MAS Special Financial Relief Programme - Covid-19 Loan Assistance in Singapore
The Covid-19 situation has hit many people hard. If you have lost your source of income due to the pandemic, and/or have difficulties paying off your loans or recurring payments this year, the Special Financial Relief Programme from MAS may be your saving grace. Here’s the compiled list of Covid-19 relief packages for individuals and businesses.
What is the MAS Special Financial Relief Programme?
In light of the special circumstances around Covid-19, the Monetary Authority of Singapore has implemented a package of financial assistance measures for all borrowers in Singapore.
If you have any loan commitments for your housing, cars, renovation or education, you can now defer your loan repayments until 31 December 2020. This makes life much easier for those who have suffered income loss - although you still need to repay the deferred amount next year.
If you hold any insurance policies, and find it difficult to meet the premium payments this year, the Special Financial Relief Programme also covers you. Insurers will now give you the option of flexible premium payments while you still remain insured.
Finally, if you are a business owner, you can also apply to your bank for financial relief - either have your loan deferred or have the interest rates lowered. Read on for more details.
Which Covid-19 Relief Measures Are You Interested In?
What Are the Property Loan Assistance Measures?
There are 4 support measures to help individuals with property loans to ease their cashflow and reduce debt obligations. These include deferring loan repayments on various properties and repricing investment property loans.
Deferring Residential Property Loans
How to defer residential property loans?
If you have loan commitments for any HDB or private properties, you can defer repayment on the loan or both the loan and the interest up to 31 Dec 2020. Interest will not be accumulated on the deferred loan payment, but not on interest payments.
Who is eligible?
Anyone! As long as your mortgage repayments are less than 90 days past due as of 6 Apr 2020. This is on an opt-in basis, and you don’t have to show how you were impacted by Covid-19. You will also not be subjected to the Total Debt Servicing Ratio (TDSR) or the Mortgage Servicing Ratio (MSR) when applying for loan deferment.
What are the outcomes?
You can defer your loan repayments until the end of 2020 but after that, the loan amount and the interest built upon the deferred loan will have to be fully paid off over the remaining loan period. This application will not affect your credit bureau report.
Deferring Commercial or Industrial Property Loans
How to defer commercial/industrial property loans?
For any commercial or industrial property loan commitments, you can defer only the loan amount up to 31 Dec 2020. Similarly, interest will not be accumulated on the deferred interest payment.
Who is eligible?
Anyone! However, you must not have any outstanding repayments as of 1 Feb 2020. This is on an opt-in basis, and you don’t have to show how you were impacted by Covid-19. You will also not be subjected to the TDSR when applying for loan deferment.
What are the outcomes?
When you apply to defer your loan repayments, you can choose to extend the loan repayment period up to the corresponding deferment period. This application will also not affect your credit bureau report.
Deferring New Mortgage Equity Withdrawal Loans
How to defer new mortgage equity withdrawal loans?
For any mortgage equity withdrawal loans secured on any residential, commercial or industrial properties, you can defer loan repayments on the loan amount or both the loan amount and interest up to 31 Dec 2020. However, this option may be different depending on your bank/financial company.
Who is eligible?
Anyone with mortgage equity withdrawal loans granted on/after 6 Apr 2020. This is on an opt-in basis, and you don’t have to show how you were impacted by Covid-19.
What are the outcomes?
Similar to deferring your residential property loan, there will be no change to your loan period. After deferring your loan repayments, the loan amount and interest will need to be fully paid off over the remaining loan period. This application will also not affect your credit bureau report.
Refinancing and Repricing of Investment Property Loans
What is refinancing/repricing of investment property loans?
If you have any investment property loans, you may apply to switch your existing mortgage with another bank or obtain a new property loan with your current bank. You will not be subjected to the TDSR or the MSR.
What are the outcomes?
After repricing your loans, and you still don’t meet the TDSR or MSR, you will not be required to commit to a debt repayment plan. This means you get to lower your monthly payments to ease your cashflow. However, do consider the penalties if you choose to refinance or reprice your loans during the lock-in period.
