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SINGAPORE – Individuals may choose to temporarily suspend education, renewal and motor vehicle loan payments, in a move by the financial sector to ease cash flow concerns stemming from the coronavirus pandemic.
Those with commercial or industrial property loans, as well as mortgage capital withdrawal loans, may also request their banks to defer payments until the end of this year, subject to certain requirements.
Service fees generally charged for failing to maintain the average daily or monthly minimum balance in one’s retail bank account may also be waived until December 31. The same is true for bank fees for failed Giro transactions configured to pay insurance premiums, electricity and telephone bills, among others.
You don’t need to show you’ve been affected by the Covid-19 crisis to get relief, the Singapore Monetary Authority said Thursday (April 30). The person’s credit score will not be affected by deferrals either.
The latest measures aim to support people facing financial difficulties due to the Covid-19 pandemic, MAS said. Previously, it launched a set of measures in March that allowed people to defer payments on home loans and insurance premiums, in addition to supporting small and medium-sized businesses.
“This second package will extend the scope of aid to people to other types of loan commitments and allow them to continue to have access to affordable basic banking services,” the authority added.
Other relief measures announced Thursday by MAS, along with the Singapore Bank Association and the Singapore House of Finance Association, include allowing applicants to extend loan tenure for debt consolidation plans and refinance property loans. investment without being subject to the total debt service index and the mortgage service index. The indices limit the amount that buyers can borrow for a real estate loan.
But even as MAS establishes measures for the entire industry, it warned that deferrals and extensions of loan tenure will lead to higher overall interest costs.
“People must carefully consider the accrued interest costs that they will eventually have to bear, and balance this with their need for temporary relief from cash flow,” he added.
Applications for all relief measures will begin next Wednesday (May 6), with the exception of loan tenure extensions for debt consolidation plans, which will begin on May 18.
The OCBC Bank said Thursday that it had started receiving applications for a moratorium on auto loans, renovation loans, education loans and loans for industrial and commercial properties in March.
“At the time, there were no standardized relief measures for these types of loans, and each request was handled on a case-by-case basis,” said a bank spokesperson.
He added that the number of moratorium requests had increased between 20 and 70 times in the past month for each of the loan types.
“All eligible applications have been approved,” added the spokesperson.
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