Personal Finance

How To Pay Your Housing Loan In Singapore

January 6, 2023

The process of owning a HDB flat in Singapore is not that complicated. After paying for your Option To Purchase (OTP) in cash, you can pay the rest using a combination of cash, CPF, or a loan.

A housing loan is good because it keeps you from boring further into your savings or income. That said, repaying it can get tricky, especially if you exhausted your finances at the initial cash outlay or lack a concrete debt repayment plan.

This article discusses how to pay housing loan in Singapore quickly and easily by examining the payment options available to Singaporeans.

In particular, we seek to answer two of the most-asked questions in Singapore: “Should I pay off my HDB loan using CPF?” and “How to pay back CPF housing loan”.

Read on to find out how to pay housing loan using your CPF.

How To Use Your CPF OA To Pay For Your Housing Loan

You can use the savings in your CPF Ordinary Account (OA) to pay for some property-related costs, including a downpayment, home construction costs, purchase of a HDB or private residential property, or legal fees and stamp duty.

You can use a CPF housing usage calculator to determine how much of your savings you can allocate to your payments.

Next, authorise the payments towards your housing loan. The details to enter into the calculator include the property valuation price, the property purchase date, lease details, and your co-owner’s date of birth.

If you own a home already, get onto CPF’s Home Ownership dashboard first to see the amount available for use.

Depending on the money available, you can then find out how to pay housing loan using your CPF in one of the following ways:

1. Pay Your HDB Loan Or A HDB Unit Without Loan Financing

To use this option, fill out a CPF withdrawal form at a HDB branch office and wait for feedback.

2. To Pay A Bank Loan Or A Private Property Without Loan Financing

For this option, you must first find a lawyer and provide him or her with a Letter of Authorisation, Declaration, Consent, and Agreement.

This gives the lawyer the authority to submit the request on your behalf. The lawyer then makes the application, and when all legal documentation has been approved, your CPF money will be available to use.

Nevertheless, you must pay the 5% of your valuation or purchase price in cash, along with your downpayment, the option fees, and any other balance purchase price above the property value, termed the Cash Over Valuation (COV).

3. Pay Your Housing Loan Installments Using CPF

You could also use your CPF savings to pay the loan in monthly installments by making the request online if you:

Already have an outstanding HDB loan. Log in to your profile and make a request from the HDB website.
Are servicing a bank loan. Use the eService request to use CPF for your property loan.

How To Pay Housing Loan Installments

There are several means by which the money from your CPF OA can be used to make your monthly installment payments.

But before you make any payments, you must first have applied to use the partial capital repayment through your My HDBPage.

You should have received email confirmation that you can proceed with whichever mode you choose.

Choose from the following payment methods:

GIRO: This is especially suitable when you are already using it to make your monthly loan payments
CPF
eNETS Debit from participating banks
Cheque
AXS channels such as AXS e-Station, AXS m-Station, and AXS Station
PayNow via SGQR from participating banks

Use one or a combination of these to make your payments.

You do not need to do anything if you’re using GIRO or CPF because the bank or the CPF board processes your monthly deductions.

But for AXS channels, PayNow via SGQR or eNETS Debit, you must issue instructions for the payment to be made.

Payment Modes

Here’s a breakdown of the easiest payment methods and how to use them:

CPF

You must first own a flat to use your CPF savings to make your housing loan payments. You also need to be insured under CPF’s Home Protection Scheme.

Authorise the deductions from your CPF account for the monthly installments by making a CPF withdrawal application.

The deductions are made on the Sunday that falls between the 6th and 12th of every month.

GIRO

To use GIRO, present a completed Interbank GIRO application to HDB. You can get a pre-filled form from your HDB account if you own the flat. If you don’t own it, there’s a different application form to fill out.

If the bank approves your GIRO application, HDB will inform you of the GIRO commencement date.

Deductions are made from your GIRO bank account on the 28th of each month. So ensure that your GIRO bank account has enough funds to support the deductions, or penalties will be imposed for unsuccessful deductions.

HDB may also impose charges for late payments.

Internet Banking On The Bank’s Website

Banks such as DBS Bank or POSB Bank, United Overseas Bank, and OCBC Bank offer internet banking services that you can use to make your housing loan monthly installment payments.

eNETS Debit

You may use HDB’s e-Service called eNETS Debit to make the payments. But you can only use this option if you bank with United Overseas Bank, OCBC Bank, Citibank, DBS Bank or POSB Bank, and Standard Chartered Bank.

Cheque Or Cashier’s Order

Make your cheque or cashier’s order payable to HDB. On the other side of the cheque, write your HDB reference number, flat address, and the purpose of your payment (e.g. partial capital repayment).

Ensure that the HDB cashier’s order or cheque reaches the HDB branch that manages your HDB loan repayment before the set partial capital repayment date.

Partial Capital Repayment

You can pay your HDB loan in partial capital repayments using various payment methods.

But to do this, you must apply to HDB, and it will schedule a date for you to do so –usually, a month from the day they receive the request.

When it comes to making a partial capital repayment, you will have two options.

You can pay the partial amount and continue to pay your monthly installments, shortening your repayment period.

You can also choose to revise the monthly installment amount upwards or downwards.

The minimum amount you can deposit as partial capital repayment is $500 for loans that commenced before 1 Apr 2012, and $5,000 (with increments of $1,000) for loans that commenced on 1 Apr 2012 and after.

To make the partial capital repayment request, get on your HDB Page and click on “Other Related Services” and then on “Partial Capital Repayment”.

After you make your request, an email will be sent to acknowledge your successful submission to HDB, along with payment instructions.

Paying Off Your HDB Loan Early

If you wish to pay off your HDB housing loan early, apply to redeem the loan on your HDB Page. Click “Other Related Services” and “Redemption of Housing Loan”.

HDB will give you a redemption date a month after receiving the request, and all payments must be made on the selected date.

HDB computes what you owe in terms of the principal amount and all the fees payable for the loan discharge.

So in its acknowledgement of your application, you will also be informed of the amount due, along with other payment instructions.

Late Payment Charges

Your monthly installment payments are due every 1st of the month and failure to pay them within the month attracts a late payment charge.

The late payment charge rate is 7.5% per annum and is imposed on your outstanding installment by the end of the month.

If you make any payment after this, it will first be used to settle all the late payment charges, and then the balance will be directed toward the outstanding monthly installment.

If you’re using GIRO for your payments, ensure that your account has sufficient funds. As mentioned, the deductions are made on the 28th of each month.

If the first deduction is unsuccessful, a second attempt will be made on the 6th of the following month. If both attempts are unsuccessful, the bank and HDB may impose late charges.

Be Clear About How To Pay Housing Loan

If you’re wondering how to pay housing loan, contact Credit Thirty3 because we have a solution for you.

As a trusted licensed money lender in Singapore, we offer affordable low-interest housing loans to make your home ownership journey as easy as possible.

We have expert loan officers who will help you figure out how to pay housing loan using your CPF in the most stress-free way possible.