Kuala Lumpur, Friday, 20 October 2017 – With reference to the article in a local publication titled “High car bookings, but 60% loan rejection rate”, The Association of Banks in Malaysia (ABM) would like to refute the said allegations.
Based on feedback from amongst 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 approximately 68% of the total number of applications received. The approval rate from January 2017 up 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 as follows:
- • Applicant’s ability to service the loan
- • Applicant’s repayment track record
- • Loan amount applied for
- • 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
- Insufficient income evidence
- Uncertain payment ability
- Low net disposable income
The commercial banks in Malaysia have remained supportive of the automotive sector as evidenced by the high approval rates, and car loans will continue to be extended to eligible borrowers.
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.