We found 1 HSBC Debt Consolidation Loan for you!
Per Month
S$946
Per Month
- Interest Rate*
EIR: 8% - 4.5%
- Total Amount Payable
- S$34,050
- Processing Fee
- S$0
- Per Month
- S$946
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Debt Consolidation Plan Calculator - Note to Borrowers
MoneySmart lists Debt Consolidation Plan products that range between a minimum of 1 to a maximum of 10 years. The effective interest rate (EIR) of loan products on our site range from 7.70% p.a. to up to 11.08% p.a. The EIR of your loan will be dependent on the loan you apply for as well as your personal financial needs. For example, you would need to pay S$311/month for a S$10,000 Debt Consolidation Plan with a loan tenure of 3 years at 3.98%pa Interest Rate (7.70% EIR). This would equate to a total payment of S$11,393 over 3 years. Please view each Debt Consolidation Plan product in detail for a full breakdown of the interest rate chargeable, minimum and maximum loan tenure as well as processing fees (if applicable).
How to Use This Debt Consolidation Plan Calculator
Debt Consolidation Plan interest rates and packages are extremely dynamic; they can vary significantly depending on your loan tenure (period), the loan amount, your citizenship status, and your income.
To find a more accurate quote, please use MoneySmart’s Debt Consolidation Plan Calculator at the top of the page and enter the variables as accurately as possible. Our Debt Consolidation Plan Calculator will generate a list of loan packages, interest rates and repayment plans tailored to the information you entered.
You can always adjust the loan amount and loan tenure to find a comfortable monthly repayment amount. Note that our Debt Consolidation Plan Calculator can only give you an estimate of the interest rates; the provider has final say on the rates they offer you.
Who Can Apply for a Debt Consolidation Plan?
Debt consolidation plans are not for everyone. There are 3 main eligibility criteria you have to meet:
Citizenship
Only Singapore citizens and PRs are eligible for a debt consolidation plan.
Financial Status
You must earn between S$20,000 and S$120,000 per year, and your net personal assets should be less than S$2 million.
Outstanding Debt
You have to be heavily enough in debt to apply. Your total outstanding unsecured debt must be at least 12 months’ salary to apply.
What If You Don’t Qualify for a Debt Consolidation Plan?
A debt consolidation plan is really just a special type of personal loan. So, if you do not meet the qualifying criteria, such as the citizenship or outstanding debt requirements, you can still apply for a regular personal loan to pay off your high-interest debt. Here’s how:
Step 1
Apply for Personal Loan
Compare personal loan interest rates on MoneySmart and apply for a loan package that suits you. For example, Standard Chartered CashOne loan has a 3.48% interest rate.
Step 2
Pay Off Your Debts
Once your personal loan is disbursed, use the cash to pay off your high-interest debts e.g. credit card bills. Don’t spend it! If you are looking for the best personal loan for credit card debt, you can check out our list of recommended loans.
Step 3
Stay Disciplined
Commit to your personal loan repayment plan, and avoid incurring any further debt. Consider cancelling your credit cards/lines.
Are There Any Other Alternatives?
In light of the Covid-19 situation, Singapore citizens and PRs have another option for dealing with high-interest unsecured debt from credit cards or credit lines. From now until 31 Dec 2020, you can ask your bank/financial institution to convert your credit card debt into a term loan with a standard Effective Interest Rate of 8% p.a.
You can choose a loan tenure of up to 5 years. There is no penalty for early repayment of this loan and your credit score will not be affected. However, you will need to prove that your income fell by at last 25% due to Covid-19.
What If You Can’t Repay Your Debt Consolidation Plan?
If you are currently already on a debt consolidation plan but have trouble repaying due to Covid-19-related income loss, you can apply for financial relief from now until 31 Dec 2020. You can get your loan tenure extended up to 5 years. All you need to do is speak to your current DCP provider and prove that Covid-19 has affected your income. At the time of application, your repayments should be between 30 to 90 days past due. This loan extension will not affect your credit bureau report.
Frequently Asked Questions
What is a debt consolidation plan?
- A debt consolidation plan combines all your unsecured debts (such as multiple credit card bills) into one big loan with just one bank or financial institution. The bank clears your outstanding credit cards and accounts so that you can concentrate on repaying the DCP loan. Since DCP interest rates are typically much lower than that of credit cards, it is easier to repay.
Who can apply for a debt consolidation plan?
- Only Singapore citizens and PRs are eligible for a debt consolidation plan. You need to earn between $20,000 and $120,000 per year, and your net personal assets (all your assets, minus any liabilities) should be valued at less than $2 million. On top of these, the bank offering the DCP loan may have further requirements while assessing your eligibility.
What kinds of debt can’t be consolidated under DCP?
- Debt consolidation plans are for unsecured credit, so it excludes secured loans like car or housing loans. If you took out a loan for a specific purpose, such as a renovation, education, medical or business loan, it also cannot be consolidated under DCP. Your total debts need to be more than 12 times your monthly income in order for you to qualify for a DCP loan. (Although, if it’s less than that, you can still take out a personal loan to consolidate your debt.)
How much will you owe the bank under a debt consolidation plan?
- On top of adding up your outstanding bills + interest, the bank will also add up to 5% on top of that for your first DCP loan. That’s because in the time it takes to pay off those credit card bills on your behalf, your old credit accounts might have accrued even more interest and/or fees. The 5% serves as a buffer for this purpose, and the excess will be refunded.
What else should you be aware of?
- If your outstanding bills are very high, there’s a chance that your approved DCP loan amount is not enough to cover all your debts. In this case, you’ll have to settle the shortfall directly with the credit card issuer, otherwise, your debts will not be cleared. Also, it’s possible to refinance your debt consolidation plan if you find a better one out there. You need to notify your bank and obtain a settlement notice before you transfer.
What documents do you need to apply for a DCP?
- When you apply for a debt consolidation plan, you should have the following documents ready: copy of NRIC (front and back), latest income documents, latest credit bureau report, latest credit card/unsecured credit loan statements, plus (for unsecured credit installment plans) a confirmation letter stating your unbilled balance.