Car loan approval rates remain steady

THE Association of Banks in Malaysia (ABM) would like to refute the claims made in a local newspaper about the high (60%) rejection rate for car loans.

Based on feedback from the eight commercial banks that offer hire purchase financing, it has been observed that approval rates for loans to purchase cars in 2016 stood at about 68% of the total number of applications received.

The approval rate from January 2017 till September 2017 remained steady at the same percentage of 68% based on total number of applications received.

We would also like to state that, as with all loans, banks would in their credit evaluation process consider all aspects to determine an applicant’s ability to service the loan. Some of the factors which banks take into consideration in assessing a car loan application are:

> Applicant’s ability to service the loan;

> Applicant’s repayment track record;

> Loan amount applied for; and > Length (or term) of the loan. Some of the main reasons for the rejection of car loans include history of credit default/unfavourable track record and low net disposable income.

Members of the public may contact ABMConnect at 1300-88-9980 or via eABMConnect at www.abm. org.my for any enquiries or complaints related to car loan matters.