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Assorted freehold properties portfolio for sale by Expression of Interest

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Author: Ravi Philemon

Comprising two mixed-use buildings, two shophouse and six industrial units an assorted freehold properties portfolio for sale by Expression of Interest

CBRE announced on April 1 that it pleased to launch for sale, via Expression of Interest, a portfolio of income-producing freehold properties which is segregated into two clusters – enbloc buildings and strata-titled units. Buyers have the option to purchase them either on a cluster basis or collectively as one portfolio.

Enbloc building cluster of assorted freehold properties portfolio:

Assorted freehold properties portfolio

Comprising two mixed-use buildings, two shophouse and six industrial units an assorted freehold properties portfolio for sale by Expression of Interest (Image: CBRE)

104 & 106 Jalan Jurong Kechil 
Built in the late 1980s, 104 and 106 Jalan Jurong Kechil is a 4-storey development comprising two F&B shops on the ground floor, two commercial schools on the second floor and 16 residential units on the third and fourth floors. Sitting on a 3,623-square-foot land zoned “Residential with commercial at first storey”, the property has a maximum permissible gross floor area of approximately 8,507 square feet. The property has undergone extensive A&A works in 2016 and is fully tenanted as at 31 March 2020.

Stephen Ho, Head of Residential Services at CBRE, says, “This property presents a valuable opportunity to acquire a single income-producing asset of freehold tenure within the mature and affluent Bukit Timah district, one of Singapore’s largest private landed residential enclaves. As the property comes with six strata titles, the successful buyer will have the flexibility for strata sell-down in the future.”

261 Outram Road
261 Outram Road is a 4-storey pre-war conservation block with an estimated built-up area of 7,325 square feet. It sits on a 2,276-square-foot site zoned “Residential with commercial at 1st storey” under the 2019 Master Plan. The property is fully tenanted to a fitness gym on the ground floor and a co-living operator on the upper floors. Located directly opposite YWCA Outram Centre, the property is within five minutes’ walk from Havelock MRT station on the Thomson-East Coast line that is scheduled to be operational end-2021.

Mr Ho adds, “As this property was extensively refurbished in 2016, we do not foresee any large capital expenditure required in the near future. With a prominent frontage along Outram Road, the property is suitable for owner-occupiers who are looking for building naming and signage rights.”

Strata-titled unit cluster: 

101 and 101A Soo Chow Walk 
101 and 101A Soo Chow Walk is a corner two-storey shophouse with total strata floor area of 3,477 square feet. The property sits on a site listed under the two-storey envelope control and street block plan and is zoned for full commercial usage.  Featuring a long frontage of approximately 35 metres along Soo Chow Walk and Lor Mega, the shophouse is currently tenanted to a commercial school.

Located off Upper Thomson Road, the property is a one-minute walk to the Upper Thomson MRT station, which is slated to open by the end of this year. The property is open to both local and foreigner buyers with no additional buyers’ stamp duty (ABSD) or sellers’ stamp duty (SSD) imposed on the purchase of the property.

Assorted freehold properties portfolio consist of six units at Ann Chuan Complex

Ann Chuan Complex is a six-storey light industrial building located at 115 King George’s Avenue. The total strata floor area of the six strata-titled units is approximately 9,999 square feet. Apart from the ground-floor unit that is approved for F&B use, the remaining five units are to be used for light industrial activities. The 3,401 square foot ground-floor unit is currently tenanted to a hipster café. The property is a short five-minute walk to both Lavender and Bendemeer MRT stations.

Clemence Lee, Senior Director of Capital Markets at CBRE says, “The portfolio presents a unique opportunity to acquire various income-producing asset types at one go.  What’s more, these freehold properties are located in Singapore’s popular districts – Bukit Timah, Tiong Bahru and Lavender and are commanding a price that is palatable to the market.”

“At an indicative price of S$51 million for the entire portfolio, it translates to about S$1,740 per square foot on the total floor area of 29,308 square feet. The portfolio’s yield is approximately 3% based on the 95% occupancy as at 31 March 2020.

On a cluster basis, we expect offers within the ballpark of S$30 million for the enbloc buildings at Jalan Jurong Kechil and Outram Road, which works out to about S$1,895 per square foot on the maximum permissible gross floor areas. Separately, the indicative price for the strata-titled unit cluster is in the range of S$21 million, which works out to about $1,558 per square foot on the strata floor area.”

Mr Ho adds, “Due to the assorted nature and high occupancy rate of the portfolio, we expect strong interest from a varied pool of both local and foreign buyers who are seeking such income-producing properties for immediate rental income stream, yet still have the potential of capital appreciation in the medium to long term.

“We have observed increasing enquiries from investors, including family offices and high net worth individuals, who are looking to reallocate their funds from the stock market into real estate for more stable returns. We believe that more investors will turn into real estate as a defensive instrument play, in view of the current low interest rate environment.”

CBRE is the sole marketing agent for the Expression of Interest exercise for this assorted freehold properties portfolio, which closes on 6 May 2020 at 3pm.

Mr Paul Ho, chief mortgage officer at iCompareLoan, said: “assorted freehold properties portfolio should appeal to buyers because of being freehold they fetch better value and also the location.”

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Coronavirus crisis will prove survival of the fittest

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https://i0.wp.com/www.propertysoul.com/wp-content/uploads/2016/12/cropped-heading.jpg?fit=32%2C32&ssl=1 Author: Property Soul

Survival of the fittest is a Darwinian evolutionary theory that believes during natural selection the weak die, leaving only the strongest to continue living and reproduction. With coronavirus lingering for over two months, we learn that this disease is unbiased during infection but discriminatory in fatality. We all have equal chances of getting it. But… [read more]

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Temporary Bridging Loan Programme rolled out to provide working capital

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Author: Ravi Philemon

Temporary Bridging Loan Programme (TBLP) to provide access to working capital for business needs

By: Hitesh Khan/

As announced at Supplementary Budget 2020, eligible enterprises may borrow up to $5 million under the Temporary Bridging Loan Programme, with the interest rate capped at 5% p.a., from Participating Financial Institutions (PFIs). The Government will provide 80% risk-share on these loans.

