MFC Step Payment Plan
Baic Centurion offers the MFC Step Payment Plan, which is a novel solution and an alternative contract structure which allows consumers to pay reduced instalments in the beginning of their loan term, and gradually pay an increased amount towards the end of term, without having to take up a balloon.
Consumer Impact
- Benefit of paying a much lower instalment during the early stages of their ISA as compared to other structured offerings, thus creating additional disposable income.
- Not being burdened with a balloon payment which must either be settled or re-financed after paying the final instalment of the contractual agreement.
- Annual increases to the instalment are in line with basic price inflation.
- Consumers can enjoy this benefit on vehicles ranging from New and up to 3 years old .
Structure of Step Payment Plans
- Step payment Plan term will be based on age of the vehicle
- All term structures will have 3 annual instalment increases, see example
- Year 1 = 12 instalments @ 80% of average instalment
- Year 2 = 12 instalments @ 86.6% of average instalment
- Year 3 = 12 instalments @ 93.3% of average instalment
- Remainder of instalments @ 100% of average instalment (Highest Instalment)
- New vehicles will be structured over 96 months
- Vehicle age of 1 year will be structured over 84 months
- Vehicle age of 2-3 years will be structured over 72 months
- The interest rate type will be variable and linked to the prime lending rate