China banks raise auto loan interest rates by up to 30%

Shanghai, May 19 (Gasgoo.com) Many banks in China have extended the processing time of auto loan application and raised auto loan interest rates, with some even rising by 30% on the basis of the benchmark interest rate, media reported recently.

"When I was applying for auto loans in January, the bank offered me loans with the benchmark interest rate, but these days when I accompanied a friend to get a mortgage through the bank, the auto loan interest rate unexpectedly rose 10%," Ms Lau told reporters. She then called several other banks and found that many banks had raised their rates in auto loan service, ranging from 10% to 30%.

Moreover, quite a few banks have put limits on auto loan business. "Currently we only offer loans to high-end vehicle buyers and they need to provide us with collaterals when doing so. While if the car is below 100,000 yuan ($14,600), we usually will not approve the loan application. " A clerk, responsible for individual business at the network of a joint-stock bank, told the reporter.

When the reporter asked: "Can a VIP customer get any preferential treatment if buying a car below 100,000 yuan?" --"No", the clerk said firmly. "If a customer has a poor credit, the rate is likely to be raised 20-30%."

Previously, most banks held auto loan interest rates at the benchmark interest rate of the central bank; some would even lower 10% from the rates for customers with good credit rating.