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Of 50-Year Loans and Instant Loan Approval
Being the first to bring innovation can sometimes have it’s pitfalls.
UOB was the first bank to offer a housing loan of up to 50-years tenure last month.
They also offered on the spot approval for loan application made at showflats.
Shortly after the “instant loan approval” scheme was reported in the newspaper, MAS moved in to give a warning that a bank can only give housing loan approvals at a branch.
Giving out loans at temporary sites “could lead to imprudent lending by banks”.
After the warning from MAS, UOB has clarified that while the technology (in the form of iPads) allowed for loan applications to be done offsite, the information would still flow through to its head office to be processed and approved. In addition, they have streamlined their back office processes so that faster credit evaluation can be done.
As for 50-year loans, Minister for National Development Khaw Boon Wan has given it his thumbs down by calling them a gimmick.
He further said: “Please don’t fall for that, it doesn’t make sense.”