The best is to have the money in full but take a 100% loan!
Strange? Well the logic behind it is simple.
Current 10 year loan interest rate is about 2.45%. Usually most
banks will an interest rebate bring down the interest rate to about
2% +/- a little.
If I had the money to pay up for the car, I would use the money and
place it in a Australian acc. The current compounded interest rate
offered is about 5.4% paid monthly without any minimum sum and
minimum period. As world interest rate are poised to increase, so
will FD rates.
Based on a 100K loan for instance, monthly interest paid out will
be about 170SG (assuming an interest rate of about 2%). If the
money was put into a FD of 5.4%(currently offered by citibank AU)
you will earn about 450SG per month. This will leave you with a
profit of about 280SG per month.
Of course there are risk in doing the above.
1) currency fluctuations. (which can either go up or down)
2) Currency exchange spread. About 1.5 to 2% ( buyin Au currency
then later converting it back to SG)
But this is what I would do!
Saabster
