Balloon Scheme 101

Published by on . Updated on 3 Feb 2023
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There is no debate when it comes to car ownership in Singapore; it is expensive. From sky-high prices to excessive tax premiums, aspiring car buyers will have to make sure their pockets are deep enough to even consider buying one.

The not-so-fun experience doesn’t stop with the initial payment of the vehicle. Taking up loans also adds on to the headache, having to set aside eye-watering amounts of money every month just to pay them off.

This could lead well into the four-digit figures, which is simply unpalatable for many folks like long-time Tokyo Century Leasing (TCL) customers Mr. K.L. and Mr. Premkumar.

But what if we told you that there is a way to get the keys to your dream car without paying through the nose for the next decade?

What Are We Looking At Here?

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A balloon scheme! It’s essentially a fixed rate hire purchase arrangement with the car being registered under your name.

Simple enough, but what makes it different from the rest? In essence, the scrap value of your vehicle will be put aside as deferred payment at the end of the loan period, which equates to a lower monthly instalment plan.

Speaking of which, the scrap value is guaranteed. This means that said value is fixed and is not subject to unexpected increases, which should serve as peace of mind at the conclusion of the loan period.

This then opens up a whole new world of possibilities for the type of vehicle that you wish to own! 

Can You Give Me An Example?

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Let’s say you are in the market for a one-year old Mercedes-Benz GLB SUV. Under normal circumstances with a hire purchase loan, you might be looking at a monthly instalment of S$2000*. That is because the scrap value is part of this payment.

But with TCL’s Balloon Scheme, this value is put out of the equation, which then reduces the monthly instalment. Now, we are looking at a payable amount only S$1600*, saving you S$400* per month till the loan ends.

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For the case of car enthusiast Mr K.L., taking up a balloon scheme from Tokyo Century Leasing (TCL) was a straightforward decision. Having owned over 20 cars over more than a decade, he believes that the lower loan amount gives him a greater amount of flexibility.

According to him, “In current uncertain times when we want more cash on hand for that heightened sense of security, taking a car loan under TCL’s balloon scheme while paying a lower monthly car installment makes absolute sense. 

My last few car loans were always with TCL and I have no negative experience with their process or operations. Even when I sold my cars, the loan redemption process with them was straightforward and fuss-free.”

*Prices are for illustrative purposes only

What if I Want to Sell My Car Off or if the Loan Matures?

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A normal hire purchase settlement is required once the loan matures. And if you plan to sell the car, you can do it anytime, with the proceeds being used to settle your outstanding car loan.

TCL has made it a fairly straightforward process should you face any one of these situations. They are able to work out an early settlement amount with interest rebates for fellow customers, and provide them with all the necessary details to ensure transparency.

What Happens if I Terminate the Loan?

A termination or penalty fee applies, just like with a normal hire purchase scheme across banking institutions. With TCL, however, the fee is competitive and in fact lower compared to other establishments.

Is It Easy to Manage My Loan?

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Clients who have benefitted from TCL also include Mr. Premkumar, who was impressed by the level of services provided. Citing fast approvals from past transactions with the institution, Mr. Premkumar has also recommended their services to other people over the last five years.

With TCL, you’ll not be swamped by delays or crunching complex numbers. They provide an online platform, where all of its services are digitised and fast for maximum convenience.

There, you can take a look at your current loans and even manage them. This means that payment and settlement can all be done from the comfort of your own home!

If you’d like to find out more about balloon schemes and the services that Tokyo Century Leasing offer, click here to watch our explainer video, drop them a call at 6532 0425, or visit their website here today!

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