Temporary Bridging Loan Programme

(image: OCBC)

Eligible enterprises under the Temporary Bridging Loan Programme may also apply for up to 1 year deferral of principal repayment to help manage their debt, subject to assessment by the PFIs.

The Temporary Bridging Loan Programme started in March 2020, and is available until 31 March 2021. Interested enterprises can apply directly to the PFIs.

MAXIMUM LOAN QUANTUM
S$5 Million / Borrower Group1
MAXIMUM REPAYMENT PERIOD
5 years
RISK-SHARE
The borrower is responsible to repay 100% of the loan amount. When defaults occur, the PFIs are obligated to follow their standard commercial recovery procedure, including the realisation of security, before they can make a claim against Enterprise Singapore for the unrecovered amount in proportion to the risk-share
INTEREST RATE
Capped at 5% p.a.

1 Borrower Group consists of the following:

a. Borrower; and
b. Corporate shareholders that hold more than 50% of the total shareholding of the applicant company, and any subsequent corporate parents (all levels up), and subsidiaries all levels down. (Annual sales turnover and employment size is computed on a group basis.)

Eligibility for Temporary Bridging Loan Programme

  • Be a business entity that is registered and physically present in Singapore. (ACRA registered Sole Proprietorship, Partnership, Limited Liability Partnerships and Companies are eligible to apply for the Temporary Bridging Loan. Approval of the loan is subject to the PFI’s assessment.)
  • At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership.

What Is Bridging Loan?

Bridging loan is also a short-term financing option. However, the main purpose of bridging loan is to ‘cover’ (or bridge) the gap between an incoming debt and the time till your credit is ready.

How Does Bridging Loan Work?

The best way to explain how a bridging loan works is by giving an example. So, imagine if you just sold your house. It will take a while before you receive proceeds from the sale, isn’t it? But what happens if you need the money to pay for your down payment to purchase your new home? This is where bridging loan can come in and help to pay for your new home while you wait for sales proceeds from your existing property.

What Is The Duration Of Bridging Loan?

Since bridging loan is a type of short-term financing, the bank/financial institution will generally offer you 6-12 months of loan period. You will need to fully repay the loan after a relatively short period.

2 Types Of Bridging Loan: Capitalised Interest Bridging Loan & Simultaneous Repayment Bridging Loan

Capitalised Interest Bridging Loan

Under the capitalised interest bridging loan, the bank/financial institution will finance your new home (up to 80%). Once the sale of your current property is completed, the repayment of the bridging loan will start. Interest will be accrued and payable to the bank/financial institution for the whole period of your bridging loan.

Simultaneous Repayment Bridging Loan

But even if you haven’t sold your property yet, you can still take a bridging loan. This is the purpose of the simultaneous repayment bridging loan. The simultaneous repayment bridging loan is for homeowners who have the intention to sell off your current property. But you might not have found a suitable buyer yet. In such cases, you can take the simultaneous repayment bridging loan to pay for your new home while continuing to pay off the home loan for your current property. The bank/financial institution will likely give you up to 12 months to sell off your property. After which, you will need to repay your bridging loan once you receive the sales proceeds.

What Do You Need To Qualify For A Bridging Loan?

In order to qualify for a bridging loan, you will need to show proof that you are waiting for sales proceeds from your previous property. This can work by providing the Option to Purchase (OTP) agreement document that is signed by the buyer.

Is Bridging Loan Only Limited To Private Property Owners?

Bridging loans do not have a specific target audience. Regardless of whether you are a private property or HDB owner, you will be able to apply for a bridging loan as long as you have the OTP agreement for your current property. It also doesn’t matter whether the property you are selling away is an HDB or private property.

Where Can You Get A Bridging Loan?

Bridging loans are offered by most financial institutions and banks in Singapore. Typically, if the bank or financial institution offers home loan, it will also offer bridging loan to you.

For bridging loan, the interest rate payable is pretty stable across the industry. Banks and financial institutions are likely to offer very similar interest rates to each other. Bridging loan can help you in your bid to become a multi-property owner? Get in touch with iCompareLoan where our loan specialists will show you how to leverage on bridging loan in your second property purchase.

A good place to start looking for temporary bridging loan is with loan consultants. Loan consultants have good links with multiple lenders and can help you lend the best deals with the lowest interest rates. The services of loan consultants are usually free – which is why you should not hesitate consulting one.

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Long lease Loyang Industrial site up for sale at $8.8 million

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Author: Ravi Philemon

Long lease Loyang Industrial site up for sale by Expression of Interest closing on Wednesday 13 May 2020, 3 pm.

JLL today announced the sale of 32 Loyang Crescent , an industrial site with a long remaining lease located within the Loyang Industrial Estate.

JLL is the exclusive marketing agent for the long lease Loyang industrial site

long lease Loyang industrial site

(Image: JLL)

The long lease Loyang industrial site consists of a 2-storey main building with a 4-storey extension annexed behind. The asset has two entrances and houses production spaces with cranes, warehousing and ancillary offices that are readily in operational status.

The long lease Loyang industrial site yahas a total gross floor area (GFA) of approximately 36,902 sq ft, sitting on a site of approximately 45,439 sq ft with a remaining tenure of about 31 years. In the Master Plan 2019, the long lease Loyang industrial site has a Business 2 zoning with a plot ratio of 2.5.

In addition to a good frontage along Loyang Crescent, this site is accessible via Tampines Expressway (TPE), Pan-Island Expressway (PIE) and public transport to Pasir Ris MRT is available at the door-step. It is also well supported by eateries and amenities in the vicinity.

Mr Nicholas Ng, Senior Director of Capital Markets at Jones Lang LaSalle, comments: “The long lease of this site, coupled with a ready to move in facility will be attractive for end users who are looking for a place for their operation and future expansion. There is still an untapped gross floor area of 76,697 sq ft for the subject property as it is only currently built up to a 0.81 plot ratio.”

