Among all the 10 rounds of cooling measures applied by Singapore government since 2009, this is the most powerful & effective “loan curb” measure. And how does it affect loan applicants?
TDSR (total debt servicing ratio) splits a person’s income into 2 parts: fixed monthly employment income, and others. Only fixed monthly employment income is recognized 100%, all the rest being variable are given 30% haircut, i.e. only 70% will be taken as stable income.
One obvious requirement of TDSR-era loan application is that, a lot of paper work has to be submitted to prove your monthly financial commitments shown in your credit bureau record. So mentally prepare yourself for a bit paper work if you plan to apply for a loan