Economy, Auto

Auto-Loan Ceiling Raised

Auto-Loan Ceiling RaisedAuto-Loan Ceiling Raised

The auto loan ceiling in Iran has been raised to 150 million rials ($4,450 at market exchange rate) following the recent approval by the Money and Credit Council (MCC), with the Central Bank of Iran (CBI) communicating the decision to the banking network, ISNA reported on Tuesday.  

Loans given for purchasing domestically manufactured (or assembled) cars will cover up to 60 percent of the vehicle’s price, on the condition that the amount does not surpass 150 million rials ($4,450), the report said, citing the approval.

In 2009, the car loan ceiling was 70 million rials ($2,100). But was later increased to 100 million ($3,000).

For swapping clunkers with new cars, 80 percent of the costs will be covered; however, the loan ceiling for the swap is no more than 200 million rials ($6,000).  

The interest rate is 21 percent and the repaying time will be a maximum 5 years.

Despite the fact that the MCC had approved the loan increase, some banks had refused to increase the ceiling on the grounds that they had not been formally informed of the possible change in guidelines.

 The CBI, however, had earlier announced that after the issue was ratified by the MCC, it was communicated to all banks on May 5.

The CBI has announced that a comprehensive guideline is being devised in collaboration with the ministry of industry, mine, and trade and will duly be communicated to all banks to clarify the matter in due course.