Being in debt feels distressful and drains out all the mental energy of our minds. The only way to get rid of this is through debt settlements. Many private finance companies provide debt settlement using the debt consolidation process.
With uncertainties in financial economics, finding the right solution is highly risky. High-interest rates, Quick recovery time, and all other biased solutions are an extra pack of stress. In this article, we’ll be discussing debt consolidation loan Singapore which is the best option for settling down debts. Keep reading to find out:
What is debt consolidation and Why does it matter?
Debt consolidation is a financial process launched in Singapore on 23rd January 2017. Basically, with data consolidation loans Singapore helps you manage to consolidate all your owning from banks into one account. All the 14 participating banks specifically in Singapore have their respective DCP (debt consolidation loan) plans.
Candidates can visit banks and apply for Debt consolidation loans. Consolidating all the credit facilities like house renovation loans, small loans, big loans into single management, into one single large chunk of loan. And you can take a loan from the banks to pay off your other loan, particularly at lower interest rates.
Now coming to why? Most people aren’t comfortable loaning, say $ 80,000. And also to pay off the debt you don’t necessarily want to sell your properties or ask in your friend or family circle. Unlicensed lenders always lurk around to cheat people off of their money. To avoid such scenarios debt consolidation Singapore was launched. Where you can directly go to the bank and clear off your debts effectively.
How to clear debt using the debt consolidation process in Singapore?
Around 14 banks are registered for providing debt consolidation loans in Singapore where candidates can apply for unsecured bank loans to pay off other loans. Debt consolidation loans are equal to the outstanding dues that are used in your account statements. Along with the loan, you get an extra 5 % and greater allowance.
Your owing should not exceed $100,000, in that case, work with your credit card finance company and sort out the strategy to pay off debts. The thing about the debt consolidation process in Singapore is that not everyone is eligible for this process. Every person’s requirements, status, and amount are different, that’s why they make a conscious decision about going for the debt consolidation loan process.
In debt consolidation loan Singapore if your credit score is less you might not qualify for lower interest rates. Hence maintaining a good credit score is extremely important to make sense of using the consolidation of debts.
Steps to get a debt consolidation loan Singapore:
Getting a debt consolidation loan will begin by checking
- Combine unsecured borrowings from different banks into one single loan with one bank. However, classify the types of loan you’ll have to pay off: outstanding debts under joint accounts, Medical loans, Renovation loans, Education Loans, and Business-related credit facilities granted for businesses and business purposes.
- On top of making monthly installments payments for your debt consolidation loan, you will need to set aside an amount for continuing making payments for other loans excluded from DCP.
- After the approval of the Debt consolidation loan application, all unsecured credit facilities will be suspended. And you will be given a revolving credit facility in the form of a credit card or any other convenient mode.
- This facility is approved by the banks that are approved for debt consolidation loans in Singapore, by the government.
- The fees for this facility will be charged as per the facility following your debt consolidation banks terms and conditions.
Eligibility criteria for Debt consolidation loan Singapore
The eligibility criteria to apply for a debt consolidation loan in Singapore are;
- Candidate must hold Singapore citizen or must be PR.
- The candidate’s net personal assets must be less than 2 Million dollars. That is annual income of around $ 20,000 to $ 1,20,000.
- Their total unsecured debts on all credit cards and unsecured credit facilities must exceed 12 times your monthly income.
- For debt consolidation loan Singapore you can reach out to any of the 14 participating, licensed financial institutions
- The terms and conditions such as interest rates, and repayment periods may vary across different financial institutions.
Should you take a debt consolidation loan?
Moving from forgoing debt to a debt consolidation plan sucks you into a planned repayment of the loan. There are also red flags and pitfalls while you consider debt consolidating, like the little fees. And money, in the long run, can cost a lot, hence always examine your monthly income and enter into the debt consolidating process.
You feel relaxed with extra time, emergency cash, and low-interest rates in hand. But the only thing you have to repay is the debt consolidation loan. You get involved with your strategy and rely on the creditor to devise a fully-fledged repayment plan for you with only one single payment to make every month!