“The subject property comes with an annex building comprising of a 4 –storey warehouse space with 6 metre ceiling height on each floor. Located in close proximity to the Loyang offshore supply base and Changi Airport, this asset would be a good fit for logistics companies who wish to establish a base in Loyang, or any other businesses that require a Business 2 zoning to operate in.“

The vendors, a supplier of heavy equipment and spares serving the oil and gas industry are seeking offers for the long lease Loyang industrial site in the region of S$8.8 million.

The long lease Loyang industrial site will be sold by Expression of Interest, which will close at 3pm on Wednesday 13 May 2020.

The JTC industrial property market statistics showed that overall rents across Singapore’s industrial sector remained unchanged quarter-on-quarter (QOQ) in Q4 2019, the second straight quarter of no-change. For the full year 2019, industrial sector rents were up 0.1% year-on-year (YOY), mainly due to the improvement in business parks.

Commenting on the industrial market performance in the last quarter of 2019, Mr Desmond Sim, CBRE’s Head of Research for Southeast Asia, said, “the factory submarket displayed mixed performances this quarter. The JTC Single-User Factory Rental Index inched up by 0.1% q-o-q, whereas occupancy rate fell by 0.3 percentage points q-o-q to 90.8%, partly because of excess supply from previous quarters which is still in the midst of being absorbed by the market.”

The JTC Multiple-User Factory Rental Index on the other hand eased by 0.1% q-o-q, which can be mainly attributed to the West region where a large pool of existing vacant stock remains; this is despite that the islandwide occupancy rate increased by 0.4 percentage points q-o-q to 87.5%.

Mr Sim added, “The warehouse sector saw an improvement from its slowdown from preceding quarters, with the JTC Warehouse Rental Index edging up by 0.1% q-o-q. However, it was also noted that warehouse occupancy dipped marginally by 0.1 percentage points q-o-q to 88.0%. Nonetheless, it is likely that the tight upcoming warehouse supply will lend support to occupancy.”

CBRE said that moving forward, with overall industrial rents remaining unchanged this quarter, there is some optimism that rents may have bottomed out in the industrial market.

CBRE Research is of the view that warehouse rents are poised to be more resilient, supported by a limited supply pipeline. Meanwhile, factory rents are expected to stay flat in 2020, suppressed by a prevailing vacancy volume of 40.1 million sq ft and a substantial amount of upcoming multiple-user factory stock.

Dominic Peters, Senior Director of Industrial Services at Colliers International, commenting on industrial market said:

“The Singapore manufacturing sector is expected to improve slowly in the coming quarters on the back of a gradual recovery of the global electronics cycle, driven by the normalisation of inventory in the global electronics supply chains, and the adoption of 5G technologies in telecommunication equipment and smartphones. However, with new supply of factory space in 2020 remaining sizable at around 15.6 million sq ft (net) – equivalent to about 4% of current factory stock – we anticipate that overall factory rent will likely remain subdued as supply outstrips demand in 2020.

Warehouse supply is set to increase to 3.6 million sq ft in 2020 (net) – equivalent to about 3% of current warehouse stock. Given the challenging global trade outlook and the elevated vacancy rate of 12.0% at the end of 2019, we expect warehouse rent to remain soft, stabilising in 2020-2021 before recovering from 2022 as supply diminishes.

Meanwhile, we forecast the flight to quality in business park and high-specs segments to continue due to limited supply amid higher demand for premium space. Centrally-located business parks and high-spec buildings with good amenities should attract healthy demand while those older and further away from MRT stations in the suburbs could face more difficulty in finding tenants, despite lower rents. Overall, we expect business park and high-specs rents to see slight upticks in the coming quarters, increasing by 1-2% YOY by the end of 2020.”

Brenda Ong, Cushman & Wakefield’s executive director and head of logistics and industrial, said she expects industrial rents for multi-user factories and single-user factories to moderate against an increase in supply in 2020.

Ms Ong added, “The single-user factory segment recorded some negative absorption as industrialists gave up or reduced their footprints in the space required for their business. Warehouse rents are also expected to stabilise and increase marginally because of healthy take-up in the past year, which we envisage will continue in 2020.”

But Tay Huey Ying, head of research and consultancy at JLL Singapore, says: “The industrial property market remains exposed to downside risks in 2020. While there are nascent signs of a turnaround in the manufacturing sector and economic growth is expected to pick up in 2020, this could be derailed by unexpected external events such as the Wuhan virus.”

She added: “Barring any unforeseen external shocks, we expect demand prospects to remain uneven across the various industrial property segments. Industrial developments with higher building specifications catering to the needs of new-economy firms (e.g. technology companies) and firms from higher value-added industries are likely to outperform the broader market.”

Ms Tay expects a surge in new business park completions this year. She noted that “five of the seven upcoming projects are purpose-built facilities with pre-commitments from major occupiers like Grab, Wilmar International and TÜV SÜD. Moreover, efforts by landlords to spruce up their older assets should enhance their marketability and ability to command higher rents on completion of upgrading works.”

Mr Paul Ho, chief mortgage officer at iCompareLoan, said, “commercial properties obviously command more rents than real estate like the long lease Loyang Industrial site .”

He added, “any newer industrial properties sitting on Business 1 (B1) zones are increasingly sophisticated and looking like Commercial buildings. In fact you might not even tell them apart unless you refer to the URA Zoning Master Plan. Since industrial B1 zones are better located nearer to housing estates or regional centres and no longer mainly in Jurong, there is substantial advantage to break the zoning rules.”

Mr Ho noted that with the rolling out of the 5G wireless network and with Singapore’s being at the forefront of smart nation initiatives, the industrial market as a whole will remain optimistic.

