It is advisable for borrowers to confirm for any loan curbs. This is before you use any use the personal loan, car loan, renovation loan, or mortgage. This will help you know the amount you may borrow. The Singaporean Monetary Authority (MAS) presently has set loan curbs on unsecured loans. This limits the amount you may borrow to about 18 months of a borrower’s income. From 1st June 2019, the curb will be reduced to 12 months of a borrower’s income.
This will ensure Singaporeans do not over-borrow and face financial difficulties as this would have negative impacts on the whole economy. Below are other loan limits you need to know about then you can find out the amount you may borrow. You will also know the amount you have to repay in cash.
The largest loan amount you may borrow for home loans will depend on if you will use the private bank loan or HDB Concessionary loan. For HDB loans (just for the HDB flats, omitting Executive Condominiums). You could borrow about 90% of your flat’s value or selling price — the one that is lower. For Executive Condos and private homes, you could have to utilize the bank loan. You could borrow about 80% of selling price or property value, the one that is lower.
To add to this, in Singapore property loans come with an additional cap. That is the TDSR (Total Debt Servicing Ratio). It is essential that you ensure that the total monthly payments do not exceed 60% of monthly wages. This includes other loans after you borrow a home loan.
Car loan caps depend on the vehicle Open Market (OMV). For vehicles with a market value of S$20,000 and below, their loan is limited to 70% of vehicle total price. (it includes the Entitlement Certificate (COE), and any other taxes. Those cars with a market value above $20,000, their loan are curbed at 60%.
Renovation and Furnishing Loans
When you need major work on your house, the easy solution is to get a renovation loan. The loan will provide borrowers to about six times their monthly salary, or S$30,000 whichever is higher. Keep in mind that there is usually a minimum credit amount of S$10,000 as well.
Regarding furnishing loans (for buying lamps, new beds, tables, etc.). The curb is at six months of your monthly wages. Realize that furnishing loans and renovation loans are two distinct loans. Therefore, you could borrow S$30,000 as a renovation loan. Then to about six months of their wages for furnishing loan later on. Be sure to talk to your lender about this.
Most credit lines and individual credit cards limit your loans. This can be either to 2-4 times your income for each month. This, however, depends on the issuing Singapore top legal money lender’s policy for personal loans. The total of unsecured loans that a borrower can have, on all their credit lines, credit cards, or personal loans, is set to 18 times the monthly salary. Once exhausted the cap limit, any attempts to borrow more will be declined automatically.