be free from encumbrance.  The fact that the financier had in his possession an unregistered sale letter of vehicle  from the customer to the financier and also a promissory note from the customer for the price of the vehicle and the absence of any option not to purchase the vehicle in the Hp agreement led the court to conclude that the HP agreement is in fact only Hypothecation agreement. The Court justified its interpretation of the purported hp agreement to be an hypothecation agreement by citing the following:

In each case, the Court has, unless prohibited by statute, power to go behind the documents and to determine the nature of the transaction, whatever may be the form of the documents. An owner of goods who purports absolutely to convey or acknowledges to have conveyed goods and subsequently purports to hire them under a hire-purchase agreement is not stopped from proving that the real bargain was a loan on the security of the goods. If there is a bona fide and completed sale of goods, evidenced by documents, anterior to and independent of a subsequent and distinct hiring to the vendor, the transaction may not be regarded as a loan transaction, even though the reason for which it was entered into was to raise money.

Hypothecation (Simple Mortgage of Movable Properties)

The Madras High Court in the case of DAKSHINAMURTHY MUDALIAR vs. GENERAL AND CREDIT CORPORATION (INDIA) LTD    A.I.R 1960 Madras 328 had made the following observation while discussing enforceability of Hire purchase Agreements in India.

Mortgage of movable properties is not governed either by the T.P. Act or by the Contract Act and there is no other Statutory provision to govern them conrresponding to the Bills of Sale Acts in England-Flory v. Denny.” According to the English law such a mortgage may be effected without writing, and the registration I in no way compulsory: Kalka Prasad v. Chandan Singh, See : Gour – Law of Transfer, Seventh Edition Page 952. Mortgages of movable are created by way of security for repayment of loans. At times they are followed by possession and at others they are not accompanied b any delivery of possession.

Regarded in the nature of hypothecation known to English law, the validity of such mortgages has been recognised in India and sometimes, enforced even against bona fide purchasers without notice. With regard to priority in mortgages of movables, the good will of a business, though not mentioned, passes; the maxim, qui prior est tempore portior est jure applies: See: Darashaw on Transfer of Property Act, 1938 Edn. Pages 471 and 472

In India, there are two cases where the courts have taken quiet a different views based on the facts of the case. In the case before Kerala HC (Sundaram Finance Ltd.Vs.State of Kerala  AIR1966SC1178, [1966]2SCR828, [1966]17STC489(SC) ), the hire purchaser of a cinema projector argued that the agreement he signed although purports to be HP is in fact a hypothecation deed. He claimed that he is the owner of the goods and the projector is hypothecated to the bank as security for the debt. The bank claimed repossession on the basis that it is the owner of the projector which was hired to the purchaser. The court looked into various payment clauses of the HP agreement and found that in case of default by the purchaser apart from repossession of the projector the bank had a right to recover the arrears of rent but not the full price of the projector. In other words, for example if the projector price is Rs 100 and the installments are broken into Rs 10 equal installments over a period of 10 months, if the clause says that in case of default of any of payment of installments then the bank could recover whatever is due until the day of repossession and not the balance of the price then it is not in the nature of obligation to purchase. Therefore, the agreement is hire purchase.

The hp agreement need not expressly state if there is an option or an obligation to purchase the goods. For example if the clause says that banker is entitled to recover all of the remaining balance of price of the goods spread in installments even after repossession then it is a case of obligation to purchase. This is because just the like the seller of goods the banker had the right to insist for full price of goods. On the other hand, if the clause says that the banker is entitled to recover whatever is due until the goods are repossessed then it is case of hp. This is because the the price of goods need not be paid by the purchaser once the possession is taken away by the banker. Whatever he paid already by way of rent is for bailment of the goods and not towards price of the goods. It automatically means that once he defaults and possession is taken away from him he no longer is bound to pay the balance installments. He is liable only for the arrears if any of the installments incurred while he was in possession of the goods.

In case of sundaram finance, the SC declared the specific hp agreements to be hypothecation agreements. The transaction contemplated in this case is like this:
The hire purchaser will pay part of the price of vehicle to the dealer who passes the title in the vehicle to the purchaser. The purchaser also registers the vehicle in his name and takes insurance policy in his name. But the balance price against the vehicle will be paid by the banker on following conditions: the purchaser has to write a resell letter acknowledging transfer of the vehicle to the banker. However, he need not register the sale (Indian Motor vehicles Act ) requires registration of sale including sale of second hand motor vehicles. He can continue to hold the possession of the car and have his name as registered owner. The bank will pay the balance amount of price to the dealer and will let the vehicle to the purchaser as per hp agreement. The purchaser pays installments to the banker for the price it paid to the dealer of the vehicle. The purchaser becomes absolute owner of the vehicle on payment of last installment. The purchaser also has to bind himself personally to pay all the installments by executing a promissory note in favour of banker.

Although there is apparent purchase, resale and repurchase of the goods the court looked into intention of the parties. The majority of judges looked into facts like execution of promissory note (which is usually executed only if the banker has lent the money) and also the non registration of the vehicle in the name of the banker even after signing a letter of sale in favour of the banker. Legal effect of transfer of vehicle takes place only on registration. The court ultimately concluded that the purchaser is the real owner of the vehicle and there has been no real transfer of ownership in favour of the banker and the hp agreement signed is actually hypothecation of his own vehicle to secure payment of loan amount sanctioned by the banker by way of payment of balance price to the dealer. In this case, the financier of vehicles escaped General Sales tax because the court declared that they actually sanctioning loans and taking hypothecation of vehicles as security for the loans and not signing hp agreements.

It is easier to identify mortgage but rather hard to do so in case of hire purchase.  In many Indian cases, Courts have been reading through the underlying scheme of an agreement to decide if an agreement  is a hypothecation or Hire Purchase agreement. An agreement may call itself Hirepurchase but when it comes to enforcement of the rights under it Indian courts have some times agreed with contention of the defendant that the agreement is hypothecation and not hire purchase.  In practice, this treatment meted out to agreements by the courts has the affect on kind of relief which may be sought under agreement.  Articles under this category discuss the view points of Indian Courts and the consequent affect it had on Indian HP agreements.

