Individuals affected by Covid-19 may apply to reduce monthly property loan payments for up to 9 months

• Singapore’s central bank is extending various relief schemes for individuals affected by Covid-19
• Those with housing loans may apply to reduce their monthly instalment payments
• Those with renovation and student loans may extend their loan tenures

SINGAPORE — From Nov 9, individuals with housing loans may apply to reduce their monthly instalment payments and pay just 60 per cent of the usual sums for up to nine months. 

This is among a series of Covid-19 relief measures that will be extended beyond Dec 31, the Monetary Authority of Singapore (MAS) said on Monday (Oct 5). 

The measures, announced by MAS in April, are meant to help individuals and businesses reeling from the Covid-19 pandemic. Most of them were due to expire by year’s end. 

Apart from allowing individuals to pay lower monthly instalments on their mortgage loans, the tenures — the amount of time individuals are allowed to repay sums borrowed — for renovation and student loans will also be extended. 

MAS said that as economic activities continue to open up, borrowers who are able to resume paying their loan instalments in full should start doing so from Jan 1 next year, as further postponement raises their overall debt.

Looking ahead, the central bank and the financial industry recognise that many individuals and businesses will continue facing cashflow pressures moving into early 2021. 

“The extended support measures will give such individuals and businesses currently under loan repayment deferrals more time to resume repayments,” MAS said. 

“The support measures will also be available to borrowers previously not under any payment deferral, but who are now facing cashflow challenges.”

The following is a round-up of the measures that will be extended: 

PROPERTY LOANS

• Individuals with residential, commercial and industrial loans may apply to their banks to pay lower instalments

• They must show that their income has been affected by at least 25 per cent

• Their property loan payments must not be more than 90 days past their due date, whether or not they had taken up payment reliefs earlier 

• They may apply for this loan relief between Nov 9 this year and June 30 next year 

• The relief will be granted for up to nine months from the date that the application is approved, but it cannot go beyond Dec 31 next year

• Those who continue to face difficulties making repayments after the programme ends may discuss with their banks to extend their loan tenures by up to three years 

• MAS said that as of August, there were about 36,000 applications to postpone property loan payments, with about S$29 billion worth of loans deferred

RENOVATION AND STUDENT LOANS

• Individuals with renovation and student loans may extend their loan tenures by up to three years

• This will lower their monthly instalments and ease pressures on their cashflow 

• It is available to those who can provide proof that their income has been affected

• Their loan payments must not be more than 90 days due, whether or not they had taken up payment reliefs earlier 

MOTOR VEHICLE LOANS AND HIRE-PURCHASE AGREEMENTS

• Individuals with these arrangements who are in need of help may approach their lenders to discuss suitable repayment options or relief on a case-by-case basis

• The lender will consider the borrower’s financial condition and need for the use of a motor vehicle, the current market value of the vehicle and its estimated market value after the deferment

• Given that motor vehicles are depreciating assets, MAS said that these individuals should continue making payments, where possible

UNSECURED CREDIT

• Individuals with unsecured credit may apply to their lenders to convert their outstanding balances owed into term loans — at a reduced interest rate

• Under this scheme, the interest on the term loan is capped at 8 per cent, compared with the 26 per cent yearly rate typically charged on credit cards

• This applies to those with income losses of at least 25 per cent and repayments that are between 30 and 90 days past their due

• They have until June 30 next year to file applications with their lenders

DEBT CONSOLIDATION

• Those on plans to consolidate their debts can extend their loan tenures by up to five years

• They have to prove that their income has been hit and have repayments that are between 30 and 90 days past their due 

• They have until June 30 next year to submit their applications with their lenders