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Relief measures to ease financial strain for SMEs and individuals introduced

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Author: Ravi Philemon

MAS and Financial Industry to Introduce Relief Measures to Support Individuals and SMEs Affected by the COVID-19 Pandemic

The Monetary Authority of Singapore (MAS), together with the Association of Banks in Singapore (ABS), the Life Insurance Association (LIA), the General Insurance Association (GIA), and the Finance Houses Association of Singapore (FHAS), today announced a package of relief measures to help ease the financial strain on individuals and SMEs caused by the COVID-19 pandemic. The package of financial relief measures complements the initiatives in the Government’s Unity Budget and Resilience Budget to preserve jobs and support enterprises and households.

relief measures

MAS and Financial Industry to Introduce Relief Measures to Support Individuals and SMEs Affected by the COVID-19 Pandemic

The COVID-19 outbreak is now global, and increasing in intensity. Stringent relief measures are being adopted around the world to contain the virus, severely curtailing economic activity. Uncertainty about the trajectory of the pandemic and the depth and duration of an economic recession have also created strains in financial markets globally, which can in turn accentuate the economic crunch.

The Singapore economy contracted sharply in the first quarter of this year, faced with the sudden decline in external demand, disruption in supply chains, and reduced spending at home. MAS expects the economy to remain weak beyond the first half of the year.

In the months ahead, many individuals and SMEs in Singapore will continue to face challenges in managing their cash flows and meeting their financial obligations, such as loan repayments and insurance premiums.

MAS and the financial industry have collaborated on a package of relief measures to help individuals and SMEs facing temporary cashflow difficulties to ride through the storm.  The package has three components:

  • help individuals meet their loan and insurance commitments;
  • support SMEs with continued access to bank credit and insurance cover; and
  • ensure interbank funding markets remain liquid and well-functioning.

The relief measures for individuals and SMEs will be provided on an opt-in basis, as their  cashflow circumstances will differ.

Deferring payments increases future obligations and hence borrowers and policyholders should weigh their options carefully. Financial institutions will process all applications expeditiously.

Helping Individuals with Loan and Insurance Commitments

Defer Repayment of Residential Property Loans

Individuals with residential property loans may apply to their respective bank or finance company to defer either (i) principal payment or (ii) both principal and interest payments up to 31 December 2020.

Interest will accrue only on the deferred principal amount; no interest will be charged on the deferred interest payments.  Lenders will approve the request for deferment as long as the individual is not in arrears for more than 90 days as at 6 April 2020. Individuals do not need to demonstrate any impact from COVID-19 to obtain the deferment.

Lower Interest on Personal Unsecured Credit

Individuals with unsecured credit facilities from banks or other credit card issuers may apply to their respective lender to convert their outstanding balances to term loans at a reduced rate of interest, capped at 8% (compared to the 26% typically charged on credit cards).  The term of the converted loan can be up to five years, depending on the individual’s ability to meet the minimum monthly repayment. (The monthly repayment amount for a five year term loan at 8% effective interest rate will be at less than 2% of the loan amount.)

This option is available to all individuals who have suffered a loss of 25% or more of their monthly income after 1  February 2020 and are at risk of incurring substantial arrears. Individuals may apply to their lenders for conversion of their outstanding unsecured debt from 6 April till 31 December 2020.

Defer Premium Payments for Life and Health Insurance

Individuals with life and health insurance policies may apply to their insurer to defer premium payments for up to six months while maintaining insurance coverage during this period. Premium deferment is available for all individual life and health insurance policies with a policy renewal or premium due date between 1 April and 30 September 2020.  This measure supplements existing premium relief measures available to policyholders, such as taking up a premium loan against the policy cash value or converting to a paid-up policy by reducing the sum assured.

Flexible Instalment Plans for General Insurance

Individuals holding general insurance policies, such as for property and vehicles,  may apply to their general insurance company for instalment payment plans while maintaining insurance protection. By working with their insurance company on an appropriate instalment plan, policyholders can pay their premiums in smaller amounts and enjoy coverage for the paid-up period, instead of paying a lump sum premium for the entire policy period at the start.

Supporting SMEs with Access to Bank Credit and Insurance Cover

Banks and finance companies in Singapore have committed to help ease the financial strain on SMEs arising from the need to make principal repayments on their loans during this period, in view of the temporary cashflow constraints that many may face.

Defer Payment of Principal on Secured SME Loans

SMEs may opt to defer principal payments on their secured term loans up to 31 December 2020, subject to banks’ and finance companies’ assessment of the quality of the SMEs’ security.  SMEs will also be able to extend the tenure of their loans by up to the corresponding principal deferment period if they wish. This relief will be available to SMEs that continue to pay interest and are in good standing with their banks and finance companies (not more than 90 days past due as of 6 April 2020).

It is estimated that more than S$40 billion of existing loan facilities to SMEs will likely qualify for this opt-in relief measures scheme.

Besides secured term loans, banks and finance companies also stand ready to work with SME customers to adjust their loan repayment schedules for other types of loan facilities.

Lower Interest on SME Loans

Banks and finance companies may apply for low-cost funding through a new MAS SGD Facility for loans granted under Enterprise Singapore’s SME Working Capital Loan scheme and Temporary Bridging Loan Programme . Banks and finance companies can apply for these funds until end December 2020, provided they commit to pass on the savings in funding cost to their SME borrowers. This initiative will potentially lower the interest rates charged to eligible SME borrowers.  Details will be provided at a later date.

Assistance with Insurance Premium Payment

Corporates, including SMEs, holding general insurance policies that protect their business and property risks may apply to their insurer for instalment payment plans. General insurance companies stand ready to work with their corporate customers so they can pay their premiums in smaller amounts and enjoy coverage for the paid-up period, instead of paying a lump sum premium for the entire policy period at the start.

Ensuring Liquid and Well Functioning Funding Markets

MAS is providing sufficient liquidity to Singapore Dollar (SGD) and US Dollar (USD) funding markets in Singapore and supporting their effective functioning.  This will enable financial institutions to fund themselves, intermediate credit to individuals and businesses, and provide essential financial services. Banks should avail themselves of the liquidity facilities provided by MAS to bolster their ability to meet the SGD and USD funding needs of their customers.

MAS has been providing ample SGD liquidity to the banking system through its daily money market operations (MMO).  MAS has also significantly stepped up its provision of USD liquidity to the banking system, increasing the volume of foreign exchange swaps transacted at its daily MMO by about 25% over the past two weeks.