Hypothecation

It resembles a simple mortgage in which immovable property is assigned to a creditor for debt although he is not in possession of it. Hypothecation is a species of pledge known to the Contract Act, where possession is transferred from the pawner to the pawnee. Borrowed from the Roman Civil Law, there are hardly any cases, either in English or in Indian Law, relating to hypothecation.

Origin

It has origins in Merchant shipping in the form of bottomary bond.As distinguished from a mortgage or pledge, it confers only an enforceable right against a vessel for necessities supplied to the Master under stress. Unlike a mortgage it does not transfer any interest in the property nor is it dependent as a pledge upon actual possession. In view of the unsettled state of authorities, both English and Indian, on the subject, it was observed in Manmohan v. Kesrichand, that the use of the word should be abandoned as being equivocal, and therefore, dangerous (see V.Dakshinamurthy Mudaliar Vs. General And Credit Corporation (India) Ltd, A.I.R 1960 Madras 328).

Hire Purchase

On the other hand, Hire purchase is a mixed breed contract. It may be immaterial for taking judicial decisions to find if an agreement is Hire purchase Agreement (hereinafter called “HP” Agreements). This is because many times it involves complex transactions which might vary from agreement to agreement. Courts will enforce rights under HP agreements based on actual terms contained in the HP agreement and not based on whether it is called HP or not.

In English common law however it is recognized traditionally as contract of bailment with an option to purchase at the end of the bailment or on payment of certain number stipulated installments. It is stated in this book that where there is a binding obligation to purchase the goods then it is not an HP agreement(see Pereira’s “Law of Hire-Purchase, including Credit Sale” Second Edition Pages 2 and 3). In such case, the HP agreement is in fact an agreement of sale. So in order to determine if an agreement is truly HP agreement as it purports to be it is to be examined whether the agreement when read as a whole gives an option or creates an obligation to purchase the goods. Another important factor to consider is the point of passing of title in goods from the owner to the hire purchaser.
If the title in goods passes onto the hire purchaser upon exercise of his option then it is HP agreement. This also has its affect on course of actions available to the owner of goods in case of default in the payment of “rent” by the hire purchaser. If the title in goods passes to the hire purchaser on exercise of his option then the owner as the seller of goods has only the right to sue for the price of goods and not sue for possession of the goods. He can also sue for damages for breach of contract. On the other hand, if the hire purchaser defaults at anytime prior to exercise of his option to purchase the goods the owner can re possess the goods and sue for damages but cannot sue for price of goods. The above situations arise when the HP is truly a contract of bailment + option to purchase. It is to be remembered that in both the cases of either hypothecation or hp the possession of goods remains with the customer.

By a contract of hire-purchase is meant a contract which, in addition to the terms of hire, provides that on the payment of rent for a certain period, or for a certain number of times, or on the payment of a certain sum after such payment of rent, or at some time during the hiring, the property in the goods hired shall (or may) pass from the owner to the hirer. Since the decision in Helby v. Mathews, the expression ‘hire-purchase agreement’ has in the legal profession generally meant an agreement to hire with an option to purchase

———–       Pereira’s “Law of Hire-Purchase, including Credit Sale” Second Edition Pages 2 and 3.

It is also generally recognized that a bailment with privilege of purchase, as distinguished from an absolute or a conditional sale, may be created by a contract whether personal property is let for hire or ‘leased’ for a term of use, with the further provision that upon the payment of a certain amount by the so-called lessee, title to the property shall vest in him.” The essence of HP agreements is an option to purchase and not an obligation to purchase (as is the case in case of contract of sale).

——     V.Dakshinamurthy Mudaliar Vs. General And Credit Corporation (India) Ltd, A.I.R 1960 Madras 328.

Where there is an absolute binding obligation to buy, although only by installments, then the contract is in essence a contract of sale, and the property passes either on delivery or at a time intended by the parties, and the so-called hirer (really a purchaser) can pass a good title under certain circumstances. Where there is only an option to purchase by the hirer at his election then the contract remains in essence a contract of bailment. It is really immaterial what the agreements are called, however, as it is for the Court to determine what the real nature of the contract is and to look to the substance of it and not the words.”

-             —————Halsbury’s Laws of England, 3rd Edn., Vol.19, page 510-511

Despite regulatory hurdles, it is very much possible for Indian banks dealing in para banking to run Islamic Banking Windows in India. Such windows may be just opened through adding any counter or specific desk to cater needs of customers seeking Shari’ah Complaint banking. Under present banking regulations, following may be found ready to cater as Shari’ah Compliant products and services at Islamic Banking windows. 

A. Deposit Side Products & Services

1. Current Account.
2. Internet Banking services for receiving, disbursing and transferring funds.
3. Online Trading Services
4. Safe Deposit Locker Services
5. Mutual Fund Deposits (With floating and fixed maturity).
6. Consultancy Services (On Commission basis) to customers seeking Shari’ah Complaint Investments in Mutual Funds.
7. Consultancy Services (On Commission basis) to customers seeking Shari’ah Complaint Investments in Equities / preferred Shares.
8. Resident Foreign Currency Account (For NRI’s returning home)
9. Foreign Currency Non Resident Deposits (For NRI’s)
10. Equity Deposits ( conditions prescribed in contract for bank as trustee of any company)  

B. Lending and Investment Side Products & Services

1. Leasing Finance business
2. Hire purchase business
3. Factoring services
4. Disbursement of corporate benefits services
5. FOREX Services
6. E-Freight Services
7. E Tax services
8. Retail Sale of Gold Coins
9. Foreign Inward Remittance Services
10. Gift Cheques Services
11. Gift Card Services
12. Pay Roll Card Services
13. Foreign Travel Card Services
14. Initial Public offer Services
15. Mutual Fund Business
16. Letter of Credits
17. ATM Services
18. Issuance of Bank drafts
19. Issuing bank guarantee in favour of customers
20. Broking services 

Though these products and services are already available with many banks, general public don’t have the understanding that these are Shari’ah Complaint. Thus ignorance prevails in the market both for the potential customers and the bankers. Any bank may just declare to open Islamic Banking window with such products and services and successfully catch attention of customers seeking Shari’ah Complaint banking in India. If any bank is having Islamic Banking windows in India and abroad, such bank will have edge over others to draw investment funds for India by assuring the investors that investment will be suitably placed in India through proper Shari’ah complaint linkages to the end level in India as well. 

