MAS to place cap on motor vehicle loans from Tuesday Feb 26

The Monetary Authority of Singapore (MAS) will place a cap on motor vehicle loans from Tuesday Feb 26.

For a motor vehicle with open market value that does not exceed $20,000, the maximum loan-to-value is 60 per cent of the purchase price, including relevant taxes and the price of the Certificate of Entitlement.

For vehicles with an open market value of more than $20,000, the maximum loan will be capped at 50 per cent.

In addition, the tenure of a motor vehicle loan will be capped at 5 years.

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."

The financing restrictions will not apply to loans for the purchase of commercial vehicles or motorcycles.

Register here to get free digital access to The Straits Times until Aug 9, 2015.
Comments