Banks to ease financial burden of customers

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Banks to ease financial burden of customers

Postby admin » Wed Aug 06, 2008 3:20 am

PETALING JAYA: Finance companies are resorting to restructuring car loan repayments to help ease the burden of customers with heavy financial commitments.

At least three major banks will announce their hire-purchase loan restructuring plans soon.

A senior manager of a prominent local bank with a substantial volume of hire-purchase customers said that given the current economic scenario, where prices of fuel and food had increased, many customers would be burdened by the high repayment plans that they had signed previously.

Finance companies could not rule out that some customers might find it difficult to service their monthly instalments, he said.

“We expect that for next year there will be more repossession orders given, but it won’t be a drastic increase,” he said, adding that his company issued a monthly average of 2,500 repossession orders.

Most banks and finance companies will try to assist any customer whom they feel could fail to meet their monthly instalments.

The move is expected to bring cheer to thousands of hire-purchase customers, especially those paying high monthly instalments for their car loans.

A Perodua Kelisa owner, Jen Neoh, 29, welcomes an option to restructure her car loan, as it would ease her financial burden.

“I think it’s better to be in debt with a bank, rather than borrowing from friends, family or even loan sharks,” she said.

Neoh, who now pays almost RM400 for her monthly instalments, said she would be comfortable paying about RM200 instead.

A public relations manager in a large bank here said her bank was now very selective with new approvals for hire-purchase loans.

“And we have also started calling customers to help restructure their hire-purchase agreements to help them make ends meet,” she said.

Loan restructuring is commonly done by extending the account holder’s repayment period to lower the monthly instalment that needs to be paid.

“Many factors affect how much the refinancing would affect the new monthly repayment amount,” said a head of retail collection in Kuala Lumpur.

He said they included how much loan was taken in the first place and the customer’s financial status.

“But if they can’t pay, reduction is not a solution. They can always surrender their cars. But we will try to help them so that they won’t have to,” he said.

Read the full article:
http://thestar.com.my/news/story.asp?fi ... sec=nation
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