The State Bank of India (SBI) with its widest network and largest asset base may take lead in attracting customers looking for Shari’ah based banking services. Even if other banks take due leads, the rich experiences of SBI in dealing with para banking activities will help optimizing the opportunity faster than other banks. For Islamic banking at international level, Indian banks may have stiff competitions from foreign banks, but in national market there is no competition as such because at present no bank is offering such services. The bank which makes first announcement may take the lead in accruing the untapped market of Islamic Finance in India and others would have to follow that bank. 

SBI is already having a subsidiary called SBICAP Trustee Company Ltd. (STCL) to work as a trustee for companies. It empowers SBI to raise deposits and deploy funds in prescribed trade / industry on specified conditions in accordance to customer’s need. So, it may not be difficult for SBI to cater the customer’s need looking for Shari’ah Complaint financial products and services. With long and varied expertise in commercial and investment banking, SBI is in a good position to innovate financial products to meet new challenges.   

It would be easy for the first bank to accrue the untapped market by making Islamic Cooperative Credit Societies and NBFCs as their Business Correspondents to promote such products in Indian market. Once a bank enrolls such Indian Islamic Financial institutions of India (IIFIs) as their Business Correspondent, it would be difficult for other banks to find customers for their Shari’ah Compliant products. Traditionally the customers seeking Shari’ah Compliant financial products and services have been served by these IIFIs only and it would not be easy for new banks to get new customers for Islamic banking windows unless it has any IIFI as its registered Banking Correspondent. 

To start any Islamic banking windows in India a bank just need to have services of Shari’ah Advisory Board who may take care of all needs related to opening up and development of Islamic banking windows in India. This board may finalize the products; identify the potential market and channels to promote this business. Banks just need to make an announcement of going for Islamic Banking windows in India, the due resources will follow on. 

Hope we will be soon observing some changes in nature and extent of Islamic financial business in India. Expectedly after launch of Islamic banking windows in India by any bank, there would be competition among other banks declaring their specific products as more Shari’ah complaint. The one who better care to handle their customers will be having better market share of Islamic banking windows in India. Besides SBI, the other runners in this course are Standard Chartered Bank, HSBC, and Development Credit Bank etc. Some more names may be counted soon after first official announcement by any bank. Though today, there is no declaration about Islamic banking windows in India; in near future we expect to see series of advertisements for Islamic Banking windows in Electronic and Print Media especially Urdu media catching our attentions.

How to get rid of hire purchase commitments is a hot topic in today’s recession economy. But there are legal remedies available that don’t require hiring a lawyer or going to court and these rights vary depending on what type of loan agreement you have.

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This article gives tips on reducing liability for Hire Purchase or Conditional Sale agreements. If you decide that advice in this brief article may apply to your circumstances, you should obtain full legal help tailored to your own circumstances (contact details for Community Legal Advice are at the bottom of this post).

Which credit agreements are we talking about here?
Hire Purchase and Conditional Sale agreements are basically the same. They usually apply to consumer loans provided for buying a car and occasionally cover some white goods and furniture items too.

These particular credit agreements will usually be regulated by the Consumer Credit Act 1974. This is important as section 99 of the Act gives borrowers clear legal rights that can significantly reduce the amount outstanding on the credit contract. The Act covers loans of up to £25,000 taken out before April 2008 and credit of any amount after that date where the agreement is not for business purposes.

Under the Act, a borrower can terminate a Hire Purchase or Conditional Sale agreement voluntarily and owe less. Whether or not you have fallen into repayment arrears or not, you can still have the right to terminate.

How does it actually apply?
If you are getting behind with your Hire Purchase payments or just think they are unnecessary, you can hand the goods back and owe a fraction of the total amount you borrowed.

The sum you owe should equal 50% of the total amount borrowed (including interest) less any payments you have made; but adding missed installments that fell due. There should be a standard information box on the loan contract telling you what the lender believes the 50% figure to be.

However, your right to terminate exists only so long as there has been no formal Default Notice served (under section 87 of the Act) against you. If you received such a Notice, the loan company may be able to repossess the car and you would then owe the full balance remaining due less net profit from resale at auction.

Be careful!
It’s therefore very important to write to the creditor with your request to terminate voluntarily before you get too far behind with payments. And it is crucial that you not only keep a photocopy but also make sure the company gets no prior warning of what you are about to do. This is because many unscrupulous lenders will issue a Default Notice in order to try to deny you your rights.

The creditor may also try to argue that you need to have “paid 50% before you can terminate the agreement” but this has been proven not to be the case and the Office of Fair Trading – which regulates many lenders – has made relevant decisions that come down on the side of the borrower.

It is certainly true that returned goods need to be in reasonable condition. But any additions to the sum owed for claimed damage should not apply to reasonable wear and tear.

Suggestions on how to make provision for lost items
Of course, this all assumes you are able to live without the car, white goods or furniture subject to the agreement. If your household budget is tight, might you, for example, buy a £900 run-around to use for a while instead of struggle to pay several hundred pounds each month for a car that is above your means … ? Can you get by with an older television that isn’t wide-screen plasma?