MAS established on 26 March 2020, a new MAS USD Facility to provide up to US$60 billion of funding to support stable USD liquidity conditions. The USD funds are obtained through a swap facility between the MAS and the US Federal Reserve, which will enable Singapore to play its role in supporting USD funding markets in the region.

Financial Sector Committed to Support the Economy

Mr Ravi Menon, MAS Managing Director said, “It is heartening to see our banks, insurers, and finance companies coming together to support their customers through this difficult time. Our financial institutions are able to do this because of their strong starting position.  They have deep capital buffers, ample liquidity, and low leverage. They are well-placed to not only ride out the economic storm caused by COVID-19, but also provide meaningful relief to  individuals and SMEs affected by the crisis.  The package of measures they have put together speaks of a financial industry in Singapore that is robust, responsible, and purposeful. These measures will complement the government’s broader fiscal initiatives and help the Singapore economy recover more quickly and emerge stronger when the pandemic passes – as it surely must.”

Mr Samuel Tsien, Chairman, the Association of Banks in Singapore said, “The shock to the economy from the COVID-19 outbreak is unprecedented. We must take extraordinary measures to address not just a health crisis, but what has developed to become a deep global economic crisis. As banks, it is our social responsibility to do our best to help our affected customers ride through these difficult times and help them recover as soon as possible. Banks have already introduced targeted financial relief programmes on an individual basis for their impacted customers, but we are now doing more as an industry. We are fully behind the measures announced today by MAS. The measures are broad-based and standardised, to provide prompt and direct relief to affected individuals and businesses, particularly SMEs. ABS and the banks in Singapore will work closely with MAS to ensure the continued health of our banking system and the well-being of our economy.”

Mr Lee Sze Leong, Chairman, Finance Houses Association of Singapore said, “Finance companies are fully supportive of the proactive measures announced by MAS to assist our customers, both individuals and businesses, to alleviate the financial burden as a result of COVID-19. We understand the difficulties of our customers during this challenging period and are committed to rendering support. We stand united with the industry in rolling out these measures and are determined to ride out this crisis together.”

Mr Khor Hock Seng, President, Life Insurance Association Singapore said, “The life insurance industry joins nationwide efforts to help people in Singapore get through these challenging times. In addition to the usual options available to keep individual policies going, we are giving customers who need help more time to pay premiums that are due to ensure that their insurance protection remains uninterrupted during this difficult period.”

Mr Craig Ellis, President, General Insurance Association said, “The general insurance sector is committed to ensure that our customers’ protection needs continue to be met at all times. Particularly during these challenging times we recognise the important role we play in supporting customers with their financial difficulties. As in the past, we will get through this together as an industry and a nation.”

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Loan defaults should be avoided as much as possible

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Author: Ravi Philemon

Loan defaults can send you into a downward spiral so fast that you won’t know what hit you

by: Hitesh Khan/

Personal loans are a way to use tomorrow’s income today, and unlike other loan products like mortgage loans or education loans, the process involved to apply for best personal loans is relatively simple.

But you must note that the interest rates are much higher than, say, for a car loan. This is because personal loans are unsecured loans, which means that the personal loan is not backed by any asset. The loan amount and interest rate depend on different parameters such as your income, credit history, repayment capacity, and others.

As even the best personal loans come with high interest rates, continuous loans defaults will put you on a downward spiral.

Here are some of the lowest personal loan interest rates offered by various banks:

Personal loans are basically unsecured loans which typically from $1,000 – $100,000 with fixed or variable interest rates that can be used to make a large purchase or to consolidate debt. Borrowers can use personal loans for credit card debt consolidation, business expansions, home improvements, medical bills and other major life expenses. Once recent study showed that personal loans are now the fastest growing consumer debt.

loan defaults

image credit: InvestmentZen

The best personal loans typically have a set term of three to five years and generally charge a fixed interest rate.

One report showed that millennials are driving the growth of the personal loan market. The report added that this category of people are rapidly coming into their earnings and credit wheelhouse – and because it takes time to become creditworthy, a higher proportion of millennials end up taking personal loans.

Even the best personal loans can get you into trouble if you get into loan defaults. Loan defaults or loan delinquency is your failure to make loan repayments when they are due. Extended delinquency can result in loan defaults. It is the failure to repay the loan as per the terms agreed between you and credit institution.

With loan defaults, the interests owed on your personal loans snowballs, drastically reducing your credit score and impacting your ability to receive future credit for lives other needs like the best home loans. Besides your personal properties being seized for default, the lending agency will also send a debt collection agency after you. The debt collection agency will try to contact you to repay, and this may include them trying to reach you at your place of work, or at home in full view of all your neighbours.

So, the rule of the thumb is, if you think you are going to loan defaults, contact your lender to discuss restructuring your best personal loans.

It is better to contact you lender to restructure rather than face the dire consequences of defaulting on a loan, which includes:

  • Employment difficulties,
  • Having money from seized from your accounts,
  • Legal proceedings, and
  • No access to crucial loans.

If the debt collection agency is not able to collect the delinquent loan, sooner or later it will reach a lawyer’s desk, and a collection attorney may take you to court after issuing a final letter calling upon you to pay your debt. If the debt is deemed valid, the court can issue a judgment against you, ordering you to pay it — and legal fees. Once you go to court, your default becomes a matter of public record.

A court judgment may allow a creditor to put a lien on your property, which means that if you ever sell it you’ll be forced to cover over some or all of that debt. A lender or collector can also ask a judge for an execution order.

Fortunately, you lender can’t go to the police to recover the personal loan extended to you. Personal loan cases are treated as civil cases instead of criminal cases, so the police will take a hands-off approach. But be mindful that if the amount owed to all of your creditors (including credit cards and car loans) is at least $10,000, you can be made bankrupt in Singapore.

The problem however isn’t just being declared bankrupt. The Official Assignee can seize your belongings which in Singapore can include, property, tools of your trade, property held in trust for someone else, and even clothing and furniture.

