The total amount the borrower will pay consists of three things:
Principal: this is the original loan amount that must be repaid to the bank
Interest: interest rate is fixed over the whole tenor of the loan. The interest rate ranges from 12% to 15% according to the type of vehicle and customer’s profile. Bank offers promotion from time to time with interest rate below 12% p.a. for new cars.
Applicable fees and charges: the borrower pays the bank 1% of the loan amount in processing fee subject to a minimum of $350 or ៛1,400,000 at the time of application. In addition, the borrower pays yearly for an auto insurance policy with comprehensive cover from a panel insurance company (Forte, CVI, Asia Insurance). A charge or a penalty is levied if the borrower misses a monthly payment. Please see Q22 for details.