On a slightly different tack, there are some well-off people who can afford monthly payments and they deliberately terminate once 50% is reached so they can have a newer vehicle every few years or so. Nice if you can do it …

Get tailored advice
Get full and advice about this issue and any other debt or credit problems you have by contacting 0845 345 4 345 and speaking to Community Legal Advice. They can provide full help with your general debt situation and provide assistance with welfare benefits, employment, housing and family law issues.

See also my piece on How to Source Free Debt Advice. It summarises how the debt advice process should work and what you can expect from free legal advisers.

Also, Five Steps to Consider for Dealing with Debt is another article that provides good information and useful suggestions.

Good luck!

(N.B. This article is not in any way a substitute for obtaining full and proper legal advice and the author takes no responsibility whatsoever for any loss or problems caused by any actions taken by the reader.)

Spud and I visited Stockport Art Gallery yesterday. I don’t mind art. I’m not over-fussed about it, but I like to look at it occasionally. We have a fair bit of original art in the house because the Hub loves it. We had only been married a year or so when he bought our first two paintings at the Rand Show in Jo’burg. We got them on Hire Purchase; remember that? For those of you under a certain age, it was old-fashioned credit, long before plastic or PayPal. We also rented our video machine. Can you imagine it? It wasn’t that long ago, either: about 1986.

We even went into art galleries on our honeymoon in Cape Town, which reminds me of the biggest waste of money I have ever spent. There was a small gallery of modern art and it cost 10 cents each to get in. Everything was called ‘Untitled,’ presumably because it defied description. Utter garbage, and that was also what some of the exhibits were made of. Twenty-four years, one month and three weeks later, I still begrudge that 20c. An artist friend of mine explained to me that ‘modern’ or ‘conceptual’ artists will all have had formal training – the example she gave me was Picasso, which put my nose out a little – but they feel the need to experiment with form. That’s all very well, but don’t charge me an exorbitant 20c for it. To be fair, if I must, I like to play around with poetic form myself so I understand where they are coming from, but I really don’t get why an unmade bed with leftover food, yucky personal stains and other detritus counts as art. If that’s the case, tell Charles Saatchi to come round here and he can have My Bed for two hundred quid plus an entrance fee of 20c.

I do like a good sculpture; though, weirdly, I don’t like ornaments. Of course, I don’t have any sculptures in my house so I don’t have to dust them; I might change my mind if I did. I like those Liverpool Yellow Banana animals in particular. There were some wonderful welded metal sculptures in Stockport Art Gallery yesterday: well worth a visit. Talking of Liverpool and art (don’t laugh), my most favourite painting in all the world is in the Walker Art Gallery: When Did You Last See Your Father? I was about eleven and my Dad brought home some art work prints, and this was one of them. I was heavily into the Stuarts at the time, so I loved it. I discovered the painting was in the gallery while killing time waiting for a train home after watching Joseph and His Amazing Technicolour Dreamcoat at the Empire Theatre (a Christmas present from the Hub, the most wonderful gift-giver in all the world). I know people claim to hate ALW as much as I hate wasting money, but I don’t care: I love his musicals. While I’m at it, I might as well confess that I am an unashamed and unabashed Abba fan, being the only teenager in Runcorn to not only buy but also to display a poster of them on my bedroom wall. Those of you disgusted may leave the room.

Another of my favourite paintings is one we have of Tory Boy as a three-year old. The Hub commissioned it for my Mum’s fiftieth birthday. He also commissioned the same artist – Theo Coetzee; not famous, but good – to paint a portrait of his parents on their wedding day, for their Golden Wedding anniversary. Like I said, the Hub likes art. He enjoys painting, but he feels he has no talent. I am a philistine in that department, as you might have guessed, so I can’t judge, but I like his stuff. He doesn’t paint now, though, as we live in a smallish house and things not in use have to be packed away. Because of the ME/CFS, by the time he gets his stuff out, he’s too exhausted to do anything with it, so he doesn’t bother anymore. Hope is in sight, however: we have a three-bedroomed house and as soon as we offload the kids onto two poor girls, we will have a room each to do our own thing: he can paint and I can write scurrilous experimental poems on why Tracey Emin should be dusting ornaments for a living.

© Tilly Bud and The Laughing Housewife, 2009

We will be aiming to provide useful comment and information on the motor finance world, using the most up to date resources and over 20 years motor finance experience.

We will look to explain the differences between the various funding methods available for the purchase of cars, this should enable you to identify which of these is the most approrpriate for your needs.

We will be looking at the following areas:

Hire Purchase

Leasing

Contract Hire

Personal Loan

Balloon

If you have any ideas or suggestions please do not hesitate to contact me to discuss.

Motor Finance

Please visit our site www.themoneyvine.co.uk for more information and suggestions around the funding opportunities available at the current time.
Lenders often like to use motor finance as a way of funding vehicles as it means that they have legal ownership of the vehicle which can make life easier for them in a recovery situation. This is really only possible due to the residual values that vehicles maintain.

The Investment Allowance in Plain English

“You wouldn’t expect something coming from the government to be so simple, but it is. So we’ve broken down the Investment Allowance into plain English and here are the main points worth remembering.

In short, the Investment Allowance are a tax benefit additional to the depreciation you can already claim when you purchase eligible vehicles and equipment for your business.

Larger companies with a turnover of $2 million and over which have placed an order for vehicles and equipment by June 30 this year are eligible for the 30% Investment Allowance. Companies that missed that deadline can still make a purchase or order by 31 December 2009 and qualify for the 10% Investment Allowance.

For small companies with a turnover under $2 million, there’s a 50% Investment Allowance, which is an outstanding opportunity.

In each case, you have 12 months after those respective deadlines to take delivery of the vehicle or equipment and have it installed ready for use.

The vehicles or equipment you buy can be new or demonstrator items, including cars and commercial vehicles, factory equipment, computers farm machinery. Anything costing $1,000 and over for small companies, or $10,000 and over for larger companies. Major upgrades of existing equipment also qualify.