In fact, if you even try to take vacation, you will need the OA’s permission or you can be fined up to $10,000 and/or jailed for up to 2 years.

If you think you are going into loan defaults, it is good to speak to a loan consultant if there are constrains with restricted funds in growing the business. Loan consultants have very wide network with financial institutions and are very often more mindful of the different financial instruments which are available in the market out there. They can guide the businesses to the product which is the best fit for them.

Mr Paul Ho, chief mortgage consultant at iCompareLoan, said: “Most importantly, remember that you need to borrow when you don’t need the money, because when you really need it, no one will probably lend you any.” He added, “the Covid-19 crisis is a very tough time for many businesses and those having to serve loans. Of course the Budget and the Stimulus Package is giving some money for struggling businesses, but we must all be innovative and seize any opportunity to survive.”

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Mortgage calculators are a useful tool to estimate payments

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Author: Ravi Philemon

Most people utilise mortgage calculators to estimate the payment on a new mortgage, but it can be used for other purposes, too. Here are some alternative uses for Mortgage calculators.

By: Hitesh Khan/

1. Utilise mortgage calculators when you are planning to pay off your mortgage early

By the time a 25-year fixed-rate mortgage is paid off, the typical mortgage holder will have made total interest payments significantly larger than the original principal on the loan. Some mortgage calculators have “Extra payments” functionality which helps you to find out how you can shorten your term and net big savings by paying extra money toward your loan’s principal each month, every year or even just one time.

Interest Rate Sensitivity Calculator‘ for example, helps you to compare the Principal against Yearly Interest Rates and Term of Loan.

utilise mortgage calculators2. Utilise mortgage calculators to decide if an ARM is worth the risk

The lower initial interest rate of an adjustable-rate mortgage, or ARM, can be tempting. But while an ARM may be appropriate for some borrowers, others may find that the lower initial interest rate won’t cut their monthly payments as much as they think.

There is also a significant difference between a fixed-rate mortgage and an adjustable rate mortgage. The former allows a borrower to “lock in” a permanent rate, whereas the interest rate on the latter could go up in the future. Always remember to check with your current lender about repricing — your existing relationship could allow you to realize big savings in terms of both time and money.

Housing Payment Calculator for example, allows you to compare the Loan Amount against Yearly Loan Interest Rate, Term of Loan year(s), Annual Property Tax, and Annual Property Insurance.

Worst home loan: How to Find one

3. Utilise mortgage calculators to find out how much Additional Buyer Stamp Duty (ABSD) you would have to pay

The property curbs introduced by the Government in July last year saw the Additional Buyer Stamp Duty (ABSD) rates for Singapore Citizens and Singapore Permanent Residents (SPR) purchasing their second and subsequent residential property were raised by 5 per cent for all individuals and 10 per cent for entities. The Loan-To-Value (LTV) limits were also tightened by 5 per cent for all housing loans granted by financial institutions.

Additional Buyer Stamp Duty (ABSD) Calculator for example, shows you how much of this tax you have to pay based on your nationality, currently owned properties and property price.

Remember — All Mortgages Are Not Created Equal

Don’t make the mistake of choosing a mortgage based only on its stated annual percentage rate (APR), because there are a variety of other important variables to consider, such as:

The term of the mortgage — This describes the amount of time it will take you to pay off the loan’s principal and interest. Although short-term mortgages typically offer lower interest rates than long-term mortgages, they usually involve higher monthly payments. On the other hand, they can result in significantly reduced interest costs over time.

The variability of the interest rate — There are two basic types of mortgages: those with “fixed” (i.e., unchanging) interest rates and those with variable rates, which can change after a predetermined amount of time has passed, such as one year or five years. While an adjustable-rate mortgage (ARM) usually offers a lower introductory rate than a fixed-rate mortgage with a comparable term, the ARM’s rate could jump in the future if interest rates rise. If you plan to stay in your home for a long time, it may make sense to opt for the predictability and security of a fixed rate, whereas an ARM might make sense if you plan to sell before its rate is allowed to go up. Also keep in mind that interest rates have hovered near historical lows in recent years and are more likely to increase than decrease over time.

Mortgage Broker Singapore – Should I use one?

Finally, before making that home loan decision, keep in mind that your current lender may make it easier and cheaper to reprice than another lender who would require you to refinance. That’s because your current lender is likely to have all of your important financial information on hand already, which reduces the time and resources necessary to process your application.

But don’t let that be your only consideration. To make a well-informed, confident decision you’ll need to shop around, crunch the numbers, and ask plenty of questions. And to crunch numbers effectively, you would need to utilise mortgage calculators.

If you were thinking of buying a home, whether it is your first or fifth time, loan calculating tools are one of the most important tools you need to have at hand. A good mortgage calculator will not only help you to calculate the mortgage loan amounts, but also the interest rates offered by each lender according to the length of the loan term.

Utilise mortgage calculators to help you to compute how much and how frequently your repayments will be on monthly, annually and throughout the full duration of your loan period. It can also help compute changes in rates and payments in case your fixed rate changes during your mortgage period.

A loan calculator will allow you to always keep an eye on your money from the very start of the home buying process.
Loan calculating tools will equip you to walk into a mortgage with accurate information, affording you peace of mind as you will know exactly how much you can afford to spend each month. This will also help you to better budget other household bills, such as groceries, credit card expenses, taxes and the like.

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Loan calculating tools are essential for new home buyers

Click on Loan calculating tools are essential for new home buyers
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Author: Ravi Philemon

If you were thinking of buying a home, whether it is your first or fifth time, loan calculating tools are one of the most important tools you need to have at hand.

By: Hitesh Khan/

A good mortgage calculator will not only help you to calculate the mortgage loan amounts, but also the interest rates offered by each lender according to the length of the loan term.

As such, any mortgage broker who does not have a mortgage calculator as the primary tool in his ‘toolbox’ to help buyers is a useless one. Besides being an asset to your mortgage broker, since it will allow your broker to provide you with the most accurate information, a mortgage calculator has other significant benefits that will directly impact you, the property buyer.

loan calculating tools

Image Credits: Mortgage Calculator, Paul Ho, iCompareLoan.com

A good mortgage calculator would help you to compute how much and how frequently your repayments will be on monthly, annually and throughout the full duration of your loan period. It can also help compute changes in rates and payments in case your fixed rate changes during your mortgage period.

