Advisory
Do you want to try the ever-popular Debt Consolidation Plan in Singapore?
Singaporeans opt for a financial institution that provides the best debt management program. Banks often boast about how it helps borrowers recuperate from the devastating debt pile-up. Their services range from flexible loan tenure to a free credit card.
A Debt Consolidation Plan Singapore DCP does sound appealing. However, you might add more debts to your account if you don’t understand the terms and conditions governing how it works properly. That’s why it is a must that you learn the loops before applying for one.
Debt consolidation is an innovative way to handle all your existing debts into one loan. If you have many dues from your latest credit cards or personal loans, you can combine them into a single loan with one bank. It helps simplify your payments because you only have to pay one bank monthly instead of many.
Not all loans are acceptable in a debt refinancing program, which offers to consolidate your outstanding balances. Joint account loans, home renovation loans, student loans, business loans, and other unsecured loans are excluded.
If your DCP application gets approved, your existing unsecured credit facilities with other banks will be closed or suspended. The bank that approves your DCP will give you a revolving credit facility on your monthly income that is fixed at once. It helps you manage payments for everyday needs more efficiently.
A Debt Consolidation Plan is handy if you struggle to keep up with multiple payments. However, knowing the limitations of the kinds of debts you can consolidate is essential.
Meet the following eligibility criteria for the Debt Consolidation Plan Singapore application:
The Debt Consolidation Plan is a product regulated by the Monetary Authority of Singapore (MAS). Banks and other participating financial institutions can set their income requirements and decide whether to approve your application. Even if you meet the income criteria, it’s up to the banks to assess your situation and whether to approve your loan application.
When applying for the Debt Consolidation Plan Singapore, you’ll need to provide the following requirements:
However, some banks request additional requirements based on your income source.
Salaried Employees and Partly Commission-Based Earners:
100% Commission-Based Earners:
Self-Employed:
If you can complete these documents quickly, you can process your Debt Consolidation Plan and ensure approval. But getting denied is expected if you lack one, especially the latest Credit Bureau report.
Many Singapore Citizens and Permanent Residents apply for a Debt Consolidation Plan DCP because of its benefits.
A Debt Consolidation Plan helps you control your debt more. You make just one monthly payment instead of juggling multiple payments at once. It makes it easier to keep track of your finances and ensures you fulfil all your dues so you won’t miss any payments.
Banks often offer a free credit card when you get a Debt Consolidation Plan. You can use the latest credit card for daily expenses, and is usually limited to an amount equal to your monthly income. It’s essential for managing your day-to-day spending without adding more debt.
With a Debt Consolidation Plan, you know exactly how much you must pay monthly. The repayment amount is fixed, which means there are no surprises. Budgeting your money and planning for the future is more effortless.
A DCP is a debt refinancing program which offers a light at the end of the tunnel. It works best in your finances towards becoming debt-free. However, a DCP does not mean you have to go back into the rabbit hole of debts.
Signing up for a DCP entails some charges you must know about.
Processing Fee. Most financial institutions charge this fee to set up the DCP. It covers the handling cost of your application and setting up your new loan.
Annual Fees. Some banks have a yearly fee for maintaining the DCP, similar to a credit card’s.
Late Payment Fees. Of course, you will be charged for late payment whenever you miss a payment or pay late.
Early Repayment Fee. Some banks charge an early prepayment fee if you pay off your DCP early. Banks charge it as it loses the interest they would have earned if you kept the loan for the entire term.
Interest Rates. The interest rate for a DCP varies based on your financial institution and credit history. Always compare rates from different banks to find the best deal.
Other Charges. These can be administrative fees or charges for additional services. Read all the terms and conditions governing all the costs involved.
Knowing these fees can avoid any surprise payments. Always ask your bank for a detailed breakdown of all the costs before you sign up for a Debt Consolidation Plan.
All banks and financial companies that give out loans or the latest credit cards are part of the Debt Consolidation Plan. Right now, 17 banks and financial companies offer the DCP. Here is the list of revolving credit facility available:
This list can change, and new banks might join or replace others.
Now that you understand the terms and conditions governing a DCP and where to apply, here’s the next thing to do.
Step 1. Submit your Debt Consolidation DCP Application Form. Download the application form from your chosen bank, complete it, and submit it with the necessary supporting documents.
Step 2. Wait for the Debt Consolidation Plan Singapore approval. Banks will notify you about the progress of the DCP application. You may receive a confirmation letter stating approval, which usually takes 7-10 working days.
Step 3. Fund transfer and suspension of existing facilities. Once approved, banks will send the funds to settle your outstanding balances with the respective banks. In addition, all your existing unsecured financial institutions will be suspended.
Applying for a Debt Consolidation Plan sounds easy and magical. It feels like all your debts are gone with a wave of a wand. However, remember that you still have to repay your trusted and registered loan provider. This way, you can build a healthier credit score and manage your finances better.
A Debt Consolidation Plan DCP is the best money-solving tool for a Singapore citizen or permanent resident drowning in debt. However, not everyone can apply for it. You must meet all the eligibility requirements and the latest income documents to borrow.
But what if you miss a point? How can you overpower your endless debts?
Cash Mart Singapore can be your best solution. It is a licensed money lending company that approves low-interest personal loans to any eligible borrower. Take note that it caters even to foreigners with working permits.
You can quickly pay off your debts with Cash Mart’s instant cash loan. However, you must discuss your current financial situation with their executive personnel. As a legit moneylender, Cash Mart SG guides every applicant with the most suitable loan products and services. As a result, you can repay all your debts without incurring more interest. Most importantly, you can manage the loan repayment flexibly.
Check a money lender Singapore open now!