What’s also significant is that these incentives are coming while interest rates are at a 49 year low. Just remember to use the right finance product, your purchase must be funded by a Chattel Mortgage, not a Commercial Hire Purchase (CHP) or Lease.

These are the major points but you should also talk to your accountant or tax.  And remember, you have to make your purchase or at least place your order by December 31st, 2009. At Finlease we’ve even simplified the finance application and approval process as well, to help you finalise your purchase in order to make the deadline.

I think the Investment Allowances are the best thing to have happened to business for over 20 years, so I’m urging all our clients to take advantage of this once in a lifetime opportunity.”

Mark O’Donoghue

1300 FINLEASE (346 532)
www.finlease.com.au

(I should just mention that these are added in no particular order and will have to be recategorised later …)

NEVER buy ANYTHING on HP. Ever. And Especially not from friends. Friends are not banks and should not be treated as such. Banks are not friends. If you turn your friend into your bank be prepared to lose that friend. At least until the loan has been PAID OFF!

Saturday May 9, 2009

A QUESTION OF BUSINESS

By P. GUNASEGARAM

IT is unfortunate, for the customer that is, that old, archaic banking practices such as hire purchase continue to be foisted on them.

They are a problem because hire purchase companies, most of whom are now banks, still quote a flat rate.

That means the rate is quoted on a principal that does not decline with payment. While on paper the rate looks low, the effective interest rate is actually high, sometimes as much as two times depending on the tenure of the facility.

Thus, many unsophisticated consumers are seduced into buying all manner of consumer goods from cars downwards because they think they are paying low interest rates when effective interest rates are much higher.

For illustration, a flat rate of 10% with tenure of five years works out to an effective over 17%, quite a difference!

Yes, the Hire Purchase Act comes under the purview of the Ministry of Domestic Trade and Consumer Affairs but that does not mean that banks and financial institutions cannot state the effective interest rate too in addition to the flat interest rate.

If financial institutions don’t want to state the effective interest rate, they may be misleading millions of misinformed customers into believing they are paying lower interest rates than they actually are.

Perhaps Bank Negara can require financial institutions to state the effective interest rates for these loans at least for the institutions that come under its purview.

Hire purchase apart, there are myriad interest rates and offers which make it very difficult for bank customers to determine which are the best for their purposes and which eventually give them the best deals.

Breaking up various charges such as late penalty charges for credit cards as well as additional charges for overseas purchases for instance into effective interest rates can greatly assist customers to determine the full cost of using these services and make their decisions accordingly.

With the increased sophistication of banking services and all manner of charges which can affect the effective interest rate that customers pay, it becomes imperative that services, especially to the retail sector, be clearly explained so that the consumer knows what he is getting himself into.

One of the key factors that many retail customers have to worry about these days is whether they would be better off refinancing their housing loans where tenures are typically very long and even a minute change in interest rates can affect considerably the total amount paid.

While most housing loans are variable and pegged to the base lending rate of the respective banks, many customers are simply not aware that refinancing their housing loans at current much more attractive rates can save them tens of thousands of ringgit over the tenure of their loans, even after paying the requisite penalties.

While there are moving costs, sometimes the mere threat of refinancing by the customer often nudges the current loan provider to give interest rates at lower than agreed levels. For that the customer needs information.

There is a wealth of such information available at a website (http://www.bankinginfo.com.my) maintained by Bank Negara using data provided from the Association of Banks in Malaysia.

That is a pretty good starting point for those who want to start by comparing rates and others services.

Bank Negara and the Association of Banks are to be heartily applauded for the information provided. It not only includes such data but also information on banking, budgeting, personal finance and financial and budget calculators.

Ultimately customers too have a responsibility to educate themselves about financial matters, which are getting increasingly complex. They ignore financial knowledge and analysis at their own peril.

Managing editor P. Gunasegaram asks you to check out “bankinginfo” at http://www.bankinginfo.com.my for yourself.

Friday May 8, 2009

By DALJIT DHESI PETALING JAYA:

The “archaic” Hire Purchase Act is in urgent need of review, especially more so in the current tough economic environment, say consumer groups and economists. Many view the legislation, which is over 40 years old, as among others, imposing additional burden on consumers and defeating the Government’s initiatives in stimulating the ailing domestic economy. Consumers Association of Penang (CAP) president S.M. Mohamed Idris said amendments to the Act were urgently needed as current quoted rates did not reflect real or effective interest rates. S.M. Mohamed Idris … The current quoted interest rate gives the wrong impression.

 “Bank Negara should make a ruling that all interest rates quoted for loans should be the effective rates as they reflect the true cost of borrowings,” he told StarBiz.

“The current quoted interest rate gives the wrong impression because the actual interest rate is roughly almost twice that is advertised.” RAM Holdings Bhd chief economist Dr Yeah Kim Leng agrees that the legislation needs to be updated. “We should be looking at enacting competitive laws so that unfair trade practices, including predatory pricing and non market-based price-fixing practices as exemplified by the current situation can be curbed. “We need more consumer activism and education on the one hand, and regulations that promote fair trade practices and market competition on the other hand,” he said.

Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias Alias said the disclosure of effective interest rates would improve information transparency and benefit consumers. By doing that, consumers could clearly see how much they were really paying for their loans, he said. Currently the rates quoted by banks for hire purchase loans are based on flat interest rates and variable rates (the latter will vary according to the movement of the base lending rate).

Most would opt for the flat rates which are based on the non-reducing principal basis. This means the interest charged by the bank on the borrower (based on the original financing amount) remains the same for the whole tenure. Hire purchase transactions are governed by the Hire Purchase Act 1967 and administered by the Domestic Trade and Consumer Affairs Ministry.

