ABM refutes allegation on car loan rejections

KUALA LUMPUR: The Association of Banks in Malaysia (ABM) has refuted the allegation that 60% of car loan applications have been rejected despite the rising number of car bookings as reported by a local publication recently.
Instead, ABM said, based on the feedback from eight commercial banks which offered hire purchase financing, the approval rate from January to September 2017 remained at a steady 68%, similar to last year's figure.
"We would also like to state that, as with all loans, banks would consider all aspects to determine the applicant's capability in servicing the loan in their credit evaluation process," it said in a statement today.
ABM said that among other things, the banks would consider the applicant's repayment track record, loan amount and the tenure of the loan.
"Some of the main reasons for the rejection of the loan application include a history of credit default or unfavourable track record, insufficient evidence of income, uncertain payment ability and low net disposable income," it said.
The association said that commercial banks in Malaysia remained supportive of the motor vehicle sector as evidenced by the high approval rates, and car loans would continue to be extended to eligible borrowers. — Bernama