We will now find it harder to get our car loans approved, following measures taken by banks beginning two months ago which includes checking the applicant’s credit ratings with 3 different sources before considering approval.
An applicant’s credit ratings will go through a financial rating check by Bank Negaras Central Credit Reference Information System (CCRIS) as well as two private credit rating agencies – Credit Tip Off Service Sdn Bhd (CTOS) and Financial Information System (FIS) Sdn Bhd. The applicant’s MyKad number, occupation, salary, existing loans and other details will be keyed in. CCRIS will provide the borrower’s repayment patterns, spending habits, credit card and electronic transaction records for the last 10-20 years. CTOS and FIS will provide credit standing information with other banks.
Once this information is gathered, credit ratings will be assigned. A – automatic qualification, B – can be considered, C – rejected but possible appeal, D – rejection is final. If an applicant does not get an A rating, but instead gets a B, usually a higher interest rate or less margin of credit as well as shorter repayment period will be offered because of the higher risk of repayment default by the individual. However in the current market situation, banks usually only give loans to applicants with A credit ratings, of course this depends on which banks you’re dealing with.
Proton and Perodua will likely suffer because of this, as those that buy Protons and Peroduas are usually of the low to low-medium (this sounds like describing how I want my steak done) income bracket, and some have other loans on hand like house loans – thus not having a strong credit rating! People are already reluctant to buy new cars because they get very low unattractive prices for their used cars, now they face another problem – getting a loan to buy a car to replace their traded-in used car.
With all these barriers put before us, does a car scrapping policy look feasible to implement anytime soon? :)
Looking to sell your car? Sell it with Carro.
oh boy, thank god i just got my satria neo prior to the adjustments done by bank , i say the malaysians are getting poorer and poorer each day, sad
And the rich get richer ….
(Only rich dudes can get A rating anyways …)
yeah, poor. But still high in taste. Our lifestyle changed, but the salary volume didn't change. With so many policies, It would end our lifestyle with rat race. Huh.
I know I belong to A-rating but where to check my own rating huh?
How come these private agencies can access my records? Invading privacy and can use it for bad intentions.
I would say that's good. Only buy what you can afford. If you're credit rating's bad, that clearly means you have some financial issues yet to solve, and as such, it would be prudent to avoid going into further debt before you clear them up.
"CCRIS will provide the borrower’s repayment patterns, spending habits, credit card and electronic transaction records for the last 10-20 years. "
Ah Paul… don't la scare ppl… CCRIS will only reveal the last 12 months' info la :)
I just bought an 11 year old Nissan AD Resort and the bank quoted me 6.75% interest simply because I don't earn much and running my own company which is less than a year old.
Nevertheless… I didn't apply much… just RM 15k for the next 4 years. This is a work car and will never be up for sale. Just fix it and run again. Luckily, it's a carbie car – nothing much to fix.
this seems to be, rich man can get loan approved easier (low interest) & poor man can get loan approved even harder (high interest)..
therefore, rich become richer, poor become poorer…
Rich man sure will never buy p1 & p2, but poor man can't get loan approved for p1 & p2…
Poor man then buy cheap cheap 2nd hand car, If G later implement car scrap policy… then..don't know wat will happen later on..
maybe poor ppl will gantung leher, p1 & p2 will gulung tikar…
This loans new barrier is in tandem with the movement of interest rates, especially impact from US and ever rising oil prices. Manipulation of interest rate is a major monetary policy adopted by G to control the circulation of money – an increase in interest is to encourage saving. Thus, to "cool" down market demand (sometime speculative in nature) for certain goods and services in order to control inflation.
Back to rating A to D by CCRIS and CTOS on the potential borrowers, this is part of banking institution to assess the risk involved in giving out loans. Bank is private sector and they are doing biz as well, so it is part of risk management excercise to minimize NPL. I am in the opnionion that if this exercise carry out in professional and objective manner, no one shall complaint but definitely those in "B" rating standing has to bear extra cost in the form of additional interest charges.
Look like in this Auto industry, the players – banks (giving loan), car manufacturers (products), the G/NAP (regulators) decide anything and everything but left consumers at the mercy of this 3 main parties – where is consumers right in relation to car loan, the cars and the tax consumers have to fork up mainly to acquire cars as a means for transportation (with the exception of luxury cars)?
