SINGAPORE - 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.
Those with commercial or industrial property loans, as well as mortgage equity withdrawal loans, can also apply to their banks to defer payments until the end of this year, subject to certain requirements.
Service fees that are typically charged for failing to maintain the minimum average daily or monthly balances in one's retail bank account can also be waived till Dec 31. The same goes for bank fees for failed Giro transactions set up to pay for insurance premiums, electricity and phone bills, among others.
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 latest measures aim to support individuals facing financial difficulties due to the Covid-19 pandemic, said the MAS. It previously rolled out a set of measures in March that allowed people to defer home loan and insurance premium payments, on top of support for small and medium-sized enterprises.
"This second package will extend the scope of relief for individuals to other types of loan commitments, and allow them to continue to have access to affordable basic banking services," added the authority.
Other relief measures announced on Thursday by the MAS, together with the Association of Banks in Singapore and the Finance Houses Association of Singapore, include allowing 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 limit the amount buyers can borrow for a property loan.
But even as the MAS sets out the industry-wide measures, it warned that payment deferments and loan tenure extensions will result in higher overall interest costs.
"Individuals should carefully consider the accumulated interest costs they eventually have to bear, and balance this against their need for temporary cash-flow relief," it added.
Applications for all the relief measures will start next Wednesday (May 6), except for the loan tenure extensions for debt consolidation plans, which will start on May 18.
OCBC Bank said on Thursday that it had started to receive moratorium requests for car loans, renovation loans, education loans and industrial and commercial property loans in March.
"At that time, there were no standardised relief measures for these loan types and each request was handled on a case-by-case basis," a bank spokesman said.
He added that the number of moratorium applications had jumped between 20 and 70 times within the past month for each of the loan types.
"All the eligible requests have been approved," the spokesman added.