In a statement released on 26 May (Thursday), the Monetary Authority of Singapore (MAS) said that it will ease restrictions on the financing of motor vehicles from 27 May.
Loan restrictions for motor vehicles were introduced in 2013 to moderate the demand for cars, restrain the escalating COE premiums and the consequent inflationary pressures. “Since then, demand conditions have moderated and it is timely to ease the measures,” said Ong Chong Tee, deputy managing director of MAS in explaining the maximum loan-to-value (LTV) ratios and loan tenure for motor vehicles.
The new regulation would allow buyers to purchase vehicles that cost less than or equal to $20,000 to take a loan for 70 percent of the vehicle cost as opposed to 60 percent as was the case before. And those who want to buy vehicles which cost more than $20,000 would be able to take a loan for 60 percent of the vehicle instead of 50 percent, which was the cap set previously. The loan tenure for both categories has also been raised from five to seven years.
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