Special Financial Relief Programme – Unsecured (Preferred Credit) FAQ

1. What is the SFRP (Unsecured)?

The SFRP (Unsecured) is part of the Special Financial Relief Package (SFRP) that the financial industry, in collaboration with MAS, has put forth to help individuals affected by the COVID-19 pandemic.

This initiative offered by banks and other card issuers aims to help borrowers who have suffered a temporary loss or decline in income and are facing difficulties meeting repayments under their existing unsecured credit facilities, by giving them an option to convert their high-interest unsecured credit card and revolving balances into a lower-cost term loan, thereby lowering their debt burden.

2. Am I eligible to apply for the SFRP (Unsecured)?

RHB customers may apply to convert existing unsecured outstanding balances in Preferred Credit facility to a lower-cost term loan if customers:

  • are a Singapore Citizen or Permanent Resident;
  • have lost 25% or more of your income after 1 February 2020 (proof of impact on income required);
  • are not more than 90 days past due on your existing Preferred Credit outstanding balance with the bank (as at application date); and
  • are not on any existing debt repayment or restructuring programmes (this refers to Debt Repayment Plan (DRP), Debt Management Programme (DMP), Debt Consolidation Plan (DCP) and Repayment Assistance Scheme (RAS)) with the bank or card issuer.

Please call us at 1800 323 0100 for more information on this option and the necessary documents to be submitted.

3. Should I apply to convert my outstanding unsecured debt into this term loan? What other options do I have?

The SFRP (Unsecured) is an option that is available to help individuals reduce their overall cost of outstanding unsecured debt. It is specifically introduced to help those who are affected by COVID-19 and face short-term cash constraints, and who are at risk of incurring substantial arrears.

Before taking up this term loan, you may wish to consider if there are other credit products (e.g. balance transfer, monthly interest-free instalment plans, Debt Consolidation Plan (DCP) etc.) that can help you lower your overall interest and debt repayment. However, whichever option that you choose, it is important to make sure that you are able to meet the monthly payments in full so as to avoid the accumulation of debt.

If you require assistance, please call us at 1800 323 0100 to enquire. You can also reach out to Credit Counselling Singapore, who can advise you on how to manage your debts and provide you more information on the Debt Management Programme (DMP).

4. How will this help me with my debt burden?

If you are facing difficulties repaying your monthly unsecured credit debts in full as your income is affected due to the COVID-19 pandemic, the SFRP (Unsecured) will help you avoid the snowballing of interest and accumulation of debt that results from the rolling over of your outstanding balances.

5 years illustration on minimum monthly repayment of 3%
Total outstanding unsecured balances$30,000Total interest payable$14,301
EIR15.88%Total Principal + Interest$33,441
Number of years5Monthly repayment $900 to $300
as outstanding balance reduces
Outstanding Balance$10,273

5 years illustration on Term Loan at 8% effective interest rate
Total outstanding unsecured balances$30,000Total interest payable$6,498
EIR8%Total Principal + Interest$36,498
Number of years5Monthly repayment $608 fixed
Outstanding Balance$0

While the interest rate (capped at effective interest rate of 8%) is lower than what you would have ordinarily paid under your existing loan, it is nonetheless still a loan. Therefore, you should pay down your unsecured credit outstanding balances as quickly as possible. The longer the tenor of the loan, the more interest you would need to pay.

5. I am affected by a temporary pay cut, but I still have sufficient income and savings to pay my debts. Should I apply to convert my existing debts nonetheless?

As a general principle, you should pay off your debt as quickly as possible so that you can avoid unnecessary interest payments.

While the effective interest rate of the term loan under the SFRP (Unsecured) is capped at 8%, there is still interest cost involved. Hence, you should consider and assess which is the most suitable and/or most cost-effective option (see question 3).

6. When can I start applying for the SFRP (Unsecured)?

The application period is from 6 April 2020 to 31 December 2020. You can apply at any time within the application period if you meet the eligibility criteria (see Question 1).

You may contact us at 1800 323 0100 to find out more on the application process.

