MAS Lifts Car Loan Guidelines
The Monetary Authority of Singapore (MAS) announced that from today (22 January 2003), it will be lifting its 1995 car loan guidelines which restricted the maximum financing for the purchase of a car to 70% of its purchase price, including the price of its Certificate of Entitlement (COE), to be repaid over a period of not more than seven years.
Car loans form a small proportion of financial institutions' total loan portfolio, and the level of non-performing car loans is also low. The lifting of the limits on car loans is therefore in line with MAS' shift from a one-size-fits-all supervisory approach to a risk-focused approach.
MAS expects financial institutions to continue to uphold prudent lending standards that take into account the credit worthiness of the borrower, his/her debt servicing ability and the value of collateral when assessing car loan applications.
Car loans form a small proportion of financial institutions' total loan portfolio, and the level of non-performing car loans is also low. The lifting of the limits on car loans is therefore in line with MAS' shift from a one-size-fits-all supervisory approach to a risk-focused approach.
MAS expects financial institutions to continue to uphold prudent lending standards that take into account the credit worthiness of the borrower, his/her debt servicing ability and the value of collateral when assessing car loan applications.
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