Car Owners Can Now Defer the Repayment of Motor Vehicle Loans

(Photo Credit: Yahoo!)

The Monetary Authority of Singapore (MAS), the Association of Banks in Singapore (ABS) and the Finance House Association of Singapore (FHAS) jointly announced on 30 April 2020, a second package of financial stimulus to support individuals facing financial difficulties due to the COVID-19 pandemic.

“As the economic outlook remains challenging and there continues to be significant uncertainty over the depth and duration of this downturn, the latest package of measures will provide further support to affected individuals,” MAS wrote.

Following the first industry support package, the second scheme will extend the scope of relief for individuals to other types of loan commitments and allow people to continue to have access to affordable basic banking services.

This includes the repayment of motor vehicle loans.

A summary of the second package can be seen below:

(Photo Credit: MAS)

Details of deferring repayment of motor vehicle loans, subject to assessments

According to MAS, individuals affected by COVID-19 can “approach their respective bank or finance company to discuss suitable repayment plans on a case-by-case basis”.

The bank or finance company will take various factors into account. This includes the lender’s financial situation, need for the use of a motor vehicle, the current market value of the vehicle, as well as its estimated market value after the deferment period (if applicable).

Once the deferment is granted, individuals can arrange extending the loan tenure by up to the corresponding deferment period.

MAS mentioned this will “ease individuals’ monthly instalments when they resume regular repayments”.

Things to take note:

Individuals do not need to demonstrate the impact from COVID-19 to obtain these reliefs, and their credit scores will not be affected when they take up payment deferments.

Applications for these relief measures will start from 6 May 2020

Financial institutions will aim to process all applications promptly. However, a high volume of applications could lead to some delays.

For more details, kindly refer to the joint release here.

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