Can You Defer Your Renovation Loan?
Apart from property loans, the Special Financial Relief Programme’s support measures also aim to help individuals with other loan commitments including renovation, car and tuition loans.
How to defer your renovation loan?
If you are currently taking a loan to pay for renovations, you can also choose to defer repayments of both the loan amount and interest up to 31 Dec 2020. Interest will not be accumulated on the deferred interest payments, but only on the loan amount.
Who is eligible?
Anyone. This is on an opt-in basis - you can apply as long as your loan repayments are not due for more than 90 days, and you don’t have to prove how you were affected by Covid-19.
What are the outcomes?
After the loan deferment, the loan amount and the interest built upon the deferred loan will be fully paid off over the remaining loan period. This application will not affect your credit bureau report.
Can You Defer Your Car Loan?
Next to housing loans, car loans are the most expensive among borrowing commitments. However, the conditions for getting your car loan deferred is a bit different - it’s approved on a case-by-case basis only.
How to defer your car loan?
If you are currently repaying your car loan, and are affected by Covid-19, you can approach your respective banks/finance company to discuss a suitable repayment plan.
Who is eligible?
This is subjected to a case-by-case assessment. Your financial condition, your need for a car, current market value of the car and its estimated market value after the deferment period will be taken into account during the assessment.
What are the outcomes?
You can discuss with your bank for an extension on the loan tenure, so you can ease your monthly instalments when you resume regular repayments. This application will not affect your credit report.
Can You Defer Your Education Loan?
In light of the difficult job climate for fresh graduates, MAS has also granted Covid-19 relief measures on education loans.
How to defer your education loan?
For students or graduates with loans for tuition fees, you can now apply to have the payment of both your study loan and the interest up to 31 Dec 2020. Interest will only be accrued on the loan amount, and interest-on-interest will be waived.
Who is eligible?
If you’re a full-time or part-time student at a local or private tertiary institution, you can opt-in for deferment of your education loan. You can apply for this as long as your loan repayments are not 90 days past due at the point of application. You don’t have to prove how you are affected by Covid-19.
What are the outcomes?
After deferring your loan repayments for 2020, you will need to pay off the loan amount and interest over the remaining loan period. This application will not affect your credit bureau report.
What If You Need More Cash?
While these loan deferment programmes should go a long way in easing your budget - at least in the short term - there are some who may still need more cash for other expenses not covered here. A personal loan is one way to get through the cashflow crunch. Proceed with caution, though: Make sure you have a good fundraising plan to repay your loan, and don't forget to compare providers to get the lowest interest rates in Singapore.
What About Credit Cards and Other Unsecured Debt?
In addition to easing cashflow for us, the support package also aims to help us to reduce debt obligations and ensure affordable banking services for everyone. This comprises lowering of interest rates on unsecured debt (credit card and personal loans), extension of Debt Consolidation Plans and waiver of fall-below fees.
Lower Interest on Credit Cards and Credit Lines
How to get lower interest on personal unsecured credit?
If you have any unsecured debts from any of your credit cards or credit lines, you can apply to convert these debts into a term loan anytime from 6 Apr to 31 Dec 2020.
Who is eligible?
Only for Singaporeans and PRs. This is on an opt-in basis. You would have to show proof that as of 1 Feb 2020, there is at least a 25% loss in income due to Covid-19.
What are the outcomes?
By converting your credit card debt into a term loan, you would be allowed a much lower interest rate of 8% p.a. (compared to almost 30% p.a. for credit card/line). A maximum time period of 5 years is given for you to finish paying these loans, based on your financial capability to commit to a monthly repayment. There will be no penalties on early repayments, and your credit bureau report will not be affected in any way.
Extension of Debt Consolidation Plans (DCP)
How to apply for extension of DCP?
If you are on a debt consolidation plan, you can apply for an extension of the loan tenure for up to 5 years, anytime from 18 May to 31 Dec 2020.
Who is eligible?
Anyone on a debt consolidation plan. This is on an opt-in basis. You would be asked to show how Covid-19 has affected your income. At the time of application, your repayments should be between 30 to 90 days past due to be eligible for this extension programme.