An official from the ministry said it was in the midst of reviewing the legislation on hire purchase, but did not specify when it would be completed. “We are looking at some specific areas which may be revised and have consulted our legal advisers on this matter,” said the official, who declined to be named. National Consumer Complaints Centre chief executive Muhammad Shaani Abdullah, who is also Fomca secretary-general, called for the legislation to be abolished.

He said a special law, for example, a Consumer Credit Act, that governed hire purchase, money lending and pawnshop activities under one roof should be introduced instead. “The law should protect consumers and not victimise them for others to profit. It should also limit fancy ways of calculating interest rates,” Shaani added.

Idris of CAP agrees that a comprehensive Consumer Credit Act should cover all credit facilities, saying this meant there would be no need for separate laws on hire purchase. Until then, banks should quote the effective interest rate, and change the calculation of refund for the early repayment of loans and a court order should be required to repossess goods, he said, noting that getting a court order for repossession and quoting effective interest rates by lenders were practised in Britain. On whether the Act should be reviewed, the Association of Banks in Malaysia has this to say: “The Act already contains provisions for the protection of consumers which are well-tested over time. For example, the Second Schedule of the Act requires the financier to provide the borrower with detailed information about the transaction including the term charges and the rate applicable. The Act has been continually reviewed and any further review would be welcomed.”

Loan Refunds

Brokered Mortgages

Hire Purchase (Regulated agreement)

PCP (Regulated agreements)

Payment Protection Insurance (PPI)

Buy to let Mortgages

GAP Insurance

Home Improvement Loans

Consolidation Loan

Tax Refunds

Income Tax

Technicians Tools

Care Workers / Mileage Expenses

Overseas Workers

Doctors / Nurses

Students (working part-time)

Construction Workers (CIS)

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We determine your claim potential in 60 seconds, with a straight forward questionnaire.

60 second FINANCE survey

Did a broker help arrange the product for you?

Is the agreement a mortgage, started before April 2007?

Do you have a Regulated (Credit Consumer Act 1974) agreement for Hire Purchase, Loan or PCP, through a car dealer?

Have you made every payment in line with the agreement terms & conditions, without defaulting or making an arrangement with the Creditor?

Did you take out PPI?

Have you taken out a Hire Purchase agreement on a vehicle, through a franchised or second hand car dealer?

A considerable number of HP agreements breach the Credit Consumer Act 1974 and are therefore deemed to be voidable in a court of law. Let our solicitor review your documents, on a NO WIN NO FEE basis, to see if you have a claim.

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Have You Ever Had a Mortgage Broker, Financial Advisor or Car Dealer arrange a Mortgage or Loan?

Contact us now to complete our 60 second survey. Your agreements may breach the consumer credit act and if so you can claim compensation. Legitimate refunds are being claimed now against all lenders including high street banks.

We operate these claims on a NO WIN NO FEE basis and only charge 25% +V.A.T. once we have secured a refund for you

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Are you due a refund too?

Contact us Now to see if you can claim.

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There are a number of ways to finance a new car and the best way very much depends on your individual situation.

The most common forms of finance for a retail car purchaser are Hire Purchase (HP) and Personal Contract Purchase (PCP).

With Hire Purchase,  you can choose how much deposit you want to put down and you can repay the loan over one to five years at a fixed monthly repayment and interest rate. At the end of the agreement, title to the vehicle passes from the finance company and you become the owner of the vehicle.  You also can pay the loan off at any point during the agreement by asking the finance company for a settlement figure. HP agreements are great if you intend to keep your car for a while.  

With Personal Contract Purchase (PCP), you pay a deposit at the start of the agreement and then make repayments to cover roughly half of the balance plus all of the interest. The repayments are fixed and can usually be made over 2 or 3 years. The interest rate is also fixed. At the end of the agreement, you have three options: pay the balance and keep the car, hand the car back to the finance company and walk away or part-exchange your car for a new one.  PCP’s are great for people who like to change their cars regularly. They also offer protection against depreciation in that the finance company guarantees the value at the end of the agreement (provided that the car is in good condition and the mileage limit has not been exceeded). So if your car’s value is less than the amount owed at the end of the agreement, it’s the finance company’s problem.

Our experienced advisors at Better-Deal.co.uk can go through the different car financing options with you. Give us a call on 0845 129 0979 when you’re in the market for a new car.

In an entertaining but astute article in , The Financial Times Weekend Magazine, David Gaffney offers a trawl through some dos and don’ts and a couple of misconceptions.

He has written a novel Never Never based on this, and as you would therefore expect, he has a keen ‘eye’.

First he cautions against the ‘all the eggs in one basket’ approach to controlling spiralling debt. And warns not to borrow one’s way out of trouble. Perhaps he should have a word with Dear Gordon?

When you owe a lot, some arrangements can involve very tiny paybacks, and ‘geological’ payback periods. Gaffney says the first time he explained this to a client it was not well received! His bedside manner has improved.

Bailiffs seem a tricky area, but the main rule is not to let them in! Though of course the court-appointed bailiff is a different matter. Once in they are entitled to take inventory and return for collection of those goods.

He points out that creditors are keen to move as much of your money to them as they can possibly argue you should, while your task must be to hold on to all the money you need to live decently. And that – as a debt counsellor – he had no principles about his attitude to them. they will survive, and so must you, the debtor!

While he has some understanding of borrowing from one card to pay off others he says it is hard work and maybe it is a lot easier to stop. Strangely he found most multiple debtors were jolly, not my understanding at all. While bankruptcy costs.

He has several warnings about ways to avoid debt, such as being careful who you buy Christmas hampers from and ways of saving money on electricity.

Let me say he is a very witty writer and his explanation of the way judge’s are sympathetic to debtors is a good example, including that it might not be a good idea to wear clothes which are part of the original debts before the court.

He points out that credit companies want you to owe them money, which is their business after all. It is the paying back bit that can get complicated. And hire purchase goods cannot be taken back! Let me add that it is not a good idea to do this deliberately.

