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.
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.
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.
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:
It’s important to note a debt consolidation plan cannot be used for secured loans such as housing, business, and renovation loans.
Not everyone is eligible for a debt consolidation plan in Singapore. To qualify for debt consolidation, you must:
You can get a DCP from the following financial institutions:
Consider the following before applying for a DCP.
After your DCP is approved, the financial institutions you owe will calculate the total amount you owe them as follows:
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.
If you want to switch banks, you’ll have to wait three months before the other financial institution evaluates and accepts your application.
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.
Once your DCP has been approved, all unsecured credit lines and credit facilities will be suspended.
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:
To apply for a debt consolidation loan from a licensed debt consolidation plan money lender, Singaporeans and permanent residents must:
Foreigners must present their:
Beware of illegal debt consolidation plan money lenders that might put you in more debt, or even worse, get you in legal trouble.
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.