GMAC revives sub-prime car loans

General Motors' (GM) finance division is cutting financing costs and reviving sub-prime lending to speed up a car sales revival.

GMAC Financial Services will make an extra $5bn (£3.46bn) available as loans to car buyers over the next 60 days.

Dealers are also having fees and repayments slashed or delayed to help them clear a back-log of unsold cars.

GM has been given a 1 June deadline to come up with a restructuring plan. The alternative is bankruptcy.

GMAC's additional car financing packages will be made available for buyers of both new and used cars.

The initiative came soon after GM, along with Ford, said they would step in as guarantors for some of their customers' car loans in the event that they were to lose their jobs.

GMAC, which is owned by GM and private equity firm Cerberus Capital Management, received a $6bn bailout by the government in December.

Last month GMAC announced that it was once again profitable.

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