SINGAPORE - More details have been released on how the physically disabled will be exempted from new curbs on car loan financing.
To qualify for the exemption - which applies for only one car per disabled person - the vehicle must be registered in the name of the borrower. This can be either be the disabled person or the caregiver.
Financial institutions can apply to the Monetary Authority of Singapore (MAS) for the exemptions to be granted to an eligible borrower. This person must provide documents including a written declaration saying that he has not already been granted exemption for an existing vehicle.
Applicants will be considered physically disabled if they meet one of the following criteria:
They qualify for payout under the ElderShield Scheme or the Interim Disability Assistance Programme for the Elderly. Have been issued with a carpark label under the Car Park Label Scheme. Have been certified physically disabled and incapable of commuting by bus and MRT by a Ministry of Health appointed physician.
These details were provided by the MAS last Friday. The move was announced in Parliament last Thursday, after MPs voiced concerns that the curbs would hurt those who need a car the most.
The changes come about two weeks after the authority restricted car loans to 50 to 60 per cent of purchase price, to be repaid within five years.
Previously, they were up to 100 per cent of purchase price and could be serviced over 10 years.
The MAS also said that it will take into account the depreciation in value of a used vehicle in determining the applicable loan-to-value ratio limit.
It will adopt a straight-line depreciation in the value of the original open market value (OMV) over 10 years.
"This will address feedback received that the OMV recorded in the original vehicle registration documents does not reflect the depreciated value of a used motor vehicle," said the MAS.
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