7. Does the measures include ALL types of unsecured loans?

This is only applicable for Preferred Credit (Overdraft). If you are facing difficulties repaying your Renovation/ Furnishing/ Education/ Study Loan, please contact us at 1800 323 0100 to discuss suitable repayment plans or debt restructuring.

8. How long does it take for a SFRP (Unsecured) application to be approved?

The actual approval process will differ from financial institution to financial institution, depending on various factors including the volume of applications received. Nevertheless, financial institutions should generally approve your application expeditiously as long as you meet the eligibility criteria and provide the necessary documents.

9. Will my access to other credit facilities be affected if I take up the SFRP (Unsecured)?

If you take up the SFRP (Unsecured), you will no longer be able to draw down on your existing Preferred Credit’s available credit limit. However, your credit facilities with other lenders will not be affected.

Please note that prevailing rules for unsecured consumer credit, including the industry-wide borrowing limit of 12 times monthly income, will continue to apply.

10. How can I regain access to new unsecured credit?

You will be able to apply for new unsecured credit facilities once you have fully repaid your term loan. Upon your application, we will conduct income and credit bureau checks to reassess your creditworthiness per its usual process. Please note that the Credit Limit Management Measure will apply.

11. Is this a restructured loan product? How will it be reflected in my credit bureau report?

The converted term loan will not be reflected as a restructured loan product in your credit bureau report.

12. What should I do if I am subsequently unable to make repayments of my term loan?

If you face further difficulty with your repayments under the term loan, you should call us at 1800 323 0100 immediately to explore possible options.

13. Do I have flexibility to decide on the repayment terms, such as amount of monthly instalment and tenor of the term loan?

Under SFRP (Unsecured), you may be offered term loans of up to 5 years, to accord you greater flexibility in accordance with your repayment ability. You may wish to call us at 1800 323 0100 for further details.

If you are facing cash flow issues, you may wish to explore lower monthly instalments over a longer loan tenure. However, the total interest payable over a longer tenure loan will be more than that for a shorter tenure loan.

14. Can I repay the full term loan before the end of its tenure?

Yes, you may fully repay your term loan at any time before the end of the loan tenure. There is no early repayment penalty.

15. Can I revise the tenure of the term loan if my financial situation changes in the future?

You may wish to call us at 1800 323 0100 to request to vary terms of the term loan. We will generally assess such requests on a case-by-case basis and provide you with the available options.

16. Can I convert my outstanding unsecured revolving credit balances into term loan under the SFRP (Unsecured) more than once?

Upon conversion of your outstanding unsecured revolving credit balances into term loan, you will not be able to draw down on your existing unsecured credit limit or obtain new unsecured credit facilities from the lender that has granted you the term loan. It therefore follows that the conversion can only be done once with any single lender.

17. I have recently drawn down on my Preferred Credit facility. Can these amounts be included under the SFRP (Unsecured)?

Yes, you may convert all your Preferred Credit facility balances that are outstanding as at the date of application.

18. Where can I find information on the various relief measures offered by banks and card issuers?

You can call us at 1800 323 0100 for more details and on the necessary documents to be submitted.

19. I have been prompt in making minimum repayments of my unsecured credit debts. How do I avail myself to the SFRP (Unsecured)?

You may wish to call us at 1800 323 0100 to discuss your application for the SFRP (Unsecured) and other products that could meet your credit needs.

20. I am not a Singaporean or Permanent Resident. Can I apply for the SFRP (Unsecured)?

The SFRP (Unsecured) is a special relief that banks and card issuers have introduced to help Singapore citizens and permanent residents who are facing cash flow difficulties due to the COVID-19 fall out. Non-citizens and non-residents may call us at 1800 323 0100 to find out about the options available to them.

21. How can I make sure that I do not fall victim to scammers who solicit or offer me a term loan?

You should only contact us at 1800 323 0100. We will not ask for your account details, password, or OTP. You should verify any unsolicited calls, messages, or emails directly with us through the official channels.


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