What are the outcomes?
This will help you ease your cashflow if your income is affected by Covid-19, without affecting your credit bureau report.
Waiver of Fall-Below Fees and GIRO Charges
How to apply for waiver of charges?
If you are unable to meet the minimum sum maintained in your bank accounts, you can apply to have the fall-below service fees waived up to 31 Dec 2020. Additionally, you can apply to waive off any bank fees for any failed GIRO deductions up to 31 Dec 2020 as well.
Who is eligible?
Anyone. However, you would be asked to prove the impact of Covid-19 on your income. This will be on an opt-in basis.
What Are the Support Measures for Insurance Payments?
On top of support measures for debts and loans, the support package also helps individuals reduce their insurance payment commitments this year. You can either defer your premium payments or opt for a flexible premium instalment plan (depending on what type of insurance you have).
Life and Health Insurance Policies
What are the support measures available?
If you own any life and long-term health policies, you can apply to your insurance company to defer premium payments for up to 6 months while keeping the insurance coverage during this period.
Who is eligible?
For policyholders facing financial difficulties, you can apply to defer premium payments for life and health insurance policies with premium due dates between 1 Apr to 30 Sep 2020.
General Insurance Policies
What are the support measures available?
If you own other general insurance policies, for your cars or homes, you can apply for a flexible instalment payment plan with your insurance company, while keeping the full insurance protection during this period.
Who is eligible?
You can apply as long as you are facing financial difficulties and find it hard to pay for premiums during this period.
Business Loan Assistance - What Are the Options for SMEs?
Before you apply for any of the support measures, please ensure you meet the following criteria for the package. To be classified as SMEs and be eligible for this package, your business should only have annual sales turnover of S$100m or less and have employment size of 200 or less workers.
Deferring Secured SME Term Loans
How to defer your secured loans for your business?
You can apply to defer payment of the loan amount and only pay for interest up to 31 Dec 2020, on all fully secured loans.
Who is eligible?
Anyone. You would not need to demonstrate any impact from Covid-19. However, this is on an opt-in basis, only for business owners whose loan payments are less than 90 days past due as of 6 Apr 2020. The request may be granted upon request, but maybe denied in exceptional cases.
Lower Interest on SME Loans
What are the features?
Loans from MAS will be at an interest rate of 0.1% p.a. for a 2-year loan tenure.
Which institutions does this apply to?
You can expect this lowered interest rates for SME loans from banks and finance companies participating in Enterprise Singapore’s Enhanced Enterprise Financing Scheme – SME Working Capital Loan and Temporary Bridging Loan Programme. These can lower borrowing costs for businesses.
Frequently Asked Questions
Where can I find the latest on the Covid-19 financial relief packages?
- The government has been very responsive in dealing with the coronavirus crisis, from all aspects. For the latest updates on the Covid-19 relief packages, such as new measures, extension of the deferment period and changes to the eligibility criteria, we recommend checking out https://www.mas.gov.sg/regulation/covid-19.
Can I defer only part of my loan repayments?
- These arrangements may differ between different banks/finance companies. It is advisable that you approach your respective banks to discuss a suitable deferment plan.
Can foreigners apply for loan deferment under the Covid-19 Special Financial Relief Programme?
- Yes. Most of the measures under the Covid-19 Relief Package are open to anyone as long as they meet the eligibility criteria. There is, however, an exception to obtaining a lower interest on your personal unsecured debt, which is only open to Singaporeans and PRs.
What happens if the Covid-19 situation does not improve by 31 Dec 2020?
- MAS will continue to monitor the situation closely, and will assess if any additional measures will be needed. In the meantime, you can follow the MAS page closely for any updates.
The MoneySmart Covid-19 Survival Guide
Looking for more financial advice around Covid-19 in Singapore? Head over to our coronavirus microsite for info on government assistance schemes, circuit breaker tips, and personal finance tips for surviving the pandemic.
Want more MoneySmart in your Google results?
One tap, and we'll turn up more often when you search for money answers.