A loan calculator will allow you to always keep an eye on your money from the very start of the home buying process.

Loan calculating tools will equip you to walk into a mortgage with accurate information, affording you peace of mind as you will know exactly how much you can afford to spend each month. This will also help you to better budget other household bills, such as groceries, credit card expenses, taxes and the like.

A mortgage calculator’s ability to compare lenders rates is another added advantage as it means that you always have a price comparison tool at hand, where you can quickly compare various mortgage products at the touch of your fingertips, from the comfort of your home. This will enable you to easily calculate which lender best suits your needs and quickly compute how much you can save monthly and annually between various loan products.

The difference between various loan products may seem minute when you only see the percentage difference but loan calculating tools will help you clearly see how even a 0.15 per cent difference between loan products can save you thousands of dollars.

Take for example a mortgage of $500,000 from one lender over a period of 25 years, with an interest rate of 2 per cent. This will amount to a $2,119.27 repayment each month. In just a few easy steps, loan calculating tools help you find another, more affordable product, such as a mortgage with the same terms with a slightly lower interest rate of 1.85 per cent. This would constitute a monthly repayment of  $2,082.95.

Although a saving of $36.32 per month may seem small to some, this saving translates to a sizable $435.84 per year and a savings of $10,896 throughout the entire 25-year mortgage period. A few simple clicks on the mortgage calculator has now enabled the buyer to save thousands of their precious money – money that could go towards major life expenses or even a well-deserved vacation!

Besides this, some mortgage calculators can help increased insight as they could provide you, the property buyer, with the ability to calculate the differences between principle and interest only mortgages and repayment numbers. With the help of such features, you can rest easier, only bearing in mind that there will be a final balance to pay at the end of your term if you opt for principle and interest only payments.

Worst home loan: How to Find one

What loan calculating tools lack is the human touch. The loan calculator will not be able to tell you which will be the best home loan for you. It will not be able to tell you when you need to refinance your mortgage, the terms of change when you refinance, or if you choose to switch lenders midway as your loan term progresses.

This is where a mortgage broker will be vital in helping you navigate changes to your loan and mortgage. A mortgage broker will take the information the mortgage calculator has provided you to offer multiple mortgage options that are uniquely suited to you and your needs. A good mortgage broker will also take time out to explain what each of these options mean for you.

It can be overwhelming for a layperson to try to make sense of the housing market, given that it is chock full of technical terms and jargon. Even with the help of a mortgage calculator most home buyers will not only know the industry and the products within the industry well. A mortgage broker however will be able to explain these nuances to you in an accurate way that is easy to understand.

Since the beginning of this year, banks have raised interest rates for both fixed and floating home loan packages by 10 – 30 basis points (bps). Some banks have already upped their mortgage rate to 2.05 per cent, to keep pace with the increasing interest rates.

There are good reasons why homeowners are unsure and unfamiliar on how to get the best home loans. The simplest one being most don’t buy homes as often as they buy other necessities (like food and clothes). But actually, there is no reason why you should contribute to the banks’ profits when with a simple tool like the mortgage calculator, you can keep the difference in interest rates.

After reading this article, if you are persuaded into trying out a loan calculator, you can try the range of useful ones which are available online.

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Cash shortage – how to deal with it without panicking

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Author: Ravi Philemon

Have you just been blindsided by an unexpected cash shortage and don’t know what to do? Whether it’s a job loss, medical expenses, or an emergency home repair, an unexpected change in your financial situation can be incredibly stressful. The bills still need to be paid, the utilities need to stay on, and you need to put food on the table, so how should you cope with a cash shortage?

By: Phoenix Lee/

cash shortage

Image credit: aenri05/Flickr

Evaluate the Cash Shortage

Take a moment to sit down and carefully evaluate your cash shortage. Running around in a panic won’t solve anything and only lead to additional stress. Understandably, you probably have a million things running through your head and being cool and collected is the last thing on your mind, but the ability to carefully evaluate your situation will ensure you make the right choices.

First, determine what caused this cash shortage. Before you can look at ways to resolve the situation, you need to understand the cause. Is it a sudden loss of income? Mounting expenses that you can’t keep up with? While each situation can lead to similar burdens, your plan of attack will likely need to address the root of the problem to be effective in the long run.

Prioritise Expenses
Not all expenses are created equal. There are certain bills that need to be paid before others. Some of the most important items to put at the top of your list should be food and shelter. Is it worth risking foreclosure to keep your cable bill current? Obviously not, so carefully examine all of your expenses and determine which are the most important. It isn’t worth paying something that will put you in jeopardy of being unable to pay for a necessity.

Once you’ve established which bills are the most important, you can begin looking for expenses to cut out of your budget. While it might not be much fun to cut out some of the things you’re used to, it might be what’s necessary to keep you from slipping into an even deeper financial hole.

Look for ways to cut back or eliminate things completely. For example, if you regularly go out to eat, consider cutting back or eating at home entirely. It doesn’t take much. If you were to only find five different ways to save $20 each month, you’ve instantly freed up $100 that can go towards your important and necessary expenses.

Negotiate With Lenders
If you’re having trouble with credit cards, medical bills, or even your mortgage, the first thing you should do is call your lender. Believe it or not, it’s in their best interest to help you make your payments, even if it means a lower interest rate or extending the terms. People so often wait until they already get severely delinquent before contacting their lenders, and by then they aren’t as willing to work with you. If you know that money is getting tight and you might need help, call them before you get behind.

Calling your credit card company can result in a lower interest rate, and in some cases may even lead to a temporary delay in making payments. Reaching out to your mortgage company can lead to a restructuring of your loan. And even when it comes to your utilities like electricity and gas, they usually offer programs to help keep the lights on and make payments affordable if you’re experiencing a hardship. Don’t wait for the threatening letters to start coming in the mail before taking action.

