What Is A Money Lender Debt Consolidation Plan?


At times, adulting may bring worrying financial situations. For example, you may be in debt or overwhelmed by multiple payments every month.

It can be hard to get out of debt. In fact, debt payment could take months or years, especially in a thriving country like Singapore.

The interest rates from different financial institutions could be causing massive stress to your finances.

The good news is that you can prevent all this through a debt consolidation plan money lender.

What Is A Debt Consolidation Plan?

A debt consolidation plan is a debt refinancing programme that makes repaying debts easier for those who have multiple debts.

This includes various types of unsecured credit facilities such as unsecured loans and credit cards from different financial institutions.

A DCP allows them to make one consolidated payment every month through a debt consolidation plan money lender.

This way, you only make only one payment to the debt consolidation plan money lender every month, instead of making multiple payments at varying interest rates to different lenders.

A debt consolidation plan allows you to pay off what you owe to various financial institutions through a debt consolidation plan lender.

Your existing unsecured loans or credit facilities will be frozen if your DCP application is approved. The debt consolidation plan money lender will then give you a revolving credit facility.

You can also opt for a debt consolidation loan with a licensed money lender.

This is a type of personal loan that also works to consolidate your debt through a debt consolidation plan money lender. But the eligibility criteria are different from that of a DCP.

How It Works

As mentioned, a DCP helps you put together all outstanding unsecured loan debts into one loan. Apart from the ease of repayment, the primary objective is to repay your debts at a lower interest rate.

If you have only one outstanding loan or you’ve never had a problem repaying your debts, you don’t need a DCP.

A debt consolidation loan plan is suitable for you if you are struggling to meet the various debt repayments at the end of the month.

With a DCP, you will now have only one debt consolidation plan money lender to repay each month – but the money will finally reach all the other money lenders that you owe.

Going to a debt consolidation plan money lender is the best way to settle multiple unsecure debts such as different credit cards.

Consolidating all your unsecured debts into one not only saves you money in terms of interest rates from different financial institutions, but relieves your constant worry of missing multiple repayments.

What A Debt Consolidation Plan Can Be Used For

A debt consolidation plan can only be used on credit cards and unsecured credit facilities with different financial institutions.

But you cannot use a DCP for these unsecured loan accounts:

  • Education loans
  • Renovation loans
  • Medical loans
  • Loans that were given under joint accounts
  • Credit facilities that are related to business

It’s important to note a debt consolidation plan cannot be used for secured loans such as housing, business, and renovation loans.

Who Can Apply For A Debt Consolidated Plan In Singapore?

Not everyone is eligible for a debt consolidation plan in Singapore. To qualify for debt consolidation, you must:

  • Be a citizen of Singapore or a permanent resident
  • Earn annual income between $20,000 to $120,000 with net personal assets of less than $2 million
  • Have outstanding loans on credit cards and unsecured credit facilities that are at least 12 times your monthly income

You can get a DCP from the following financial institutions:

  • American Express International, Inc.
  • Bank of China Limited Singapore
  • CIMB Bank Berhad
  • Citibank Singapore Limited
  • DBS Bank Ltd
  • Diners Club Singapore Pte Ltd
  • HL Bank
  • HSBC Bank (Singapore) Limited
  • Industrial and Commercial Bank of China Limited
  • Standard Chartered Bank (Singapore) Limited
  • Maybank Singapore Limited
  • Oversea-Chinese Banking Corporation Limited
  • RHB Bank Berhad
  • United Overseas Bank Limited

What To Consider Before Applying

Consider the following before applying for a DCP.

Additional 5% To Your DCP

After your DCP is approved, the financial institutions you owe will calculate the total amount you owe them as follows:

  • Total outstanding debt
  • Outstanding interest
  • An additional 5% interest

The additional 5% is used as a buffer to pay any incidental expenses you may have had between the time the DCP was approved and when the DCP funds were received.

Period To Finance With Another Institution

If you want to switch banks, you’ll have to wait three months before the other financial institution evaluates and accepts your application.

You May Not Get The Full Amount

Note that the approved DCP amount may be lower than the entire loan amount. Although the debt consolidation plan money lender you are dealing with will try to help you, your debt and income do matter.

In most cases, the approved DCP is likely to be less than the actual debt. If so, you have to find a way to repay the remaining amount.

Your Unsecured Credit Facilities Will Be Suspended

Once your DCP has been approved, all unsecured credit lines and credit facilities will be suspended.

Alternatives To The DCP

As mentioned, a debt consolidation plan money lender can be a good alternative to banks.

But it is crucial to only choose trustworthy lenders that are legally licensed by the Ministry of Law’s Registry of Moneylenders.

Some of the benefits that you can enjoy by taking debt consolidation loans from a licensed debt consolidation plan money lender are:

  • Fast approval process
  • Less rigid eligibility requirements
  • Flexible repayment schemes
  • Affordable interest rates

To apply for a debt consolidation loan from a licensed debt consolidation plan money lender, Singaporeans and permanent residents must:

  • Be 21 to 65 years old
  • Earn at least $20,000 annually
  • Present their NRIC

Foreigners must present their:

  • Employment pass
  • Proof of residency
  • Bank statements or payslips

Beware of illegal debt consolidation plan money lenders that might put you in more debt, or even worse, get you in legal trouble.

Choose The Right Debt Consolidation Plan Money Lender

Now that you know what a debt consolidation plan is and how it works, you just need to choose the right lender.

That said, getting a debt consolidation plan could be challenging because of the stringent rules that banks have in place. Don’t lose hope if you’ve been denied a DCP.

There are reputable companies that can work with you to find a solution to making your payments, such as a trusted debt consolidation plan money lender.

If you are thinking of consolidating your debt, contact licensed money lender Katong Credit.

We are a trusted licensed money lender in Singapore offering some of the most affordable interest rates and fees. Give us a call now or apply for a loan today.

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