Raffy's How To Win In Life

Amortization and Interest
We all dream of buying our own house or that nice car. Such purchase is no joke and requires a lot of money so before jumping into a decision just because of a promo offer or discount, here are some things that you need to consider.

In general, you may find your loan option fall under these four categories. Depending on your financial capacity, you need figure out the right balance between down payment, monthly payment, and interest.
1. High down payment, high monthly payment, low interest
2. High down payment, low monthly payment, med interest
3. Low down payment, high monthly payment, high interest
4. Low down payment, low monthly payment, higher interest

Remember that no matter how good a deal is, the price of a property will NOT change. Ask for the amortization schedule and you'll see how much you really have to pay.

Quick Tips:
1. Plan ahead of time, big purchases requires preparation. Start saving money a year or two before your planned purchase
2. Always ask for the effective interest rate and use that to compare between your options
3. Housing loans usually don't have a fixed interest rate and changes every 5 years
4. When buying a house or condominium, take into consideration the monthly homeowners dues
5. When buying a car, take into account the annual insurance and car registration plus your monthly gas allowance, parking fee, and maintenance
6. Cash loans have higher interest rates

For car loan computation, you may try BPI Auto Loan Calculator: https://cal.bpiautoloans.com/loan-calculator/bpi

For house loan, you may try BPI Housing Loan Calculator: https://cal.bpihousingloans.com/loan-calculator/bpi-family-housing-loan

Alternatively, you may use your Pag-IBIG benefit to get a housing loan. Here's a sample interest table:
1 Year 5.500%
3 Years 6.500%
5 Years 7.270%
10 Years 8.035%
15 Years 8.585%
20 Years 8.800%
25 Years 9.050%
30 Years 10.000%
For computation and requirements, you may visit this website: http://www.pagibigfund.gov.ph/amort/