Credit Card Debt in Singapore - Best Personal Loans for Repaying Your Bills (2024)

Credit card debt is a common phenomenon in Singapore. Some of us might not even be aware that paying the "minimum" on our credit card bills can cause our debt to snowball, making it harder and harder to repay our bills. If you are struggling to conquer your credit card debt, a smart method to clear it is to get a personal loan. Under this debt repayment method, you use the borrowed cash to pay off your credit card debt in one fell swoop, then repay the loan at a more comfortable pace - and at a much lower interest rate. Here's the lowdown on repaying credit card debt with a personal loan.

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What Can You Do About Your Credit Card Debt in Singapore?

Credit cards are a wonderful way to earn rewards on your spending, provided you repay your bills faithfully every month. But for those who can't repay on time, the sky-high interest rates and numerous late payment fees start kicking in, causing your credit card debt to start snowballing. If you're struggling with unpaid credit card bills, here are 3 common loan products that allow you to tackle that snowball.

Personal Loan

The most flexible way to repay outstanding credit card debt is the personal loan. You can choose the loan amount and loan tenure that suits you. You will need to exercise discipline, however, in using the cash to repay your credit card bills in full - instead of letting it contribute to your debt. On top of that, you need to commit to the monthly repayments, which are likely significantly more than the minimum payment on a credit card bill.

Balance Transfer

If you face cashflow issues at the moment but know for sure that you'll get a large sum of money soon, a balance transfer is another option to consider. You can apply for a balance transfer with your credit card issuer. After you pay an upfront processing fee, a balance transfer temporarily changes the interest on your debt to 0% for a period of your choosing (3 to 18 months). During this time, you need to pay a small minimum of 1% to 3% every month, but by the end of the period, you need to repay your debt in full.

Debt Consolidation Plan

Finally, debt consolidation plans are special personal loans open to Singapore citizens and PRs who are heavily in debt. You'll only qualify if your unsecured/credit card debt amounts to at least 12 months' salary. On top of that, there are further eligibility conditions to fulfil, such as your income and net assets. Similar to a personal loan, this is a fixed repayment plan, but it is less flexible. We'll go into details further below.

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Repaying Credit Card Debt With a Personal Loan - Pros & Cons

As mentioned, a personal loan is oftentimes the most flexible way to repay your credit card debt. The procedure is also relatively simple. You just need to apply for a personal loan, and use the disbursed cash to pay off your credit card bills immediately. Then, commit to repaying the personal loan according to the fixed repayment plan you picked... while making sure you don't incur any more credit card debt.

That said, it's not for everyone. Here are some advantages and disadvantages of using a personal loan to clear your credit card debt.


Easy to compare and apply for a personal loan through MoneySmart

You're able to choose the interest rate and loan package for your needs

You can borrow a small sum (starting from S$1,000)

You can choose repayment periods ranging from 1 year to 7 years

Repayment plan is fixed and does not fluctuate monthly, so it's easy to budget for

Has lower interest rate compared to credit card interest rates


If you have a bad credit history or low income, it may be hard to get a personal loan (or low interest rate)

You may be tempted to borrow more than you need to pay off your credit card debt

It requires lots of discipline to use the borrowed cash to repay your bills

Personal loans are lower interest than credit cards, but there are also fees to look out for

Personal loans are a financial commitment that will span years

If you have underlying debt issues, they will not be addressed

Now that you're aware of these important aspects of using a personal loan to clear your credit card debt, here are our top picks for low interest personal loans.

Calculate Your Personal Loan Payments

Want to know how much you'll need to pay every month with your personal loan? Head to MoneySmart's personal loan calculator and comparison tool to figure it all out. All you need to do is input your details and desired loan amount and tenure, and we'll automatically find the best options for you.

Repaying Credit Card Debt With a Balance Transfer - Pros & Cons

A balance transfer is different from a personal loan, in that you need not apply for a separate product to pay off your credit card debt. You can go straight to the credit card provider and ask for a balance transfer. As its name implies, your credit card balances will be transferred (consolidated) into a special credit card, and you are effectively granted an extension of typically 6 to 12 months. This gives you some time to raise funds and puts your high-interest debt on pause. But what are the advantages and disadvantages of this move?


