Dear Sir/Madam
LIFTING OF LIMITS ON CAR LOANS
1 MAS' guidelines on car loans, which restricted the maximum financing for the purchase of a car to 70% of its purchase price (inclusive of Certificate of Entitlement) and maximum tenor of the loan to 7 years, are lifted with immediate effect.
2 Accordingly,
(a) Paragraphs 1(b), 3 and 4(a) of MAS' Circular on Unsecured Credit Facilities to Individuals and on Car Loans dated 10 Feb 95 (CIR No. L2/95) are hereby cancelled, and the reference to "car loans" in paragraph 4(b) of that Circular deleted; and
(b) Paragraph 2(c) of MAS' Circular on Unsecured Credit Facilities to Individuals and on Car Loans dated 15 Feb 95 (CIR No. L3/95) is hereby cancelled.
3 Notwithstanding the lifting of the restrictions on car loans, life insurers are expected to continue to exercise prudence when extending loans for the purchase of cars, taking into account the credit worthiness of the borrower, his/her debt servicing ability and the value of collateral. For avoidance of doubt, car loans are subject to the guidelines on unsecured credit facilities to individuals specified in the Circulars referred to in paragraph 2 above.
Yours faithfully
LOW KWOK MUN
EXECUTIVE DIRECTOR
PRUDENTIAL POLICY DEPARTMENT
PRUDENTIAL SUPERVISION GROUP
