Some banks and automakers have developed a new lending plan to finance car buyers with up to 1 billion rials ($32,800) in loans, without using the money of the Central Bank of Iran.
Applicants are supposed to put in 30% of a car’s price as down payment, and the remaining 70% will be provided by banks. No deposit is required prior to taking out the loans and borrowers should repay the loans in a 3-5 year period at a 20% interest, ISNA reported on Monday.
The plan seems to be more appealing to carmakers as the value of their vehicles will be reimbursed as soon as the car is sold. The scheme should satisfy auto companies compared with the previous “selling-in-installment” scheme which had a repayment period of 5 years and 21% interest rate.
The scheme required banks to pay 1,500 million rials in loans with banks receiving their money at the end of the contract. Despite the decision being enforced by Money and Credit Council, some banks refused to provide the loans on grounds that they had not been formally informed of the terms in advance.
