Personal Credit

Limits on granting more unsecured credit to borrowers with unsecured debt


  • Borrowers whose credit card or unsecured facility debt is 60 days past due cannot be granted further unsecured credit, nor can their credit limit be increased.

    Borrowers with unsecured debt exceeding 6 times their monthly income cannot be granted further unsecured credit or have their credit limit increased if it causes their total credit limit to exceed 12 times their monthly income.

    According to MAS (Explainers)
    last revised on 30 May 2017

    If a borrower’s debt on a credit card or unsecured credit facility is 60 days past due:

    • Financial institutions (FIs) cannot grant further unsecured credit to that borrower.
    • Other FIs cannot increase that borrower’s credit limits, or issue them new credit cards or unsecured credit facilities.

    Note: The other FIs are not required to suspend the borrower’s existing credit lines if repayment is not 60 days past due.

    A debt on a credit card or unsecured credit facility is considered past due if:

    • The minimum payment is not received by the specified due date (for credit cards and revolving unsecured credit).
    • Any instalment amount due is not paid by its due date (for non-revolving unsecured credit such as term loans).

    FIs should determine this based on their own records, or through checks with the credit bureaus.

     

    According to MAS (Explainers),

    last revised on 30 May 2017

    [I]f a borrower has accumulated outstanding unsecured debt (i.e. unpaid, interest-bearing balances) exceeding 6 times their monthly income, a financial institution (FI) will not be allowed to grant them any increase in credit limit or any new unsecured credit facilities that will cause their total credit limit to exceed 12 times their monthly income.

    Affected borrowers can continue to draw on their existing credit facilities and will not be required to reduce their existing credit limits.

    What Counts as Unsecured Debt

    This measure applies to interest-bearing balances of unsecured credit facilities such as credit cards, personal loans and overdrafts.

    It does not apply to:

    • Secured credit facilities such as housing loans and motor vehicle loans.
    • Loans for medical, education or business purposes.