When facing cash shortage, Find Extra Money
Ideally, you want to have some money set aside in an emergency fund to help pay for any unexpected expenses, but this isn’t always possible. Where do you turn when you’ve exhausted your savings account?

You can always try to get a loan or use credit cards, but these may only make the problem worse. While borrowing money can provide quick access to cash, it can also come with high interest rates and a new monthly payment. If you’re experiencing a financial hardship for an extended period of time, you may find yourself in a downward spiral that is nearly impossible to recover from.

Another option could be to check with friends and family. Nobody likes to ask for money, but a little bit of help from a loved one might be all that you need to get through the rough patch. Of course, this can also put a strain on some relationships, so proceed with caution.

And finally, you may have some money available via investments or in retirement accounts. Generally speaking, withdrawing money from your retirement accounts is a bad idea as it can put your retirement security in jeopardy, but it could also be enough to keep you from going into even further financial trouble.

Take Advantage of Available Assistance
When it comes to a financial hardship, there may be assistance out there for you. From Comcare Childcare Subsidies to the various Financial Assistance Schemes, there are several Government run programmes to assist you. It is best to approach your nearest social service centres if you need help.

Planning for the Next Cash Shortage
If you’ve made it through difficult times in the past and want to minimise the impact in the future, there are a few things you can do to prepare. Start with an emergency fund. This is exactly why they are called emergency funds. A good rule of thumb is to have a few months worth of expenses set aside in the bank to help pay for unexpected expenses or pay the bills if you lose your job. Obviously, the more you have saved, the better off you’ll be. But even a month or two worth of expenses saved up can buy you some time while you get things back on track.

You also want to consider insurance. Most forms of insurance are a safety net to cover expenses. Having a plan in place before a financial crisis strikes will take a lot of weight off of your shoulders. Knowing what expenses you have and how you’ll pay for them will make a stressful situation that much easier to cope with.

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Expatriate loans – how do you deal with them when you need to go?

Click on Expatriate loans – how do you deal with them when you need to go?
for the source.
Author: Ravi Philemon

Singapore a very popular work destination for foreign talent, and considering that 38 per cent of the population in Singapore are foreigners, it is little wonder if some of them are searching for expatriate loans.

By: Hitesh Khan/

A relatively high standard of living coupled with a vibrant economy, provided by political stability and a favorable investment environment are all factors which have contributed to more expats arriving and settling in the country. Like Singapore residents, expats too experience financial constraints from time to time.

expatriate loans

image credit: YouTube

Most local banks in Singapore offer foreigners expatriate loans, but only after being with the same bank for several years and in good standing.

Even then, the banks may give you lesser than the advertised credit line of 4-times your monthly salary.

Most foreigners don’t leave Singapore after comparing the quality of life on the island with their home country. But what happens when you have to leave the country for one reason or another?

Can you leave Singapore without paying your expatriate loans and never set foot on the island again? If you do that, you face the prospect of being made a bankrupt in Singapore. Being made a bankrupt in Singapore, is different than being made a  bankrupt in the U.S.

For example, in Singapore, you can be “made” bankrupt by a creditor, while in the U.S., although it seems like you are being forced into bankruptcy, you still have to make the decision to file for bankruptcy.

Best Personal Loans in Singapore (2018)

And you can be made a bankrupt if you owe your lender just $10,000 in expatriate loans.

The problem however isn’t just being declared bankrupt. With bankruptcy, the Official Assignee (OA) has almost complete control over your life. The OA can seize your belongings which can include, property, tools of your trade, property held in trust for someone else, and even clothing and furniture.

In fact, the any property can be seized, including future property that the bankrupt person may come into possession in the future. You will need the OA’s permission even to go on a holiday, and if you don’t comply, you may be fined up to $10,000 and/or be jailed for up to 2 years. With bankruptcy, you also risk losing your job and it will certainly make things difficult if you are trying to find a job.

This means that if you leave Singapore without paying off your expatriate loans, the road will not be smooth sailing if you want to come back to live in the island again.

One foreigner explains her problem in an online expat forum:

“Have not been living or working in Singapore now over 5 years but held on to credit cards…total probably 30k. Now the banks decided since i no longer live or work in Singapore, they want full payment which I cannot do. They are threatening to take legal action, so far do not know if it has been done. So if they did a court case and I am not there to represent myself, they can win the case in my absence? My concern is I may have a job offer in Singapore and this will affect if I can get a work permit. Also if I managed to get a work permit, it looks like most of the salary will go into paying off the debts.”

Another forumer responding to the query said:

“That is quite a large amount of debt and that does not include interest accrue on top of the original debt. If the banks in Singapore has already located your overseas address, rest assured they will come after you by getting a court order at your resident country. Once the court accepts the claims of the lawyer representing Singapore Banks, you are done for. I have seen it happened time and time again.
“Immigration & Checkpoints Authority (ICA) only deals with the immigration part. Ministry of Manpower deals with the employment part but if a court judgement has been ruled against you, finding a job will be hard and you cannot get any credit card nor banks wanting to do anything with you. fF I am not wrong it will be sent to the police database too. To enter Singapore as a visitor personally I do not see an issue as you are a foreigner, not local nor Permanent Residents but I could be wrong here.”

It is not altogether clear what may actually happen to you upon entering and leaving the country if you have bad debt you have left behind. But even if you don’t care about being declared bankrupt and are not planning on ever returning to Singapore, you may have to consider your guarantors – especially if they are family or close friends who are still in Singapore as they will be held responsible for your debt.

How to Secure a Expatriate Loans Quickly

Are you a foreigner and searching for expatriate loans? If you are, you should speak to loan specialists can set you up on a path that can get you the best personal loans in a quick and seamless manner. They can also can arrange  for the Best Home Loans in Singapore as they have close links with the best lenders in town and can help you compare Singapore home loans and settle for a package that best suits your home purchase needs.

Whether you are looking for a new home loan or to refinance, loan consultants can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the loan. And the good thing is that all their services are free of charge. So it’s all worth it to secure a loan through them.

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