Bank Negara Malaysia (BNM) has squashed rumours of a memo directed at banks to reduce the maximum repayment period for new car loans to seven years, and raise the minimum down payment value from 10% to 20%, reports Business Times.
“We have not given any directive to any banks. The current financing terms and conditions of a maximum financing period of not more than nine years under the Responsible Lending Guidelines remains unchanged,” a spokesperson told the Business Times.
Rumours of banks having been issued a memo to cut the financing period and increase down payment for new vehicles by September have recently been doing the rounds on social media, causing quite a stir.
BNM’s Responsible Lending Guidelines, which were implemented at the beginning of 2012, have recently been joined by an additional set of measures that include a maximum 10-year tenure for personal loans.
At 83%, Malaysia’s household debt-to-GDP ratio is the highest in Asia amongst developing countries, says the central bank. Over the southern border, the Monetary Authority of Singapore (MAS) recently capped the maximum loan at 50% (for cars with an open market value of more than S$20,000) and the maximum loan tenure at five years.
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AI-generated Summary ✨
Comments largely express hope that the ban on 9-year car loans is true, viewing it as a positive measure to curb excessive debt and promote financial prudence. Many agree that shorter loan tenures, ideally capped at 5 or 7 years with higher down payments, would help reduce the burden on consumers and encourage more reasonable car prices, especially if combined with reduced taxes. Some critics lament that such policies are long overdue and blame high household debt on lax lending and high car prices. A few comments reveal disbelief that Bank Negara would implement such restrictions, seeing them as unlikely or wishful thinking. Overall, the sentiment favors tighter lending rules to promote responsible borrowing and affordability.