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Auto loans capped at 5 years and up to 60%

By PetrolHead on 25 Feb 2013

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Motor loans will be capped to a five year loan period in a new ruling by the MAS. Moreover, the loan-to value amount will be dependent on the OMV of a vehicle and could range between 50 60 percent.

For a motor vehicle with an OMV up to $20,000, the maximum loan value will be at 60 percent of the purchase price which includes taxes and COE. Vehicles that cost more than $20,000 in OMV will have a 50 percent loan value of the purchase price. Regardless of the loan value, the loan period is capped at 5 years for all car loans.

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In a statement on Monday, the MAS said: "The financing restrictions are necessary to encourage financial prudence among buyers of motor vehicles. In this prolonged environment of very low interest rates, there is greater risk of buyers over-extending themselves on motor vehicles."

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The newly imposed restrictions will not affect loans for commercial vehicle or motorcycle purchases and takes effect from tomorrow the 26th February 2013.

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PetrolHead
Written by PetrolHead
A passionate motoring enthusiast since little, Akram's articles gives alternative insights on the latest motoring news.



 
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