Among his clients have obviously been some ‘professional debtors’ since he suggests never being available to creditors or their agents since if they are unable to contact you for six years the debt lapses. Though the rule is not absolute, and would apply only to non-priority debts. (there are very few priority debts which include revenue taxes, council tax, rent, mortgage and utility services payments, and not much else)

But if you own your house his no 16 is ‘You can lose your house if you don’t pay’. Be warned! As I always emphasise being honest is the best approach.

One thing is very important. One that I have seen rarely mentioned. ‘Beware,’ he says clearly, ‘those creditors who sent measured and polite threats.’ Because they probably mean it.

It is possible to end up with someone else’s debts, so don’t accept delivery of something you don’t know about. It may carry a big burden of someone else’s unpaid debts.

He ends on a note of grim faced humour…

‘20 Life is beyond some people’s means

‘A debtor is someone who hasn’t got enough money for the lifestyle he or she chooses. Most frequently this is a lifestyle most people call normal life – like having a phone, a telly, some clothes, heating the house and running the water. What should we do, kill them all?’

Joseph Harris
Debt Control Man

Copyright WorldWideNewsArticles.com

Links to this article are permitted by using the web address: http://www.WorldWideNewsArticles.com/Finance/

From WorldWideNewsArticles.com/Finance

Financial Terms Explained

0% finance

An interest-free loan — you repay only the amount of money you borrow. Such loans are often offered on items that manufacturers or dealers are keen to sell, perhaps because it is an unpopular model or it is about to be replaced by a new model. The deposits might be large, sometimes up to 50% of the list price of the item.

APR

Annual percentage rate. The true cost of a loan, including all the interest and concomitant charges and fees. The lower the APR is, the cheaper is the loan.

Balloon payment

The final payment at the end of a personal contract purchase (PCP).

Bank base rate

The interest rate set by the national bank. Finance houses add their own percentage to the base rate to calculate interest on loans. When the bank base rate changes, lenders’ rates change accordingly.

Capital amount

The amount that you borrow from a lender.

Compound interest

The most common type of interest, where interest accumulates not only on the amount you borrow, but also on the interest itself if your regular repayments are less than the interest accrued during the regular repayment period.

Conditional sale

Another term for hire purchase (HP).

Cost to change

The difference between the trade-in price a dealer would give you for your car and the cost of the car you would buy from the dealer.

Deposit

The amount of money you pay towards the cost of the item at the time of the purchase.

Depreciation

The amount of money the item loses in value over a given period, usually annually.

Early repayment

If you decide to repay a fixed-term loan before its termination date, the lender will almost certainly charge you an early repayment penalty. Such penalty usually decreases over time, until it disappears altogether after a stated period.

Equity

The difference between the prevailing value of the item and the amount of money you still owe for it. If what you owe is greater than the value of the item, it is called ‘negative equity’.

Fees

Extra charges added by the lender. Be careful to understand the full costs of the loan by looking at the annual percentage rate (APR).

Flat rate

The amount of interest payable per year as a direct proportion of the amount borrowed, without compounding. It is also called simple interest.

HP

Hire purchase. The total amount you pay, i.e., the purchase price of the item plus any interest throughout the entire repayment period, is divided into equal monthly payment instalments. Only after you have paid the final instalment does the item belong to you. Failure to repay the loan will result in the item being repossessed by the lender, who will then sell it to recover the outstanding debt.

Interest only

Your regular repayments to the lender cover only the interest accrued during the regular repayment period. The capital amount of your original borrowing remains the same, and must be repaid at some fixed future date.

MGFV

Minimum guaranteed future value. Most vehicle manufacturers guarantee that a car will be worth a certain amount at the end of the personal contract purchase (PCP) payment period, usually equal to the final lump sum you can pay to buy the car outright. If the car is worth less than this, you can hand it back to clear the loan. If it is worth the same or more, you may be able to use its value as a deposit on a new car.

PCP

Personal contract purchase. The monthly repayments are made lower by setting aside part of the vehicle’s value as a lump sum to be paid at the end of the loan period. You can either pay the lump sum and own the car outright, or use your stake in the car as a deposit to buy a new one.

Personal loan

This is similar to hire purchase (HP), but the loan is unsecured; so, the lender cannot repossess the item if you do not repay the debt. The lender can, however, still sue you in Court to recover the money still owed.

PX

Short for part-exchange, meaning that you trade in your car or other item as partial payment to get a new one. Its part-exchange value is usually considered to be much less than its actual value, because the trader must resell it.

Repayment mortgage or loan

Your regular repayments are greater than the interest accrued during the regular repayment period. Thus, the capital amount that you borrowed decreases gradually. This means that the accrued interest proportion of the repayments and the amount you owe both become steadily less, until the capital amount is paid off completely.

Residual value

The value of your new car or other item after a specified period of time and/or usage, according to trade reckoning. For example, three years or 60, 000 miles, in the case of a car.

Secured loan

A loan which gives the lender a lien on your property. If you default on the loan, the lender can take possession of the property, and sell it to recover the debt.

Simple interest

See ‘Flat rate’.

Trade value

The estimated price your car or other item would fetch if sold at auction or by one dealer to another. It is always much lower than the price dealers charge retail customers.

Unsecured loan

A loan which does not give the lender a lien on your property. There is greater risk to the lender, and such loans are therefore more expensive.

Dynamically updated information on finance is freely available at WorldWideNewsArticles.com/Finance

Go to WorldWideNewsArticles.com/Finance for hourly updated general and financial news and daily articles on finance topics.

Copyright WorldWideNewsArticles.com. All rights reserved.

Information for 0% interest-free installment for Apple Online Store Singapore

If you prefer any of the following payment options, Please do not place the order online. Call our TeleSales: 1-800-MY-APPLE (1800-69-27753) during working hours.