Pitty this Bolehland "captive consumers"………..
this stupid system is used by US banks for loan approvals…good luck to everybody…banks point of view makes sence..thy wanna reduce their bad debt as much as possible…bt i cant see how this helps the slow car industry going…i guess bank profits are more impostant than ppls walfare
acbc said, "I just bought an 11 year old Nissan AD Resort and the bank quoted me 6.75%……….."
You are lucky still can obtain loan for 11 year old car, some bank even do not consider such loan at all. Appreciate if you willing to reveal which bank give loan to you?
e-nabill said "this stupid system is used by US banks for loan approvals…good luck to everybody…bla bla.. i guess bank profits are more impostant than ppls walfare"
Please use your head before making any comments. CCRIS (run by BNM) & CTOS (run by CCM) are very important risk mitigation tools for banks in giving out loans, at the same time banks look at their customer commitments in servicing other loans. Paul, what you mentioned is not totally correct (regarding most banks not giving loans to B rating customers). It depends on which banks that you're dealing with. Banks do consider those who fall below B rating, in which the decision will be upon the financing committee board's discretion. Either a guarantor is needed, impose security deposits, increase in margin of financing & decrease of loan tenor. Banks seldom impose higher interest/profit rate for 'under-rated' customers who applied for vehicles financing; those are usually implemented for housing loan customers.
Some banks uses 1-10 scoring method, while others use the A,B,C,D. Most banks will support for joint income applications, which will help increase the customer's repayment capacity. Here is the basic calculation for most banks in processing car loans:
montly instalment – max 35-40% of gross salary
total commitment w/o house – max 50% of gross salary
total commitment w house – max 75% of gross salary
less than 2 MIA (months in arrears) for other loans (on CCRIS)
Hope this info is useful.
in a way this is good as this will prevent those who really cannot afford to run into financial trouble later. This will also teach us to plan our finance properly.
Then again, this goes back to the basic problem which is… car price is too expensive. We end up taking high loan for long tenure.
being a malaysian (we love conspiracy don't we???) can't help but feel that there is a reason for this. To control the car sales of other brand???
fxxk the government. They're doing loads of shitty stuffs recently. save your money for a car, migrate and get a better job, better living environment and better car for lesser money. Malaysia sucks harder and harder nowadays.
This is stupid. I don't understand why in Malaysia we can't be flexible about credit. I remember when I was a student in the UK, the cable TV company had at least 5 ways of settling a bill (living on meagre student budget).
While it's perfectly understandable for Bank Negara to keep a tab on defaulters, they shouldn't stop people from buying new cars.
Why not start a lease plan? Instead of paying instalments for 7 or 10 years, just keep a car for 2 or 3 years. Or share a car. Let's say, you keep it for the first 3 and after the period ends someone else gets to own it for the remaining loan period. Isn't that better?
It's a win-win situation rather than get hung up over bad loans and unsold cars
mtay: i am only quoting the star's article
hehe joe is right. no such thing as zero inflation. we dont even make enough to cover inflation let alone pay off a high interest long term loan for a piece of junk called proton. if they decide to bring in the scrapping policy and essentially u are paying full price (plus high interest) for a car thats gonna be worth nothing even before you finish paying off the loan. more scary is they already scrap the car before you even finish paying for it. good luck trying to get a loan when you're paying your ass off for something that doesnt exist.
like Schumacher said just now…..everything must come to an end….and i feel it should be the end of the road for proton. time for the country to shift focus to something that can actually sustain us for the economic domination onslought of china.
btw….hope Schumacher ends his carreer on a high note with another driver's championship.
no wonder my h/p loan application was rejected last week. Banks thought they are smart but don't they know they depend on people like us with credit rating B or worse for their business. I hope this system will hasten the descend of the auto industry into a slump and then these banks will realise who need who.
Let's us all boycott the banks and not apply for h/p loans.
i used to work in a bank before and this credit rating has good intentions on the surface ,at least, but it doesn't really work here.
normal_user: i was quoting the star. thanks for your valuable info, you must be someone in the banking industry.
Not sure is this new crerdit rating approval loan process same as the one used in US, I think it is smiliar in certain area. The US credit rating based on the more the credit point you have, the easier for you to get loan and and the low interest rate…but bad credit people still can get loan just harder and may get higher interest rate. But for sure, it is a good way to eliminate the bad debt, but how the the CCRIS and CTOS get our credit history, if someone don't always has bank transaction, no direct deposit, don't use credit card…
I guess some apek who carry his bank in his pocket will not get any loan from any bank. Perhaps underground banks or should I say the deep sea kind.
