A Comparison of the Best Debt Consolidation Plans in Singapore (2022)

Take control of your finances with these debt consolidation plans

Looking for a way to settle your debts conveniently? Debt consolidation is perfect for you. This method is an incredible option to help you streamline your debt payments and save on interest charges. When done right, it even has the potential to drastically change your monthly debt payments.

Want to compare debt consolidation plan Singapore options? Keep on reading.

Here at OMY, you will discover the following:

What Is a Debt Consolidation Plan?

Also called DCP, a debt consolidation plan is a tool that combines your existing debts into a single loan with a better interest rate. A debt consolidation loan is paid automatically so you can significantly reduce your stress about managing multiple unsecured debts at once.

What Can Debt Consolidation Plans Be Used For?

What Can Debt Consolidation Plans Be Used For?

Debt consolidation plans can be used for personal loans, credit lines, and credit card debts. Other unsecured loans like renovation loans, medical loans, business loans, education loans, and credit facilities for businesses are not eligible for DCP, as well as secured loans like home loans and car loans.

How Debt Consolidation Plans Work In Singapore

Knowing how to consolidate debt is integral. However, you must know that this is only recommended for people who have an outstanding debt that is significantly higher than their salary (up to 12 times more). For these instances, not going for credit consolidation Singapore is unwise because the interest charges alone will rack up over time.

Meanwhile, those with smaller debts can go with personal instalment loans or balance transfers.

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The way a debt consolidation plan works is a bank that provides your DCP will buy out your outstanding fees, balances, and charges from all your loans from various banks. Then, you just have to make monthly payments to your DCP provider until your debt is cleared.

When it comes to debt relief loans, the amount will not be deposited into your current or savings account. Instead, it will be paid straight to the financial institutions where you have debt.

For debt consolidation loans, you can borrow the equivalent of your outstanding balance, including fees that you incurred. If your DCP is not enough to cover all your balances, you are tasked to pay the balance to the lender.

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A 5% allowance will also be provided on your first DCP to cover incidental charges that you got while waiting for your DCP to get approved. If there’s a leftover amount from the allowance, it will be credited or refunded to you.

Debt Consolidation Plan Qualification

Not everyone can qualify for a DCP. First, you must have an annual income between S$30,000 and S$120,000. The minimum amount may be higher for self-employed or commission-based earners.

Second, you must have interest-bearing balances on unsecured facilities that are 12 times your monthly salary.

It is important to note that you can only have one active DCP at a time. However, it is possible to refinance your DCP with another bank with lower interest rates after three months.

Those who are already enrolled in an active debt consolidation plan will not be permitted to apply for a new loan or credit card until the outstanding balance is less than 8 times their current monthly salary. This way, you can be more focused.

What to Remember When Choosing Debt Consolidation Plans in Singapore

What to Remember When Choosing Debt Consolidation Plans in Singapore

Here are some things to keep in mind when shopping for a debt consolidation plan.

Consider your payment schedule

It is important to stick to a realistic repayment schedule, but still keep the interest and tenure in mind. You can break up your repayments into smaller and more manageable chunks rather than dealing with a large amount at one time. As much as possible, use DCP calculators provided by banks to your advantage.

Look for the lowest interest rates

Before applying a DCP in any financial institution, compare their interest rates side by side. This will help you find the plan with the lowest interest rate. Tons of DCPs are bundled with promotional perks such as cashback, improved interest rates, and other advantages to help you save more money.

Always stay on top of your debts

Once you have taken a debt consolidation plan, always stay on top of your debts. Monitoring your debt will help you get a better picture of your financial standing.

Don’t miss payments

When you go for debt consolidation Singapore, you will end up with just one loan with one bank. Missing a payment to this new bank can lead to late charge fees, which can drown you in debt even more.

Budget properly

Because you are paying your consolidation loan Singapore, be mindful of your spending. Make a monthly budget and stick to it. Use this to account for your monthly spending, including bills, groceries, and entertainment.

As much as you can, don’t use the bundles revolving credit facility

Many financial institutions will give you a revolving credit facility that amounts to your monthly salary. However, avoid using it since it may put you in financial trouble if your spending gets out of hand.

The Best Debt Consolidation Loan Options You Should Consider

Here are the best debt consolidation loans in Singapore. Don’t have time to look at each plan? Use the table below to compare each debt consolidation plan money lender side by side.

Debt Consolidation Plan Interest rate Tenure Perks
HSBC Debt Consolidation Plan Starts at 3.4% Maximum of 10 years No processing fee

Complimentary HSBC Visa Platinum Credit Card

S$300 cashback for first timers (valid until 30 September 2022)

5% cashback for DCP refinancing (valid until 30 September 2022)

UOB Debt Consolidation Plan Starts at 4.50% Maximum of 8 years Complimentary Visa Platinum Card
OCBC Debt Consolidation Plan Starts at 4.5% 3 to 8 years Complimentary OCBC Platinum Credit Card
POSB Debt Consolidation Plan/DBS Debt Consolidation Plan Starts at 3.58% Maximum of 8 years 1% cashback on your approved amount when you have a minimum loan tenure of 6 years (valid until 31 December 2022)

5% cashback if you refinance an existing DCP to POSB with a minimum loan tenure of 6 years (valid until 31 December 2022)

CIMB Debt Consolidation Plan Starts at 2.77% Maximum of 5 years Complimentary CIMB Credit Card
Citibank Debt Consolidation Plan Starts at 5.7% Maximum of 7 years n/a
Hong Leong Bank Debt Consolidation Plan Starts at 3.8% Maximum of 10 years n/a

HSBC Debt Consolidation Plan

Interest rate Tenure
Starts at 3.4% Maximum of 10 years

HDBC DCP is one of the best debt consolidation plans in Singapore. It allows you to stretch your monthly repayments for up to 10 years, and it offers interest rates as low as 3.4% per annum. With this plan, you can also enjoy no processing fees, as well as a complimentary HSBC Visa Platinum Credit Card.

