Best debt consolidation plans in Singapore 2020

If you’re caught in a cycle of mounting interest charges and your total debt level keeps piling up, it’s time to consider a Debt Consolidation Plan (DCP).

Debt Consolidation Plans are a government-approved scheme offered by banks that combine all your open unsecured credit under one account. 

With only one consolidated debt to keep track of, it’s easier to manage the repayment. The interest rates for a DCP may also be lower than a regular personal loan.

Tenures can range from 1 to 10 years and each plan has its own set of interest rates (often flat) and features, and they usually come with a one-time processing fee. 

Here is a summary list of the best debt consolidation plans in Singapore for 2020.

Best for lowest interest rate: DBS/POSB debt consolidation plan

For the lowest interest rate possible, look no further than DBS/POSB’s Debt Consolidation Plan. 

DBS/POSB offers the lowest interest rate in the market of 3.58 per cent p.a (EIR from 6.56 per cent p.a) with a loan tenure of up to 8 years.

It allows you to consolidate all your credit cards and unsecured loan balances while enjoying attractive benefits such as receiving 3 per cent cashback when you refinance your loan with DBS/POSB.

Keep in mind that the interest rate offered to you is based on your personal credit profile and may differ from the published rate.

This is only available to Singaporeans and Singapore Permanent Residents (PR). 

Best for refinancing: Standard Chartered debt consolidation plan 

If you would like to refinance a Debt Consolidation Plan, you can take advantage of Standard Chartered’s offering. 

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Standard Chartered offers a monthly instalment plan starting from 3.98 per cent interest rate p.a (EIR from 7.7 per cent p.a). Loan tenures range from 3 to 10 years.

According to the bank’s online calculator, expect to save $12,719 on an outstanding balance of $60,000 over 7 years.

The plan comes with a Standard Chartered Platinum Mastercard credit card with a credit limit of your one-month income – great for taking care of daily expenses.

Bear in mind that you will have to double-check the interest rate offered to you as it is based on the bank’s assessment of your credit profile. It is not guaranteed that you will enjoy the headlining 3.98 per cent interest rate. 

Best for complimentary insurance: Citi debt consolidation plan

If you want an added peace of mind, Citibank’s Debt Consolidation Plan is the way to go. 

You can get greater protection thanks to complimentary insurance coverage that pays off up to $160,000 of indebtedness in case of accidental death or total permanent disability.

You have the option to choose a loan tenure of up to 7 years, and you don’t have to pay any processing fees. 

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If you are repaying $60,000 debt with a total monthly sum of $2,000 to multiple banks under the prevailing credit card interest rate of 25 per cent p.a, Citibank predicts savings of $983.36 monthly with their debt consolidation plan.

Citibank will also provide you with a credit card with a limit of your monthly income to help defray daily expenses. 

A minimum annual income of $30,000 is required for existing Citibank customers, up to a cap of $120,000. If you’re not an existing Citibank customer, a minimum annual income of $48,000 is required. 

Best for no processing fee: UOB debt consolidation plan 

If you’re someone who is sensitive towards extra costs and fees, consider UOB’s Debt Consolidation Loan.

UOB offers a 4.5 per cent p.a flat interest rate (EIR 7.5 per cent) for loan tenures of 6 years. Besides $0 processing fee, it also allows for relatively affordable monthly repayments.

The shorter maximum loan tenure here, compared to other bank’s debt consolidation plans, may be a welcoming feature for those who are reluctant towards long drawn out loans which increase interest repayment. 

The plan also comes with a Visa Platinum Card with a credit limit of your one-month income to cover daily expenses. Note that whether or not you get offered the highlighted interest rate here depends on your credit score. 

Best for longest loan tenure: HSBC debt consolidation plan

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If you are looking for a loan tenure that has a longer repayment period, the HSBC Debt Consolidation Plan offers up to 10 years loan tenor.

While the Standard Chartered Debt Consolidation Plan and the BOC Debt Consolidation Plan also offer 10 years tenor, HSBC offers personalised rates from as low as 3.8 per cent p.a (EIR 7 per cent p.a.) with no processing fee.

You will also receive 5 per cent cashback upon approval of your Debt Consolidation Plan refinancing with HSBC.

This article was first published in SingSaver.com.sg.