" Loan sharks" .
Squeezing credit from those who really needs it is only going to make more headlines in news papers. I can see the headlines oledi… "Man gets chop by along for debts unpaid…"
yah … sigh …… its a vecious circle..
When P1 and P2 gulong… it wont be good news either…. more people will be desperate to make ends meet. some could resort to drastic measures…
Let hope that day does not come. P1 sucks but I hipe they can improve and continue operating. At least they can support some Malaysians families.
Biasa lah.
This is a capitalist economy which only benefits the rich and very rich. Housing developers are only building projects that are not within the capabilities of the average Malaysian.
So do the car importers. E.g., you think an Audi Q7 is within the purchase power of how many Malaysians. Lexus is also coming. Cars for the masses? So wake up. Life is not fair. Why do the banks wanna offer you a RM50k loan with some default risk when they can do a RM500k loan with relatively lower default risk with another customer? Live with it.
Unless, the gov is wiling to restrict the imports of luxury cars or luxury housing projects!!!
i fully agree this implementation. i noticed a lot of borrower not exactly with power to pay back. especially those that buy p1.
normal_user:
have to correct you here. While CCRIS is run by BNM credit bureau, CTOS is NOT run by the CCM (SSM – Suruhanjaya Syarikat Malaysia) Its a third party non govt related business entity.
How about BASIS? another private agency. How come no body mentioned about BASIS? . BASIS used to be the main source of reference until CTOS came along into the picture much later. Banks nowdays prefer CTOS mainly due to commercial reasons. They are cheaper to access compared with BASIS.
BASIS database is as huge if not larger than CTOS as they have been in the market much longer than CTOS. Remember most banks still refer to BASIS for credit information on customer.
How about BASIS?. another private credit rating agency. BASIS used to be the prefered choice by banks for reference until CTOS come along later. Banks nowdays prefer CTOS over BASIS for commercial reasons.
Since BASIS is in the market much earlier than CTOS, their data base is huge, if not bigger than CTOS. Remember, a lot of banks still refers to BASIS nowdays for credit reference
Korup…..
If they don't want us to own cars, well that's bloody fine! But whose looking into improving the freaking public transport? I would not mind not having a car if we had a public transport system which is as good as the one we have have in London, Singapore or Hong Kong.
Stupid………..
All the Ah Longs must be rubbing their hands in glee…
hmm.. well, this means NPL is rising.. can't blame the banks oso… furthermore some people didn't use their brain when buy a car.. I knew some low grade officers go for wajas & big cars… xde pakai otak punya, duit ngam2 utk byr loans saja.. bila budget lari sket mulalah miss byr.. this move bagus juga.. if can't afford buy something else la.. me?.. I use ex850 for more than 5 years (although I can afford bigger cars).. recently my vios loan approved in 3 days only… thank God.. susah ke, senang approved ka, I think tengok orang juga.. good citizen with good loan payments no need to worrylah.. don't ve to be rich, but make sure u pay all ur loan on time… banks will love u….
normal_user ..
and i oso said the move makes sence for the banks to reduce their bad debt…so before u go bash ppl its beter u read the whole ting…be mature abt having a discussion rather than branding ppl headless n all dat…
The knee jerk reaction; "Rich get richer, Poor get poorer".
Fact is; a car is a financial burden. Next to credit cards, we have a high qty of auto credit defaulters.
This credit crunch is not only meant for car purchases/loans. It also the same treatment I get when I want to do remortgage my appt. Truth be told, yes I do need to get my credit ratings up. At least for 1 year before considering any loans. I've already done away with my credit card and my appt is about to finish. But I need to wait another year to get another car.
Hopefully, by then, the trade in price of a 2nd hand car is better or at least the proces sorted. By then we would all be suffering to get a car that we will fall for the 'voluntary scrapping policy'.
Time to make all auto players suffer; tighten your belt, suck it in a drive that old beater. At least you have more cash to spend monthly. That would bring more money into the market and help reduce inflation.
Many view that the tighthening of the requirement for car loan approval is a bad things which is somewhat true.
However, I have something to share.
Imagine if this is not being done and car loans are still being approved easily. With the current economic situation in Malaysian and the anticipated worldwide slump aound the corner, what if many people lost their job or had to settle for a much lower pay. There are going to be alot more of loan defaulters than now especially for car loans. There are currently alot of 'Kereta Tarik' sitting in numerous yards. With a higher numbers of these 'Kereta Tarik', it will inevitably cause 2nd hand car prices to go down further compared to now. Furthermore, the borrowers may also want to sell of the car quick but at reduced price to minimise the loss. The defaulters may end up with lawsuit from the finance company for the outstanding loan amount owed or even be declared a bankrupt.
