Why Trust MoneySmart?In Singapore, the most common way to consolidate multiple high-interest unsecured debts is through the Debt Consolidation Plan (DCP). This is a formal refinancing programme, backed by the Association of Banks in Singapore (ABS), that allows you to combine existing unsecured debts from different banks—such as credit card balances and personal loans—into one facility with a single monthly instalment at a participating financial institution.
The main goal is to streamline repayments and potentially lower total interest costs, as your new bank will service all your prior balances under this plan.
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1. How the process works
Apply with a participating bank, such as DBS, OCBC, HSBC, or UOB.
On approval, the chosen bank buys out your qualifying unsecured balances from other banks.
The funds are paid directly to your creditors; you do not receive any cash.
All your existing unsecured credit facilities (like credit cards and personal lines) are closed or suspended to prevent additional borrowing.
For your first DCP, banks typically include a buffer amount (often about 5% above your outstanding balances) to cover any interest or fees accrued while the application is processed.
2. Eligibility criteria
To qualify for a DCP in Singapore, you must meet strict requirements—these are verified by the banks before approval:
Singapore Citizen or Permanent Resident.
Annual income between S$20,000 and S$120,000 (some banks require a minimum of S$30,000).
Total interest-bearing unsecured debt across all banks exceeds 12 times your monthly income.
Net personal assets less than S$2 million.
3. Excluded loans
Not every type of loan can be consolidated under a DCP. Exclusions are:
Joint accounts.
Renovation, medical, and education loans.
Business-related credit facilities.
Secured loans, including home loans and car loans.
4. Key plan features
Repayment tenure is typically between 1 and 10 years.
Interest rates are generally much lower than credit cards (for example, ~3%–8% p.a. vs. ~26%–28% p.a.).
Some DCPs include a bundled revolving credit facility capped at one month’s income for daily essentials.
A “Debt Consolidation” code will be flagged on your Credit Bureau report for transparency and remains for 3 years after the plan is fully paid.
5. Alternatives if ineligible
If you do not qualify for a DCP, there are other options in Singapore:
Take a lower-rate personal loan to clear higher-rate debts, then repay the personal loan on schedule.
Use a balance transfer promotion with 0% interest for a limited period (usually 3–12 months), if you are disciplined about paying off the balance before the promotion ends.
Enrol in a Debt Management Programme (DMP) with Credit Counselling Singapore (CCS) to restructure and negotiate manageable terms across creditors.
Whichever route you choose, prioritise avoiding new borrowing while you clear your existing debts.
Read more on MoneySmart's guide to different debt consolidation options
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