Individuals can choose to temporarily halt payments for education, renovation and motor vehicle loans, in a move by the financial sector to ease cash flow concerns arising from the coronavirus pandemic.
You can apply to defer payments until the end of 2020, subjecting to certain requirements if you are under these loans – commercial or industrial property loans, mortgage equity withdrawal loans.
Service fees that are normally charged for failing to maintain the minimum average daily or monthly balances in one’s retail bank account, as well as bank fees for failed Giro transactions set up to pay for insurance premiums, electricity and phone bills, among others can also be waived till 31st December 2020.
One does not need to show that he has been affected by the Covid-19 crisis to obtain the relief, said the Monetary Authority of Singapore on Thursday (April 30). The person’s credit score will not be affected by the deferments as well.
The new initiatives are aimed at helping individuals who face financial difficulties because of the Covid-19 pandemic, the MAS said. It previously unveiled a package of initiatives in March that allowed individuals to delay home loan and life insurance payments, in addition to support for small and medium-sized companies.
The second plan would broaden the scope of individual relief to all forms of loan obligations, enabling individuals to continue accessing affordable basic banking services.
Other relief measures allow applicants to extend the loan tenure for debt consolidation plans and to refinance investment property loans without being subject to the total debt servicing ratio and mortgage servicing ratio. The ratios restrict the amount that buyers can borrow for a property loan.
The MAS sets out the industry-wide measures, it warned that payment deferments and loan tenure extensions will result in higher overall interest costs and individuals should carefully consider the accumulated interest costs they eventually have to bear, and balance this against their need for temporary cash-flow relief.
The applications for all the relief measures will start on the May 6th 2020, except for the loan tenure extensions for debt consolidation plans, which will start on May 18th 2020.
OCBC Bank had started to receive moratorium requests for car loans, renovation loans, education loans and industrial and commercial property loans in March. However, there were no standardised relief measures for these loan types and each request was handled on a case-by-case basis. The number of moratorium applications jumped between 20 and 70 times within the past month for each of the loan types. Fortunately, all the eligible requests have been approved.
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