Source: MAS Singapore
Individuals can now apply to their banks and insurers to defer repayment of property loans, as well as premium payments for life and health insurance plans, as part of a package of measures to ease their financial strain arising from the Covid-19 outbreak - allowing them to defer either principal payment or both principal and interest payments on their residential property loans until 31 Dec 2020.
The package, rolled out by the Monetary Authority of Singapore (MAS) and the financial sector on Tuesday (31 March 2020), also offers cash flow support to small and medium-sized enterprises, such as by ensuring continued access to bank credit and insurance cover. It will also help to ensure that interbank funding markets remain liquid and well-functioning, the MAS added.
MAS anticipates many individuals and SMEs in Singapore to face challenges in managing their cash flows and meeting their financial obligations, such as loan repayments and insurance premiums and therefore worked with the Association of Banks in Singapore, the Life Insurance Association, the General Insurance Association and the Finance Houses of Association of Singapore for the slew of measures to help individuals, i.e. allowing them to defer either principal payment or both principal and interest payments on their residential property loans until 31 Dec 2020. Interest will accrue only on the deferred principal amount, and no interest will be charged on the deferred interest payments, the MAS said.
Lenders will approve the request for deferment if the applicant is not in arrears for more than 90 days as at April 6, 2020. Applicants also do not need to show that they had been hit by the Covid-19 fallout to obtain approval. Those with unsecured loans can also apply to their lenders to convert their outstanding balances into term loans at a reduced rate of interest, capped at 8 per cent. This is lower than the 26 per cent typically charged on credit cards, MAS noted.
The package, rolled out by the Monetary Authority of Singapore (MAS) and the financial sector on Tuesday (31 March 2020), also offers cash flow support to small and medium-sized enterprises, such as by ensuring continued access to bank credit and insurance cover. It will also help to ensure that interbank funding markets remain liquid and well-functioning, the MAS added.
MAS anticipates many individuals and SMEs in Singapore to face challenges in managing their cash flows and meeting their financial obligations, such as loan repayments and insurance premiums and therefore worked with the Association of Banks in Singapore, the Life Insurance Association, the General Insurance Association and the Finance Houses of Association of Singapore for the slew of measures to help individuals, i.e. allowing them to defer either principal payment or both principal and interest payments on their residential property loans until 31 Dec 2020. Interest will accrue only on the deferred principal amount, and no interest will be charged on the deferred interest payments, the MAS said.
Lenders will approve the request for deferment if the applicant is not in arrears for more than 90 days as at April 6, 2020. Applicants also do not need to show that they had been hit by the Covid-19 fallout to obtain approval. Those with unsecured loans can also apply to their lenders to convert their outstanding balances into term loans at a reduced rate of interest, capped at 8 per cent. This is lower than the 26 per cent typically charged on credit cards, MAS noted.
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Customers of life and health insurance policies can apply to their insurer to defer premium payments for up to six months while maintaining insurance coverage. Premium deferment is available for all individual life and health insurance policies with a policy renewal or premium due date between April 1 and Sept 30. General insurance policyholders for property and vehicles may apply to their insurers for instalment payment plans while maintaining protection.
"Deferring payments increases future obligations and hence borrowers and policyholders should weigh their options carefully," said the MAS. Applications open on April 1 for insurers, and April 6 for banks.
"Deferring payments increases future obligations and hence borrowers and policyholders should weigh their options carefully," said the MAS. Applications open on April 1 for insurers, and April 6 for banks.
Straits Times article - 31 March 2020
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