I have been receiving spam from SingPost for the longest time and mostly, it's almost always about this ezycash thing they offer together with GE. Not content with delivering mail, SingPost has long since jumped onto the bandwagon of ripping people off offering loans (and we all KNOW it's a highly lucrative business from how the Wall Street executives either get paid huge bonuses for doing great work, or get paid huge bonuses so that they will stay and fix the mess they created in the first place).
Whilst it is inevitable that there will always be people willing or naive enough to pay a whopping 1/3 of a loan in interest (e.g. borrow $6,000 and pay back a total of $9,000), my gripe has always been the opportunistic manner in which leading establishments in Singapore feed on this need for materialism among Singaporeans.
In any case, this week I saw yet another pamphlet proclaiming that I could take a 36-month loan and not have to pay the last installment amount. Out of curiosity, I wanted calculate what this 'amazing' difference would be and looked closely at the illustrative figures.
Well, I laughed out when I spotted the Freudian Slip (see below). Perhaps the fact that they are charging exorbitant interest for their unsecured loans led them to unconsciously reflect the fact that borrowers pay way more than they need to?
Just for your information, whilst the monthly installment of $238 for a $6,000 loan may sound reasonable, $238 x 35 months (even without having to pay the last installment) is $8,330 - that's a 38% premium of the loan itself! In other words, you spend the first 10 months servicing the interest of your loan.
Also, for any loan, take note that the last installment will likely be less than the monthly amount (being the balance). If you're lucky, it will be close to the monthly amount but if you're not, it could very well be just a few dollars - enabling the good people managing ezycash to laugh (even more) all the way to the bank!