Ultimate Credit Counselling Guide: What Are The Benefits, Programs Offered, etc.
“Credit counselling”, “Debt management”. The feeling of having to deal with debt is tough.
More so, when we run into financial issues, having someone to turn to during such times can conjure looks of doubt and judgement.
If you have no one to turn to or are simply looking at ways to correct your debt, why not try credit counselling?
What Is Credit Counselling?
Credit counselling helps borrowers struggling with debt better manage and restructure their finances. They do so by providing them with prompt financial guidance, education in a bid to improve their financial situation and guide them towards better debt management.
So, where then can you look for credit counselling services?
Credit Counselling Singapore (CCS) is where you can seek credit counselling help from if you are looking at restructuring your debt. They are a local, non-profit organisation that provides aid to individuals by imparting them with the necessary financial knowledge and financial management skills.
The goal is to ultimately empower people to take charge of their finances and make better financial choices in the future.
They are also recognised by the Association of Banks in Singapore (ABS).
What Is The Credit Counselling Process Like?
The process of credit counselling helps you take care of debt issues by providing you with the information and tools you need to manage your finances effectively. It includes budgeting education that teaches you how to set up a budget that you can work with and put it into action.
It also includes credit education that enables you to understand how credit works in terms of aspects such as why you should avoid paying just the minimum on your credit card and how interest compounds.
With credit counselling, you can get debt management assistance that entails negotiating payments with your creditors. Financial planning assistance is used to develop a financial plan that is in accordance with your financial priorities and goals.
When it comes to dealing with your finances, being hands-on is essential. Just like any other problems in life, taking the right steps to sort out the problem as early as possible can prevent it from becoming a major disaster.
If you have started missing due dates on credit cards or are worried about making your next payment, reaching out to a professional credit counselling service early is key.
Other indications that you may need to go for credit counselling include being afraid to open your bills, using alternative sources of cash such as taking out payday loans and borrowing money from family and friends, only paying the minimums on credit cards and maxing out credit cards.
Credit Counselling Singapore (CCS) is a great option for anyone who wants to manage their money better, minimise their financial stress or get out of debt. Some people seek credit counselling services because they need help with controlling their expenses and creating a budget. Others are overwhelmed by their credit card bills and feel unable to keep up with their payments.
Regardless of what your financial challenges may be, credit counselling can provide a plan that will help you overcome them. It is possible for everyone to improve their financial wellbeing.
What Are The Services Offered By Credit Counselling Singapore (CCS)?
CCS provides various services that are aimed at addressing unsecured debt issues. These services seek to improve financial knowledge and curb debt problems.
The services provided by CCS are divided into 2 key categories, namely assistance with unsecured debt and financial education programmes.
1. Informative Talks On Debt Management
Talks on debt management are provided free and cover general information regarding debt issues. Applying to CCS for assistance, negotiating with creditors and addressing debt problems are among the topics that are included in the talks.
If you are unsure about your situation and how to cope with debt, this is a good step to begin with. The talks on debt management are held every evening on weekdays and biweekly on Saturdays. Each session usually lasts for approximately 2 hours.
Although your situation may not currently be dire or urgent, it still pays to learn more about debt management. This way, any current debts that you might have now will not snowball and result in a larger debt.
2. Financial Counselling
Going for financial counselling sessions is a worthwhile option if you need someone to help you understand your financial circumstances and the options that are available for your situation.
A financial counsellor evaluates your financial situation during a one-on-one session before determining the best solution or next step.
It is important to note that effective financial counselling requires you to be transparent about your financial situation in order to achieve the desired outcome of the process. This ensures that the financial counsellor is able to give you specific and pertinent advice that is beneficial.
CCS charges a one time $30 fee that it can assist you with, in case you are unable to pay it.
3. Debt Management Programme (DMP)
Debt Management Programme (DMP) refers to a structured debt repayment plan with credit card companies and consumer banks within Singapore. These include banks such as POSB and UOB.
It is intended for borrowers who are facing major financial challenges with unsecured debts and are finding it difficult to fulfil their financial responsibilities.
As the sole Social Service Agency that operates within Singapore and provides the DMP option, CCS can come up with a DMP proposal on your behalf. The agency serves the purpose of facilitating a repayment plan between you and the creditors.
You may enjoy the benefits of an extended repayment period and lower interest rates for the remainder of your unsecured debt balances if you qualify for a DMP. The criteria include having accounts with banks that are a minimum of 1-year-old, total unsecured debt of a minimum of $10,000 and unsecured debts with multiple creditors.
4. Enterprise Credit Counselling Credit Programme (ECCP)
ECCP helps owners of small businesses who are in debt to be aware of their financial liabilities and obligations in case their businesses are no longer sustainable. The CCS might propose a debt repayment plan to deal with your business debts along with your personal unsecured debts under the ECCP.
Business owners need to meet certain criteria that include having unsecured debts with financial institutions and banks that do not exceed $500,000, having business assets that do not exceed $1 million and being in the process of shutting down or already having terminated a business.
Financial Education Programmes
In addition to debt management programmes, CCS can teach you more about budgeting and improve your financial literacy through the following programmes:
1. Financial Literacy
Financial literacy workshops and talks focus on improving financial literacy, money management and credit usage within Singapore. Topics range from making informed choices about loan products to preparing financially for major events such as weddings.
2. Centsible Retirement Programme (CRP)
CRP refers to a programme that is specially designed to assist people who are 50 and above to become more financially independent during their retirement. CRP is useful for aligning your retirement projections with the financial resources that are available for retirement.
Who Should Consider Credit Counselling?
One of the common misconceptions regarding credit counselling is that you should have accumulated a certain amount of debt in order for you to benefit from the service.
However, everyone can benefit from working with a professional financial counsellor during credit counselling sessions. A credit counsellor goes over your budget to determine the areas where you need to improve your spending habits, provides suggestions for paying off debt and talks about saving tips.
Whether you need a debt management programme or just want guidance on how to manage your finances better, you can always gain something from credit counselling.
That said, those who are lagging behind on payments or have accumulated large amounts of debt can benefit the most from a credit counselling service.
How Can I Apply For Credit Counselling?
Prior to going for credit counselling at CCS, you are required to attend an online debt management course or talk on debt management. During both the course and talk, CCS provides in-depth information about debt management and dealing with creditors.
After gaining more insight into debt management through the course or talk, you can consider moving on to the step of applying for credit counselling. It is advisable to ask for a counselling appointment if you need debt advice or seek to learn more about debt management.
Booking a counselling session consists of submitting a Counselling Request Package along with the required supporting documents to the credit counselling agency. The documents needed include your credit report, latest 15 months statements from CPF and proof of income. Afterwards, you can expect CCS to get in touch with you to arrange an appointment.
While attending a counselling session, it is important to be honest and open with the credit counsellor about your financial situation.
Improve Your Financial Health With Credit Counselling
If you are facing financial difficulties, you might wish for a magical way to get rid of your debt. However, the reality is that debt piles up easily but eliminating it is much harder. The good news is that there is a way out of your predicament.
Getting out of debt involves budgeting more and spending less but if you do not have the knowledge or tools you need to do this, your debt problems can continue to overwhelm you.
This is where credit counselling comes in handy. Credit counsellors will help you find practical solutions to your financial woes.
While credit counselling can help to guide you and better your financial health, sometimes, we might require some extra cash to repay any overdue bills. There is a solution!
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