Cars and Loans

Readers, have you ever thought of a dream car?

I myself have one.

One day, I'd love to have a lamborghini. It's pretty much a dream because it costs around $200.000. Based on what I believe, dream will disappoint everyone who don't make effort. I'd love to have a lomborghini. But then, I don't want to make that effort to make lamborghini mine. so, in conclusion, it's pretty much a dream that maybe will disappoint me (?). Who is with me? (Ha!).

Here are some pictures of lamborghini:

Look at that hot car in a hot place at a hot day! wow.

Hi daddy. Um, can I be your daughter?

That wings-like lamborghini's door.

 As if it can transform into robot like in Transformer movie!

How can we have that dream car of ours?

If we are rich enough, we can just go to wherever car dealership, and sign random papers to buy one, with cash. But if we aren't rich enough (or if we are not that reckless), we can choose to buy the dream car by loans.

Loans by itself divided into 2, secured loan and unsecured loan. Secured loan, on one hand, has lower rates, higher borrowing limits, and longer repayment terms than unsecured loan, however you will need to pledge some of your assets to be a collateral. From there, if you are unable to repay the loan after specified time according to agreement, the lender has the right to sell the collateral you have pledged. Examples of secured loans: mortgage, auto loan, boat loan, etc. Unsecured loan, on the other hand, is more risky for the lender because there is no property or asset to recover by default which is why the rate is higher than secured loan. Examples of unsecured loan is credit card, personal loan, student loan, etc.

We can surf the internet to find loan that is the most suitable for us with the lowest APR. Check out this website (http://www.nationwide.co.uk/products/loans/personal-loans/calculator#tab:Loans calculator). On that website, we check the APR and the monthly repayment for the secured loan.

What we need to note, is that we should never spend more than 40% of our total income per year for loans. Nothing really, it's just, it is our safe area for loan. Back to the web I mention, it is so convenient, right? The thing is, I need to borrow $200.000 to buy lamborghini. The web can't show the monthly repayment because it is too big and I'll need to sign up for the web and give more detailed information. So, I'll just do it manually. 

To find my total cost of a loan= Amount of loan + (Amount of loan x APR x Number of years)

=$200,000 + ($200,000 x 10% x 10 years) = $240,000 = Rp. 3.120.000.000,00

To estimate my payment per month = Total loan / Number of months

=$240,000/120=$2000 = Rp. 26.000.000,00

OMG. Okay, anyhow, that's how it works to manually do it. I know lamborghini is expensive. But, the number still shocks me. Alright, see you in the next post!

Best of Luck Readers!