When you sign up for a new or your first debt consolidation plan until September 30, 2022, you can enjoy S$300 cashback. Meanwhile, if you refinance your debt consolidation plan, you can enjoy 5% cashback.

They also have a helpful calculator on their page to help you calculate your potential monthly instalment.

Apply here.

UOB Debt Consolidation Plan

Interest rate Tenure
Starts at 4.5% Maximum of 8 years

With this DCP Singapore, you will be able to have more control over your finances. This DCP allows you to have a maximum loan tenure of 8 years, and interest rates start from 4.50% per annum. Although this debt consolidation plan Singapore does not have the best rate, it’s still worth considering for those who are existing UOB customers.

With this plan, you can get a complimentary Visa Platinum card. You can also take advantage of the free consultation for your finance journey.

Apply here.

OCBC Debt Consolidation Plan

Interest rate Tenure
Starts at 4.5% 3 to 8 years

Consolidating all your debt will become easier thanks to the OCBC Debt Relief Program. This plan has a repayment period of 3 to 8 years. You can make payments through online banking, fund transfer, cash deposit (machine), or cheque deposit. You will also receive a complimentary OCBC Platinum Credit Card.

For this debt consolidation loan, interest starts at 4.5% per annum. Loan approval may take up to 10 working days, and additional 5 working days to transfer the money to the respective banks where you have an outstanding balance.

To apply, download this application form.

POSB Debt Consolidation Plan/DBS Debt Consolidation Plan

Interest rate Tenure
Starts at

The POSB Debt Consolidation Plan will allow you to enjoy low interest rates starting at 3.58% per annum. It’s a great option for those who want to pay all their outstanding balances in a hassle-free way. The maximum loan tenure for this DCP is 8 years.

When you apply for a new debt consolidation loan Singapore, you can get 1% cashback on your approved amount when you have a minimum loan tenure of 6 years. Meanwhile, you can get 5%

cashback if you refinance an existing DCP to POSB (max of 6 years tenure). Promo is valid until 31 December 2022.

To apply for this DCP, download this application form.

CIMB Debt Consolidation Plan

Interest rate Tenure
Starts at 2.7% Maximum of 5 years

If you plan on paying back your outstanding balance in just 5 years, this is one of the best options for you. With the CIMB Debt Consolidation Plan, you can enjoy as low as 2.77% interest. However, you need to account for the 1% one-time handling fee.

This DCP comes with a complimentary CIMB Credit Card. Despite how affordable this cheapest debt consolidation loan is, it’s unfortunately not a possible option for those who want a longer loan tenure.

Apply here.

Citibank Debt Consolidation Plan

Interest rate Tenure
Starts at 5.7% Maximum of 7 years

With Citibank Debt Consolidation Plan, you are one step closer to achieving financial freedom. This DCP does not include any processing fees. You can choose a loan tenure of up to 7 years, and get a complimentary credit card. This DCP’s interest rate starts from 5.7% per annum.

Admittedly, this isn’t the cheapest DCP in the market. If you want to see an estimate of your DCP and how much you can save with it, use this calculator.

Apply here.

Hong Leong Bank Debt Consolidation Plan

Interest rate Tenure
Starts at 3.8% Maximum of 10 years

With interest rates as low as 3.8% per annum, this is one of the most affordable DCPs in Singapore. It allows you to stretch your payments up to 10 years for improved flexibility. This DCP will also grant you a revolving credit facility.

This loan has a 1.5% processing fee, with a minimum of S$300, or whichever is higher. Use HL Bank’s monthly instalment calculator to see an estimate of your consolidation plan.

Apply here.

Frequently Asked Questions on Debt Consolidation Plan

Still got questions about the best debt consolidation plans in Singapore? We’ll answer them below.

Will DCP affect my credit score?

Yes. However, it will only be temporary.

Does DCP raise your credit score?

It’s normal to see a decline in your credit score at first. However, consolidating your debt will increase your credit score over time. Just make sure you don’t increase your debt or make late payments.

Can I consolidate all my debts in one payment?

Yes, provided they are unsecured debts that are eligible for DCP.

What are the negative effects of debt consolidation?

Although this strategy is extremely helpful, you may have to deal with upfront costs depending on the lender of your choice. More than that, missing payments will drown you in debt even further.

What documents are needed to apply for a DCP?

This usually depends on the financial institution, but it usually includes:

· Front and back copy of your NRIC

· Latest income documents/payslip

· Unsecured credit loan/credit card statements

· Confirmation letter of your unbilled balance

· Credit bureau report

Is debt consolidation worth it?

Absolutely. Doing this will help you manage your debts easier since you don’t have to pay numerous monthly payments. You can just pay one and everything will be all set.

Will DCP affect housing loan?

No. Housing loans are not eligible for DCPs.

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