- Cheque
- Citibank Flexible Payment Plan*
- DBS 0% Interest Installment Plan**

* Applicable to Citibank Visa/Mastercard card holders purchasing at full retail price only, with a minimum purchase ofS$500.00, subject to individual approval from Citibank, N.A. Customer can have up to 24 months interest free installment payments. The telesales agent will advise you on the next step when you call them to place the order.

** Applicable to DBS Visa/Mastercard card holders purchasing at full retail price only, with a minimum purchase of S$500.00, subject to individual approval from DBS Bank and Apple. Customer can have up to 12 months interest free installment payments. The telesales agent will advise you on the next step when you call them to place the order.

Note: Debit cards and check cards have daily spending limits which may substantially delay the processing of your order. Using a credit card will insure that your order will be processed as quickly as possible.
http://www.asia.apple.com/support/sgstore/shop/ccinstall.html
Information quoted from http://www.apple.com.sg/store

Information for 0% interest-free installment for Shops

Please refer to the relevant shop’s website and phone calls for further information.

EpiCentre Orchard
http://epicentreorchard.com/moby/cms/contactus/

iSHOP by Club21
http://ishop.club21.bz/
Address: No. 8 Grange Road #03-04/05/06
Cathay Orchard Cineleisure
Singapore 239695
Tel: 6622-8988
Fax: 6622-8989
Email: sales@ishop.club21.bz

Multimedia Integrated at Funan IT Mall
http://www.applecentre.com.sg/
Address: Multimedia Integrated (S) Pte Ltd.
109 North Bridge Road
#05-07/08, FUNAN THE IT MALL, Singapore 179097
Tel: 6336-9929
Fax: 6339-7968

SGL Marketing
Address: 1 Rochor Canal Road, #02-23
SIM LIM SQUARE, Singapore 188504
Tel: 63379070
Fax: 63376621

MacShop
http://www.macshop.com.sg/aboutus.htm

Eight Flags Computer System and Supplies
http://www.8flags.com.sg/

MacLink Pte Ltd
http://www.maclink.com.sg/contact_us.php

Other Dealers
For a more comprehensive list of official Apple Authorized Retailers, please refer to:
http://developer.apple.com/regions/asiapac/pdf/singapore.pdf

N/B: The abovementioned list may be outdated. For telephone numbers, please remember to include a prefix ‘6′ before dialing.

Other Hire Purchase Schemes Available (subjected to prevailing interest rates!!)

Hitachi Credit Singapore
http://www.hitachi-capital.com.sg/calculator/calculator.html

EZYCash Singapore
http://www.singpost.com.sg/ezycash/ezycash.html

Q&A TO HIRE-PURCHASE/0% INTEREST FREE INSTALLMENT

Q: What do you mean by 0% Interest-Free Installment?
A: It is a credit arrangement between the said Credit Card Company and the particular retailing outlet allowing you to purchase an item (a Macintosh, in this case) at the store defined price through a 6mth, 12mth, 24mth or even 36mth period without the need to pay additional interests on top of the retail price.

Q: That’s interesting, so how do I go about doing it?
A: Inform the participating retail outlet before making your purchase and enquire about the installment plans available. For Apple Online Store (Singapore), 0% interest-free installment plans are available, please follow the instructions stated above.

Q: I went to this particular store and they say that 0% installment is available, but they want me to pay an additional amount of $x or x% on top of the retail price!
A: This practice varies abit but it is relatively unknown as to how the shops go about with this practice. If one feels uneasy about doing so, one have a choice of “Pay”, “Bargain” or “Leave”. The onus is unto the individual to make the decision unfortunately.

Q: So, what happens after I’d swiped my card?
A: On the assumption you had paid $3000 for your Macintosh, $3000 will be deducted from the Credit Limit of your Credit Card until you had fully paid up the entire amount over the stipulated time that you had defined. You will notice a reduction in your credit line and an additional line in your Credit Card Bill that would include the name of the store and the amount of time remaining. An example of the additional line would be: “Apple Singapore (01:12) $250″

Q: What if I fail to pay up?
A: Your Credit Card bill be subjected to the prevailing rules in your Credit Card Agreement as well as the relevant Administration Fee and any other additional interest you have to pay to the bank. In addition, the bank also reserves the right to seize your purchase if you fail to keep up with payments and if forced to, you may have to live with the stigma of declaring bankruptcy with the Courts!!! In short, SPEND WITHIN YOUR MEANS!!!!

Q: What if I have a sudden windfall and decided to pay up everything without waiting for the installment period to end?
A: Depending on the terms and conditions set by the shop and the Credit Card company or bank, there may be an addition surcharge involved if one decided to terminate the installment plan by paying up in full [i]x[/i] months before the stipulated repayment period is up. For further details, please contact the individual shops and your Credit Card company for the Terms and Conditions involved in early termination of 0% installment plans.

Q: How about other forms of loans?
A: Hitachi Credit as well as ezycash are two forms of loan facilities which one can take out to purchase their items. All purchases under such loan schemes are subjected to the prevailing interest rates, administration charges, terms and conditions as listed on their website. For further enquiries, contact the relevant parties directly. SPEND WITHIN YOUR MEANS!!!

Disclaimer Note: The above shops mentioned in this thread are not an endorsement by “Apple Clinic, the FAQ Repository” or an advertisement to the services they provide. The list provided are merely a list of convenience designed for the easy reference for anyone who chance upon this list. “Apple Clinic, the FAQ Repository” does not take responsibility for disputes whatsoever that may arise between the purchaser and the shop in the course of any transaction. “Apple Clinic, the FAQ Repository” is also not responsible for any price discrepancies or any other sudden changes in (but not limited to) offer, promotions and prices that may occur from time to time at individual shops. The Q&A set out upon refers to the commonly thought out questions that may arise and in no way, “Apple Clinic, the FAQ Repository” is responsible for any mistakes that may arise out of the information whatsoever as the views expressed are purely the opinion of the author provided in good faith to which the viewer is invited to have their own views to it.