  • Straightforward to apply for - just check your credit card provider's balance transfer promotion
  • Easy to qualify for a balance transfer since you already have a credit card
  • Interest rate goes to 0% (albeit for a limited time only)
  • You do not incur additional debt with a balance transfer
  • Short-term commitment - will not take years and years to repay
  • Makes most sense if you can raise cash within months, e.g. selling off assets or getting a bonus
  • Cons:

  • You can't compare packages across different providers and choose the one you like
  • Balance transfers are promotional in nature, and only a short term fix
  • Once the 6- or 12-month promo period expires, the interest rate shoots back up
  • You do not clear your debt with a balance transfer, only put it on hold temporarily
  • Have to pay a one-time processing fee
  • It's a hassle to track if you have multiple credit card providers
  • Difficult to budget for repaying credit card debt by end of the period - no fixed repayment plan
  • If you have underlying debt issues, they will not be addressed
  • Repaying Credit Card Debt With Debt Consolidation Plan - Pros & Cons

    Finally, let's take a look at the debt consolidation plan or DCP. DCPs are a debt repayment scheme supported by the Singapore government, and is only open to Singapore citizens and PRs. Its aim is mainly to tackle the chronic or heavy credit card debt, so you will find that it's a lot more restrictive and severe than a personal loan or balance transfer. DCPs work similarly to personal loans, except this time the bank will be the one repaying the credit card debt for you. But it's not all that simple. Here are the pros and cons to bear in mind:


  • Debt consolidation plans are open to Singapore citizens and PRs only
  • Your annual income needs to be between S$20,000 to S$120,000, and your net personal assets
  • Your total unsecured debts need to be more than 12 times your monthly income in order to qualify
  • If you meet the above requirements, you can get a DCP even if your credit history is poor
  • It's easy to compare and apply for debt consolidation loan packages on MoneySmart
  • Packages range from 1 to 10 years, so you can extend the loan to find a comfortable monthly payment
  • The DCP provider does the administrative bits for you, which is good if you lack the discipline to do so yourself
  • It's easy to budget for a DCP's fixed monthly repayment plan compared to fluctuating credit card bills or balance transfer
  • A DCP charges interest, but it's still much lower than that of credit card debt
  • Debt consolidation plans are most effective for tackling chronic debt problems
  • Cons:

  • You don't get much power to choose the interest rate / package that you want
  • It's not a free pass - you still have to pay processing fees and annual interest, just like any other loan
  • Upon approval, all your existing credit facilities will be closed except a line of credit (capped at 1X your monthly income) for daily expenses
  • It's up to 10 years(!) of financial commitments
  • Compare Debt Consolidation Plans

    With at least 8 providers offering debt consolidation plans in Singapore, you'll want to compare the interest rates and packages to find the best one for your needs. Use MoneySmart's debt consolidation plan calculator and comparison tool to check out the options at a glance.

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    Frequently Asked Questions

    Is it better to get a personal loan to pay off credit card debt?

    In general, yes, because personal loans have much lower interest rates than that of credit cards. If your credit card bill keeps inflating due to the crazy-high interest rates and overdue payments, it's probably better to pay it off in one shot and start afresh. A personal loan allows you to do that with a big chunk of cash. However, the downside is that you need to commit to the monthly repayment schedule for your personal loan. The monthly payments can be substantial, and bear in mind they typically stretch for a few years. This may affect your cash flow in the near future as well.

    What debt should you pay off first?

    If you have multiple debts to repay, you might feel overwhelmed without a strategy to tackle them one by one. Some borrowers pay off their smallest debts first (because they are easiest to clear), while others repay whichever borrower has the most aggressive debt collector first. There is nothing inherent wrong with any of these strategies, but if can choose, you should opt to pay off the highest interest debts first (typically credit card debt). This means paying the absolute minimum on your other loans while you focus on paying off the credit card bills ASAP. Once the highest interest debt is cleared, move on to the next highest, and so on.

    Is a personal loan bad for your credit score?

    You might wonder if it's even a good idea to take on another debt in the form of a personal loan - given that your credit score isn't looking so stellar right now. Well, a personal loan may actually improve your credit score... But only if you make your repayments in full, punctually and faithfully. This establishes a good payment history which looks good on your credit history. On the flip side, there's always the risk of running late or short on your personal loan repayments, which would negatively affect your credit score.

    What else can I use my personal loans for?

    There are an array of loans that are available. However, do some due diligence on knowing what risks come with each loan and whether taking on the debt is able to improve your financial situation. If you are interested to know what different loans are available, we written a short guide on the different ways to use a personal loan in Singapore.