Friday 29 Mar 2024
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KUALA LUMPUR (Oct 20): The Association of Banks in Malaysia (ABM) clarified that 68% of auto loans applications were approved between January and September this year, contrary to earlier reports that 60% car buyers had their loan applications rejected.

In a statement today, ABM disclosed the percentage of auto loan approval in 2016 and 2017 to refute a report by a local publication entitled “High car bookings, but 60% loan rejection rate”.

The association said that based on feedback from the eight commercial banks that offer hire purchase financing, auto loans approval rate against total applications stood at around 68% in 2016.

“The approval rate from January until September 2017 remained steady at the same percentage of 68%, based on total number of applications received,” it added.

The "high" approval rates, said ABM, is testament that commercial banks in Malaysia have remained supportive of the automotive sector.

“Car loans will continue to be extended to eligible borrowers,” ABM said in the statement.

Among factors that can affect the approval of an auto loan application, said ABM, include the applicant’s ability to service the loan, previous loan repayment track record, as well as the size and the duration of the loan applied.

“Some of the main reasons for rejection include history of credit default or unfavourable track record, insufficient income evidence, uncertain payment ability and low net disposable income,” ABM said.

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