US Treasury Department said that it will provide a USD 1.5 billion loan to Chrysler LLC's financing arm and the automaker announced it will immediately use the money to offer 0% financing on several models and expand lending to car buyers with less than ideal credit.

The Treasury said that the new aid is in addition to the USD 17.4 billion in loans earmarked for Chrysler and General Motors Corporation last month in an effort to buy time for the two companies to reorganize and ultimately return the domestic auto industry to profitability.

Mr Thomas F Gilman VC & CEO of Chrysler Financial said that "This funding will better position us to withstand the current economic challenges until funding becomes available through more traditional commercial sources."

Mr Jim Press VC & president of Chrysler said that the loan will allow Chrysler Financial to provide more customers with affordable financing, including those with credit scores around 620. He added that "We have customers who want to buy our vehicles, dealers who want to order vehicles and employees who want to build cars. Now with enhanced financing available in the system we can help our customers get the credit they deserve and help drive America forward."

Chrysler Financial will report to Treasury on its use of the money and other financial information, but government officials may block some of the details from public disclosure. Unlike GM and Ford, Chrysler is owned by a private equity firm, Cerberus Capital Management LP, and is not required to publicly release details of its finances.