As per reports, 4,000 Singaporeans each month averaged unsecured debt levels of 12 times or more than their monthly salary. Even if this represents a small portion of Singapore’s 1.5 million unsecured credit customers, it’s still a concerning statistic. A debt consolidation loan in Singapore may be beneficial in this situation. We don’t blame you if you’ve never heard of it! Debt consolidation loans in Singapore were just introduced last year, and the acronym – debt consolidation loan – is a mouthful. When used correctly, however, a debt consolidation loan in Singapore may be an excellent tool for assisting you in paying down high-interest debt. In this blog, you will get to know all about debt consolidation loans in Singapore.
A debt consolidation loan is a debt refinancing scheme that allows a client to combine all of his unsecured credit facilities (credit cards and some forms of unsecured loans) with one cooperating financial institution. Certain types of unsecured loans, including joint accounts, renovation loans, school loans, medical loans, and credit facilities issued to enterprises or for commercial reasons, are not covered by debt consolidation loans in Singapore.
Benefits of a Debt consolidation loan in Singapore
If you are saddled with several debts and have opted to employ a debt consolidation loan in Singapore, here are the primary advantages to look forward to.
- The ability to consolidate several debts into a single payment
People take out loans to invest in many areas in their lives. If you have various loans and credit card obligations with variable interest rates, you’re probably paying a lot more than you should. Because of the extended loan term, debt consolidation loan makes paying such debts easier and may even cut monthly payments.
- Consolidated loans might help you save money on interest rates.
Most unsecured loans, such as credit cards, have extremely high-interest rates, which dramatically increase your monthly debt load. You will be able to acquire reduced interest rates on the new single account if you clear these many high-interest rate accounts and combine them into a single obligation.
- You get to choose the length of your loan
In Singapore, the minimum monthly payment for most credit cards is 3% of the outstanding debt. You may be charged late payment costs if you do not pay the appropriate amount. If you can’t afford to make the minimum monthly payments, you’ll be trapped in a debt cycle.
When you consolidate your debts through a debt consolidation loan, on the other hand, you may pick your chosen loan term to make monthly payments more bearable. With Online Credit’s Debt Consolidation, you may select a loan term from one to ten years, with an EIR of 8.5 percent per year for one to seven years and 10 percent per year for eight to ten years.
- A Consolidated Loan is an Excellent Way to Pay Off Debts More Easily
Credit card bills might take years to clear before being paid off completely. Many credit cards do charge interest on the amount outstanding, and banks don’t mind if you pay the loan off in five or 10 years. One of the primary advantages of a debt consolidation loan is that it considers a variety of aspects, including your credit score, the term of your loan, and the amount you owe, to create the ideal plan for you. As a result, a debt consolidation loan in Singapore has a shorter payback period, allowing you to look forward to a life free of bills finally.
Do You Meet the Requirements for a Debt Consolidation Loan in Singapore?
Only nationals and permanent residents are eligible for a debt consolidation loan in Singapore. Furthermore, you must have a steady income of between $30,000 and $120,000. Furthermore, your unsecured debt amounts should be more significant than 12 times your monthly income.
Another condition to be aware of is that you are only permitted to have one debt consolidation loan plan at any given time. Some banks in Singapore may be ready to provide you with cash back if you refinance your debt consolidation loan.
After you’ve enrolled in a debt consolidation loan in Singapore, you won’t be able to apply for a new loan or credit card until your current commitments have been lowered to manageable levels. According to most institutions, the debt must be reduced to less than eight times your monthly earnings.
What Makes a Good Debt Consolidation Loan?
So, while looking for the finest consolidation loan provider, these are the essential factors to look for.
- A simple application process should be available from the provider.
When consumers approach banks for debt consolidation, they are usually already under a lot of stress. The ideal bank should quickly provide a smooth approach to acquire the needed assistance with different debts quickly. With Online Credit Pvt. Ltd. assistance, you will be able to examine the several banks that have given you a debt consolidation loan, as well as the various debt consolidation options available.
- Commitment to Assisting Borrowers in Resolving debt
Poor financial management causes the majority of individuals to get into debt. Instead of borrowing only what they require, they borrow the largest amount available from the bank. A competent debt consolidation financial services company should be dedicated to assisting debtors in developing effective financial management skills. This is when Online Credit Pte ltd. enters the picture. Your financial situation is our first priority, and we’re here to help you improve your financial situation.
- Have a variety of financial products
When you enroll in a Singapore debt consolidation program, you must refrain from taking out new loans or credit cards until your debt is reduced to less than eight times your monthly income. After you’ve reduced your debt to this level, you’ll want to resume borrowing, but in a more responsible manner. As a result, a good debt consolidation loan provider should offer a variety of loan products, including remodeling loans, personal loans, student loans, and wedding loans, so you may use them again in the future.
- Consolidated Debt Loan Refinancing is possible.
After you pick a specific debt consolidation plan with a certain bank, your credit score is likely to rise in the months following your decision. This indicates you’re no longer a high-risk party, as you were when you had many loans. As a consequence, a reputable bank should be willing to refinance your combined debt loan at a cheaper interest rate for you.
Taking up a debt consolidation loan in Singapore is the first step toward making a positive change in your life. On Line Credit Pte Ltd. makes sure that you will not only be able to pay off your many obligations, but you will also be able to reduce your high-interest rates considerably. You will also go on a journey to improve your credit score.