Ofcourse the scenario may be exaggerated a little but it is quite close to the truth as well. In a way it is helping us also but in a not so direct way. Financial Institution is a business not a charitable organisation. As with any business, their sole intent was to make money and not the other way around. So therefore, they had to be extra cautious in time like these.
I am thinking of buying a car as well but maybe is just not the right time at the moment.
Why this is getting such a negative feeling is beyond me. This is a good thing.
NPL are bad. In the sense, banks are doing financial planning for us. If banks think that a person is too risky to loan to you, you shoudl seriously look into why you they think likewise. Once you get a NPL, you are in serious crap. Better don't end up there in the first place.
Like motorhead mentioned, I know many people that can barely survive but buy a new car that is worth 60K (ie. Gen2, Waja). Even a Myvi and a Kelisa is torture for someone just starting out fresh from Uni as a Entry Lvl/Junior Executive. I also know people that changes their cars every 3 years for no apparent reason than to drive a new car. You can see they are already struggling, but they still do.
Why do people like this buy a new car? Thats just silly financial planning. I have a clerk here that buys a new Waja, decks it out with Rims and bling bling. Yet you know, if he looses this job, that Waja will be a NPL. He has absolutely no life savings to float him for whatever reason.
I have no problems getting a gen2, or take a loan for a 110k Altis. Why do I buy a used $20k Satria to motor around? Because I have better plans for my money than to service a loan.
People who can buys $150k car technically don't need a loan. They have enough to buy it cash, but just take loans to ward of tax auditors.
Scrapping policy? Never will work.
Leasing cars? Will never work here either. Just too expensive. In the long run, leasing is more expensive than owning.
Capitalist Market? Nothing wrong with that either. Don't even think malaysia is a capitallist market. In a pure Capitalist market, Proton would be long dead.
4G63T DSM…
Well said brader… ur brain works similiar like mine…hehehe.. more barriers can be good for all oso.. if ur loan not approved don't be sad.. try la something else.. banks just want to play safe.. jgn marah2… remember, kalu u kena blacklist oso, trust me, that is the last thing u wish for life.. miss one month oso bank record…kalu dah dekat nak mati, bolehlah… go ahead apply lotta loans… & if u r a good loan payer, don't worry for loans approval or waiting time period, bcoz banks will look for u & offer u more loans…. A rating shouldn't be only a rich person… just manage ur budget wisely…
ps: I bought a moto cub, bank oso knows.. suma dah online even kedai motor.
I got my loan from AmBank. Don't have any contacts there… just walk in and apply. Got approval after 4 days.
I once told by a loan officer when applying for a housing loan. He told me that there was once a lady came to apply for an RM80k housing loan which she is serving another RM80k loan and paying RM600 per month. The issue was that she was earning RM800.00 per month (Eight hundreds only) as shown in her payslip. Know what happened to her application? Accepted, and the bank was willing to take the risk although they know that total amount of her monthly payment will be higher than her monthly income. The office also told me that there was once a well dressed man applied for a RM150,000 loan and rejected although he earn RM12,000 per month.
The conclusion is simple, if you make loans, pay them on time. The bank will like you and dont really look at how much you earn. Lesson I learned from that episode, I make more loans and make sure I pay on time every months. That will drive up my credit rating for who knows what situation in the future when I need to use a lot of money (say during market crash to buy stock and be super rich overnight).
Remember, money is just an idea. It does grow on tree, we just need to know which seed, which soil, which fert to use to make it grow so we can shelter under it. Buying a Waja when you are despath is not a wrong thing if you have family rubber estate at kampung.
Cheers
If they want to proceed with scrap policy, they wud make loans much easier instead, so more ppl can change cars, p1 can sell more cars & more ppl will go blacklisted & they just don't care, as long as national car can sell…
maybe now have to combine salary with spouse to buy a car. time are tough, so buckel up.
crap lar, say wan improve da country's automotive sector wan.
SAY ONLY !
bicmos, what you said is happen as the one with RM 800 salary has good record on repayment, and I believed the guy with RM 12,000 salary but can't obtained loan for sure have tonne of outstanding loan to settle!
