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The extended support measures will give such individuals and businesses currently under loan repayment deferrals more time to resume repayments.
With many individuals expected to continue facing cashflow issues amid the COVID-19 pandemic, the Monetary Authority of Singapore (MAS) extended its support measures for various borrowers including those with property loans.
In a release issued on Monday (5 October), MAS noted that banks and finance firms have been providing payment deferrals since April this year to individuals and SMEs facing short term difficulties paying for their loan instalments.
But while the relief measures helped ease the cashflow pressures faced by such individuals and SMEs, they are set to expire 31 December.
“MAS and the financial industry recognise, however, that many individuals and businesses will continue to experience cashflow pressures into early 2021,” said the release.
“The extended support measures will give such individuals and businesses currently under loan repayment deferrals more time to resume repayments. The support measures will also be available to borrowers previously not under any payment deferral, but who are now facing cashflow challenges.”
Specifically, individuals with commercial, residential and industrial property loans may apply to temporarily reduce their loan repayments to 60% of their monthly instalments for a period of nine months.
The reduced monthly instalment will cover interest and partial principal payments, enabling the borrower to pay down their principal amount while easing cash flow.
Individuals need only provide proof that their income have been impacted by at least 25% and that their property loan payments “are not more than 90 days past due, regardless of whether they have taken up payment reliefs previously”.
Those who meet these criteria can apply for assistance between 9 November 2020 and 30 June 2021.
“Individuals who are unable to service the reduced payments under this programme should approach their lenders early to discuss alternative repayment options,” said MAS.
Individuals with renovation and student loans can also apply for an extension of their loan tenures by up to three years to lower their monthly repayments.
“This option is available to individuals who can provide proof of income impact, and whose renovation or student loan payments are not more than 90 days past due, regardless of whether they have taken up payment reliefs previously.”
Those who meet these criteria can also apply for assistance between 9 November 2020 and 30 June 2021. Borrowers who cannot service the reduced payments should discuss taking up alternative repayment options with their lenders.
Meanwhile, individuals with unsecured revolving credit facilities can apply for a conversion of their outstanding balances to term loans at lower interest rate.
However, they need to prove that their income has affected by at least 25% and that their repayments are between 30 and 90 days past due.
Those on debt consolidation plans (DCP), on the other hand, can apply for an extension of their DCP’s loan tenure for up to five years.
“Individuals who took up the unsecured credit relief or the DCP relief but continue to face difficulty repaying those loans, can reach out to their lenders or Credit Counselling Singapore (CCS) to discuss restructuring plans which can help ease their cash flow burden,” said MAS.
Nonetheless, MAS urged borrowers who are able to “resume paying their loan instalments in full should start doing so from 1 January 2021, as further postponement increases their overall debt”.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg