SHAH ALAM: SP Setia Bhd has launched its differential sum loan scheme, Setia Express Advance Loan (SEAL), to particularly cater to buyers who wish to upgrade their homes, or require time to encash profit from other investments.
In response to market challenges and providing financial flexibility, SEAL offers interest rates as low as 5.5% per annum, and up to 30% of the intended property purchase price.
Speaking after the launch of SEAL, SP Setia CEO and president Datuk Khor Chap Jen said that SEAL’s three-year tenure would enable buyers to have more time and options to arrange for alternative financing, such as accessing their Employees Provident Fund savings or unlocking other assets to fund the differential sum.
“At times, the loan margins approved by banks may not meet the needs of home buyers.
“It may be difficult for buyers to come up with the remaining 30% or 40% of the property price, especially if they are faced with temporary cash-flow problems.
“During the first three years under SEAL, buyers will only be required to pay the interest rate,” he said.
SEAL is only available for completed SP Setia projects.
Furthermore, there will be no penalty charge imposed on buyers who choose to settle their loan amounts earlier.
In order to be eligible for SEAL, the purchaser must have signed the sale and purchase agreement, paid the 10% down payment and accepted the letter of offer for their end-financing loan from their respective financial institutions.
Khor assured that SEAL would not cause any additional pressure on the group’s bottomline, as the 5.5% interest rate charged is sufficient to cover the cost of borrowing and no losses or large profits will be made from this scheme.
“We want to help our buyers purchase homes; we are not replacing banks.
“At the end of the day, we make profits from selling houses; we are not in the business of lending money to make money,” he added.
SEAL will not impact SP Setia’s gearing ratio, as the group will deploy funds from its existing bank borrowings and cash in hand, which amounted to RM4.07bil as of Dec 31, 2016.
Meanwhile, Khor said that SP Setia would continue sourcing for land bank, despite the group’s proposed acquisition of Island & Peninsular Group Sdn Bhd (I&P), which comes with an additional land bank of 4,263 acres.
Khor declined to divulge further details on the group’s future plans in regards to I&P, as the group will present a definitive plan for I&P in three months’ time.