Media Releases
Published Date: 06 April 2015

MAS Will Phase In Borrowing Limit on Unsecured Credit

Singapore, 6 April 2015… The Monetary Authority of Singapore (MAS) will phase in the borrowing limit on unsecured credit facilities over four years to give affected borrowers more time to gradually reduce their debts.

2    MAS announced in September 2013 that it planned to prohibit financial institutions (FIs) from granting further unsecured credit to a borrower whose outstanding unsecured debt1 across all FIs exceeds 12 times his monthly income for three consecutive months. The rule aims to help individuals avoid accumulating excessive debt. 

3    Following further consultations with the Association of Banks in Singapore (ABS) and Credit Counselling Singapore (CCS), and feedback from the public, we have decided to give over-extended borrowers more time to adjust to the new measure.

4    MAS will therefore phase in the borrowing limit over four years:
    •    24 times monthly income from 1 June 2015;
    •    18 times monthly income from 1 June 2017; and
    •    12 times monthly income from 1 June 2019.

FIs will not be allowed to grant further unsecured credit to an individual whose unsecured borrowings exceed the prevailing borrowing limit for three consecutive months.

5    The vast majority of unsecured borrowers in Singapore borrow within prudent limits. However, a small proportion of borrowers has accumulated significant unsecured debts. Based on data from FIs and Credit Bureau Singapore as of end February 2015, 32,000 borrowers will be affected by the borrowing limit on 1 June 2015. They make up 2% of the total unsecured credit users. Their borrowings pose no risk to the banking industry. The FIs’ aggregate non-performing loan ratio is low, at 1.1% as of end December 2014.
6    To help these borrowers, CCS, in conjunction with ABS, will introduce a new debt repayment solution known as the Repayment Assistance Scheme (RAS). ABS will announce details of this industry-led initiative later today.

7    Mr Wong Nai Seng, Assistant Managing Director (Policy, Risk & Surveillance), said, “All of us have to take active steps to manage our unsecured debts so that they do not become unsustainable. Most borrowers do not spend or borrow beyond their means, but some may need help to reduce their debts gradually. If you need help, we encourage you to act early and approach your FIs or CCS for assistance.”

Note: For more information on the borrowing limit, please refer to MAS’ FAQs on the revised credit card and unsecured credit rules (FAQs 25-32). The FAQs can be accessed at: .

1 The borrowing limit limit applies only to interest bearing balances incurred on unsecured credit facilities such as credit cards and unsecured personal loans. This includes amounts rolled over on credit cards and balances outstanding on unsecured loans that accrue interest.

Note to Editor

MAS has also put in place two other measures:
    •    For a transition period, FIs will have the flexibility not to suspend credit for borrowers whose outstanding unsecured debt already exceeds 12 times their monthly income before 1 June 2015. Each application will, however, be assessed on an exceptional and case-by-case basis, subject to the FI’s credit assessment. The grace period is up to end May 2019.  

    •    Loans for medical, education or business purposes do not count towards the borrowing limit and need not be suspended when the borrowing limit has been exceeded.