Explainers
Refinancing Rules
Borrowers can refinance their motor vehicle loan up to the full outstanding amount and a maximum tenure of (7 minus X*) years or for the duration of the COE validity if they meet the FI’s credit assessment.
The same calculation applies to new or used motor vehicles.
| Date of agreement to purchase | Maximum refinancing loan | Maximum tenure |
|---|---|---|
| Before 26 Feb 2013 | Up to full outstanding amount | Up to validity of COE |
| On or after 26 Feb 2013 | Up to full outstanding amount |
7 minus X* years |
*X is the number of years since the motor vehicle loan was first disbursed.
Example 1
Mr Tan took a loan with a 50% LTV limit and 5-year tenure to buy a new car in June 2013. He may refinance his loan up to the full outstanding amount 3 years later in June 2016, if he meets his FI’s credit assessment.
Maximum tenure: 4 years (i.e. 7 – 3 = 4).
Example 2
Ms Lim took a loan at 100% LTV and 9-year tenure to buy a new car with a COE validity of 10 years in June 2012. She may refinance her loan up to the full outstanding amount 4 years later in June 2016, if she meets her FI’s credit assessment.
Maximum tenure:6 years (i.e. 10 – 4 = 6)
Example 3
Ms Lim took a loan at 100% LTV and 6-year tenure to buy a used car with a COE validity of 8 years in June 2012. She may refinance her loan up to the full outstanding amount 4 years later in June 2016, if she meets her FI’s credit assessment.
Maximum tenure: 4 years (i.e. 8 - 4 = 4)