Coronavirus: Individuals can apply for deferral of home loans and insurance premium payments; Singapore SMBs Get Cash Flow Assistance, Bank News, and Top Stories
SINGAPORE – Individuals can apply to their banks and insurance companies to delay repayment of home loans and premium payments for life and health insurance plans as part of a package of measures to ease their financial burden from the Covid-19 outbreak.
The package, which was approved by the Monetary Authority of Singapore (MAS) and the financial sector on Tuesday (Jan.
It will also help keep interbank finance markets liquid and functioning well, the MAS added.
“In the months ahead, many Singapore individuals and SMEs will continue to face challenges in managing their cash flows and meeting their financial obligations such as loan repayments and insurance premiums,” said the MAS.
The regulator worked with the Association of Banks in Singapore, the Life Insurance Association, the General Insurance Association and the Finance Houses Association of Singapore to take a number of measures.
Measures that help individuals include the ability to defer either the principal or both the principal and interest payments on their home loan until December 31st.
Interest accrues only on the deferred principal, and no interest is charged on the deferred interest payments, according to the MAS.
Lenders will approve the deferral request if the applicant is no more than 90 days in arrears as of April 6, 2020.
Applicants also do not need to demonstrate that they were affected by the effects of Covid-19 in order to obtain approval.
Those with unsecured loans can also apply to their lenders to convert their outstanding balances into term loans at a reduced interest rate of no more than 8 percent.
That’s lower than the 26 percent typically charged on credit cards, MAS noted.
Life and health insurance customers can apply to their insurer to postpone the premium payment for up to six months while maintaining the insurance cover.
The deferral of premiums is possible for all individual life and health insurances with a contract extension or a premium due between April 1st and September 30th.
General policyholders, e.g. B. for property and motor vehicles, can apply to their insurers for installment payment plans while maintaining the protection.
SMEs can defer repayments of their secured term loans until December 31, subject to assessments of the quality of the collateral by banks and financial firms.
They can also extend the term of their loans by the corresponding repayment period.
This relief is available to SMEs that continue to pay interest and have a good reputation with their banks and finance companies.
Banks and financial firms can also apply for low-cost funding through a new MAS Singdollar Facility for loans granted under Enterprise Singapore’s SME Working Capital Loan Program and Temporary Bridging Loan Program.
Banks and financial companies can apply for these funds until the end of December, provided they undertake to pass the saved financing costs on to their medium-sized borrowers.
The initiative aims to lower interest rates for eligible SME borrowers, and details will be announced at a later date, the MAS said.
“The deferral of payments increases future obligations, so borrowers and policyholders should weigh their options carefully,” the MAS said.
Applications open on April 1st for insurers and on April 6th for banks.