Total debt servicing ratio won't be applied to non-property loans any time soon: Tharman

The total debt servicing ratio (TDSR) that currently applies to property loans will not be extended to other types of loans any time soon, said Deputy Prime Minister Tharman Shanmugaratnam (above) on Sunday, July 14, 2013. -- ST FILE PHOTO:&nbsp
The total debt servicing ratio (TDSR) that currently applies to property loans will not be extended to other types of loans any time soon, said Deputy Prime Minister Tharman Shanmugaratnam (above) on Sunday, July 14, 2013. -- ST FILE PHOTO: KEVIN LIM

The total debt servicing ratio (TDSR) that currently applies to property loans will not be extended to other types of loans any time soon, said Deputy Prime Minister Tharman Shanmugaratnam on Sunday.

"We don't intend to, any time soon, extend the TDSR to other types of loans, but it's really for the banks to factor it into their own internal assessments," said Mr Tharman, who is also the Finance Minister at the sidelines of a grassroots event in Jurong.

"Supervision is more useful when it comes to the broad range of loans, not just more and more rules," he added.

The TDSR framework, introduced last month for property loans, takes into account a borrower's total repayments such as mortgages, car and student loans, and so on.

Banks have to check and ensure that the total monthly debt repayments of those taking up property loans do not exceed 60 per cent of their gross monthly income.

The Monetary Authority of Singapore had said earlier this month that it was closely monitoring the lending practices of banks and data trends for non-property loans, and may consider applying the TDSR rules for other loan types.