Back to our country macro economy policy, recently we can witness the rising oil price and increase in interest rate by US treasury have direct impact on many developed as well as developing countries like us. The classical approach toward economy policy to control inflation and/or stimulate growth are: –
1. Monetary policy – manipulation of interest rates to control the circulation of money in the market. When there is over-supply situation, the G will increase interest rate to encourage saving and discourage over spending, and vice-versa.
2. Fiscal policy – this is concern with G expenditure, especially use construction sector to generate economy activity and create multiplier effects in the hope that the economy is grow at healthy trend.
However, for this new millenium, the economic growth is not limited to these 2 main factors. there is on woman professor from US can prove that "consumer spending" or more popularly known as consumerism can generate and influence the economic growth. Therefore, sometime to a certain extent, G economy policy alone is insuffiecient to stimulate economy growth, as consumer purcahsing power also play pivotal part.
Look at our G current budget 07 announcement and this credit squeeze, I can hypotheses the following: –
1. The G try to increase interest rate in order to "divert" private fund, especially from banking institutions to finance 9 MP (i.e. some of the projects finance through PFI), apart from source from EPF.
2. Sell unit trust like recently launch Wawasan 2020 in order to raise fund from the public.
3. Since our current G facing difficulties to raise FDI and secure foreign fund, other option available is reduce subsidy in certain sector (i.e. recently increase of 30 sen for fuel).
Other measures implementing by G are: –
1. To increase food production by implementing policy favorable to agriculture sector in order to reduce import bill on food.
2. To increase export in manufacturing sector – electirical, electronic and FDI there is a hope. But other like cars (P1 & P2) and ICT (MSC) is totally hopeless.
So, in this captive market for auto sector, consumers is the greatest loser as G as policy maker (NAP), loan (private banking) and the crap producer for cars (P1) only interested to look after their revenue and coffer. left consumer wit nothing – the welfare of consumers is totally neglected as even the basic consumers' right take a back seat in our protective auto sector.
szw said,"crap lar, say wan improve da country’s automotive sector wan.
SAY ONLY !"
—————-
The above explanation perhaps show our G limitation in stimulate our auto sector. Looking forward, car sales is expected to be "bleak", and it is more depressing for P1 as it is a matter of what is the quantum of loss – bigger or biggest lost! So, expected more discount and "special package" offered by P1 and other for buying new cars!
So, current P1 bad biz model of selling high price but lowest quality car at local captive market, and selling low price but high quality car for export open market for very certainty that has one end result only – this bad biz model lead P1 to "self destructive by signed death warrant" only.
My opinion is credit squeeze is a "win-win" situation for banks and consumers as it is do more good than harm in term of minimize NPL and control unnecessary spending habit of consumers.
yea…a worldwide slump is around the corner. the australia's slow down is predicted in 2-3 years time. even with the mega billion dollar projects with china cannot prevent the slump, even though that practically spawned alot of millionaires overnight.
with reports like this poping everywhere on the news, you can be sure the banks (and rich people) already know about it long before hand. and thus need to cut down on risk.
i cant beleive that. rm800 per month and still can buy a car. rm800 barely pays for living expenses. thats like working everyday for 10 years just to pay off the car while not eating.
malaysia had a 8 year window to make something out after the asian economic crisis. looks like everything is still trying to pick up and now we're facing the worldwide slump already. proton and mas have gone nowhere in that time.
this is all because Proton la..price too expensive, then wants to cleasr stocks, then bank effected by the non performing loans…
p/s fat crocs getting fatter rakyat dying..or living like zombie
At the very end, we bolehlah people suffer at the whims and fancies of our Mrs 30% and Close one Eye ministers!! We suffer,cry and weep in silence while they enjoy and live in utter luxury with our blood,sweat,tears and soul.
All hail Mrs 30%, Close one Eye and all other greedy egoistic ministers.
my friend the usecars salesman just told me this month of the total 15 sales he closed,12 already been load rejected.hard time ahead,better spend wisely nowadays.another bank employee friend say,the yards they park reposses vehicle are full and looking for more spaced,cause,enticipating more to be reposses!and the used vehicle price are droping so fast,most of us found that our car price are a lot less then what we owe to the banks,aiya,NEGATIVE ASSETS lah,no thanks to NAP!
Hi I am desperately looking for a car. I have a valid drivers license and I am employed at a school for the past 7 years.
I am blacklisted and have no deposit but can pay the monthly installments
Please help if you can. Please contact me on my moblie on 0722135642
Thnaky you