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Any hubbers can assist or advise on financing a new bike?


blinx
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Holy crap, 20% with prime at the level it is at the moment? ????

I thought there was a maximum interest rate .... thinking of limitations on micro lenders ....

 

 

So a quick google shows:

 

ABSA - upto prime + 17,5%

 

Old Mutual - upto 25,5% ....

 

OUCH !!!!

 

 

WHERE will these go when the prime rate edges up again ....

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I don't even need to read this thread beyond page 1. Seen it all before, if you have to finance a bike, you can't afford that bike.

 

But it's not binary. There's more flavours than financed bike and walking.

 

Buy a bike in your budget range

Did you finance your house? Your car?

Why did you buy a house or car within your budget?

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Owning a house and a car are a necessity but a bike is a luxury.

Not for everyone.

There are people out there that has house and bike as necessity.

Even some that has a checker trolley as a necessity.

 

Depends on what angle you are looking at it

 

OP. Try to not finance the bike using the bike finance companies, rather look at credit card (then put the card away and dont use it, just pay it off like a loan) 

Or personal loan, or overdraft.

 

If you have any savings somewhere try not to use it. Try and get a loan for the same amount as your savings or close to it. 

Why would I say this? Your saving is earning (very little lets say 4%) you get a loan / overdraft you are paying lets say 12%.

 

Now where in this country can you get finance for 7% and at the end of your loan period you still have your capital :-)

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not to get personal, but it never makes sense to borrow money against 20% interest if your savings are accumulating at < 10%.

 

Self-financing is always cheaper than what any institution can provide you with, that's the  fundamental mechanism through which banks make money.

 

let's do some math:  I'll pick R60k (it's a multiple of 12 for easy calcs) .  You borrow 60k to buy a bike with a loan agreement to pay off in 12 months.  At 0% interest, you would pay back R5k each month.  At 20% interest, you need to pay back R5581 instead of R5k.  By the end of the year you have now paid R67k.  (over 36 months that number would be R82k).

 

if you had R60k and saved that at an optimistic 10% interest / growth, you would have ~R65k after 1 year

 

Scenario 1:  Borrow money.  You pay installments of R67k.  On your investment you've made R6k on your R60k investment, so you've got R66k at the end of the year.

 

Scenario 2:  Self-finance.  You paid cash for your bike and start saving from scratch, however you put the R5580 towards your investment every month.  At the same interest / gain you now have R70k in your investment account after the year and you've given nothing to the bank, so you've got R4k more after the year and you have your bike

 

 

 

 

 

Not for everyone.

There are people out there that has house and bike as necessity.

Even some that has a checker trolley as a necessity.

 

Depends on what angle you are looking at it

 

OP. Try to not finance the bike using the bike finance companies, rather look at credit card (then put the card away and dont use it, just pay it off like a loan) 

Or personal loan, or overdraft.

 

If you have any savings somewhere try not to use it. Try and get a loan for the same amount as your savings or close to it. 

Why would I say this? Your saving is earning (very little lets say 4%) you get a loan / overdraft you are paying lets say 12%.

 

Now where in this country can you get finance for 7% and at the end of your loan period you still have your capital :-)

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not to get personal, but it never makes sense to borrow money against 20% interest if your savings are accumulating at < 10%.

 

Self-financing is always cheaper than what any institution can provide you with, that's the  fundamental mechanism through which banks make money.

 

let's do some math:  I'll pick R60k (it's a multiple of 12 for easy calcs) .  You borrow 60k to buy a bike with a loan agreement to pay off in 12 months.  At 0% interest, you would pay back R5k each month.  At 20% interest, you need to pay back R5581 instead of R5k.  By the end of the year you have now paid R67k.  (over 36 months that number would be R82k).

 

if you had R60k and saved that at an optimistic 10% interest / growth, you would have ~R65k after 1 year

 

Scenario 1:  Borrow money.  You pay installments of R67k.  On your investment you've made R6k on your R60k investment, so you've got R66k at the end of the year.

 

Scenario 2:  Self-finance.  You paid cash for your bike and start saving from scratch, however you put the R5580 towards your investment every month.  At the same interest / gain you now have R70k in your investment account after the year and you've given nothing to the bank, so you've got R4k more after the year and you have your bike

Agreed the nubmers work. However most people who is sitting on 60k did not save that up in one year.

 

More than likely saved it at R2k per month over a few years. Thus they are not going to be able to affoard the R5500 "saving"

 

Financing anything is never a good idea, but sometime the only alternative.

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Understood, however the principles remain the same and the effect only worsens over 36 months (R2276/month).

 

Scenario 1 gives you R80k in your savings account after 36 months (financing the bike instead of using savings)

 

Scenario 2 gives you R95k in your savings account after 36 months, so the difference is R15k (self-financing; i.e. using your savings to buy the bike and saving up your monthly installment over the same time period)

 

Agreed the nubmers work. However most people who is sitting on 60k did not save that up in one year.

 

More than likely saved it at R2k per month over a few years. Thus they are not going to be able to affoard the R5500 "saving"

 

Financing anything is never a good idea, but sometime the only alternative.

Edited by rudi-h
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Not for everyone.

There are people out there that has house and bike as necessity.

Even some that has a checker trolley as a necessity.

 

Depends on what angle you are looking at it

 

OP. Try to not finance the bike using the bike finance companies, rather look at credit card (then put the card away and dont use it, just pay it off like a loan) 

Or personal loan, or overdraft.

 

If you have any savings somewhere try not to use it. Try and get a loan for the same amount as your savings or close to it. 

Why would I say this? Your saving is earning (very little lets say 4%) you get a loan / overdraft you are paying lets say 12%.

 

Now where in this country can you get finance for 7% and at the end of your loan period you still have your capital :-)

OP above advice is good

 

If you lend the money it is your ding, only yours.

Regardless of which route you take, just make sure you ride the damn bike alot! If you ride the bike alot and your life, health, mental health and enjoyment improves, then a bit of interest is negligible. 

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Wesbank. A salesman at big BS once told me 90% of their bicycle sales are financed. OP asked how he can finance a bicycle, not financial advise.

In that case he should buy at least a R200k bike and make it worth the loss he'll make.

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Owning a house and a car are a necessity but a bike is a luxury.

maybe the question should have been - did you finance your Merc, BMW, Land Rover, Jag? Those are not necessities yet people finance them all the time.

 

A house is a different class of purchase. Shouldn't be mentioned in the same context as cars, bikes, holidays, etc.

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Did you finance your house? Your car?

Why did you buy a house or car within your budget?

hey Quagga, i though you were extinct, but maybe it's just your line of reasoning that is out of date.

 

Ja, I financed my first house.

I could have bought a very fancy bicycle with the deposit I paid on it.

Instead the capital growth was decent enough that i could buy an even nicer one 15 years later. (also financed).

 

I could rather have just stayed renting a house and bought a SWorks Fact III Epic 26er 3x9 XTR with Juicy 7s. That would be worth a frikken fortune now.

 

 

 

 

If you have any savings somewhere try not to use it. Try and get a loan for the same amount as your savings or close to it. 

Why would I say this? Your saving is earning (very little lets say 4%) you get a loan / overdraft you are paying lets say 12%.

 

Now where in this country can you get finance for 7% and at the end of your loan period you still have your capital :-)

 

This has got to be the worst financial advice here.

I assume you live in a place like this and drive a car like that

117146982_668581197346866_76905813588661

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