A debt consolidation plan Singapore is a loan management tool that combines all your personal and credit card debts into one single debt, paying them in monthly installments. Typically, debt consolidation loans have shorter tenures than the original debts, thus allowing you to pay off your debt faster and save money on interest payments.
However, not all banks in Singapore provide debt consolidation plans, and even those that do have different terms, requirements, and rates. This is why it is important to do your research before settling on a lender for your debt consolidation loan. Lendela’s comparison platform is a great place to start, as it offers comprehensive comparison of the various debt consolidation plans available in Singapore.
Debt Consolidation Plan Singapore: A Step-by-Step Guide
When choosing a debt consolidation plan, it is important to compare the effective interest rate (EIR) and fees before making your decision. It is also important to note that the EIR can vary depending on the loan’s duration and loan amount.
To qualify for a debt consolidation loan, you must be a Singaporean or permanent resident aged 21 to 65 and have an annual income of between S$30,000 and S$120,000. You must also have unsecured outstanding debts that total more than 12 times your monthly income. In addition, you must have stable employment and a net worth of less than S$2 million. A good credit history and no ongoing bankruptcy proceedings are also essential. A debt consolidation loan may initially lower your credit score, but if you are disciplined in repaying the debt and keeping your balances low, it can improve over time.