Car loan in Singapore faces restrictions

The Monetary Authority of Singapore (MAS), had on 26 Feb 2013, imposed restrictions on loan in Singapore for private cars, as a preventive measure to prevent borrowers from overextending their financial capability in repaying loan in Singapore.

The new measure cap the amount of car loan in Singapore that 1 can take based on the OMV of the vehicle. The maximum tenor of a car loan in Singapore is now set at 5 years too.

The maximum amount of loan in Singapore one can take for a car with an OMV of SGD20,000 or less, will be 60% of the car valuation, while the maximum amount of loan in Singapore for a car with an OMV of more that SGD20,000 will be 50%.

The new restrictions for vehicle loan in Singapore apply for new and used car, but is not extended to commercial vehicle or motorcycle. For re-financing of loan in Singapore, only the cap on loan tenor applies.

MAS had, in a bid to allow used car dealer to clear off their inventory, temporary eased restrictions for car loan in Singapore for used cars registered under the Land Transport Authority’s Temporary Transfer Scheme (TTS) as of 4 March 2013.

MAS said it is continuing to monitor developments in the car market and Certificate of Entitlement (COE) premiums. It will recalibrate the financing restrictions for new and used cars loan in Singapore when appropriate.

The curbs on motor vehicle and residential property loan in Singapore will be extended to licensed moneylenders from 6 April, said a statement from the Ministry of Law. It said a new licence condition was issued to moneylenders on Friday

 

 

 

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