7 Ways to Pay Off Your Credit Card Debt in Singapore

It is a fact that 9 out of 10 people in Singapore clears their credit card debt on time. Though this is a fact, a lot of them struggle with handling this, the main reason is not being able to use it in an optimized way. Is it also a case with you that you are finding it difficult to clear off the debt? The whole issue lies with the debt is the interest.

Compound interest functions in a way that the longer you take to pay your debts, the more you will end up paying. Leaving unpaid balance in your credit card which is not good.

Various reasons can be associated as to why people find it difficult to repay their debts, it might be losing a job or due to unnecessarily spending of money. If you are looking to deal with this problem, here are 7 easy ways that can help you clear your credit card debt Singapore in an optimized way.

 

1. Make Regular Repayments and Pay More Than the Minimum

You must calculate the amount that you need to pay every month to clear off your credit card debt in Singapore. Creating a budget for a monthly expense will help you find how you can afford the repayments and how much you need to save.

 

If you are just planning to pay the minimum credit card debt you are ultimately adding interest on the remaining balance. Hence, it is required that you do not pay the only minimum cutoff but also repay whatever debt is leftover.

 

You can start by setting up a debit system that would automatically make the required balance transfers from your debit card to a credit account making sure that you are on the right track.

 

For example, if you have a credit card debt of $6000 then you need to divide it by 12 and make sure that you pay $500 to avoid an increase in that amount. Set the same numbers on your debit account to be deducted at the starting of every month so that you can plan your monthly expenses from the remaining money only.

2. Repay the Debt With the Highest Interest Rate First

Go through your statement balance and look for the high-interest rate first. You need to start paying this credit card debt before other amounts. No matter how small or big the numbers are. It will help you lower interest which can be harmful to you in the long term.

 

Once you have cleared this debt, find the next high-interest rate amount and start this cycle once again. Remember, you are working on reducing your interests to ultimately pay lower interest to be debt-free. There are various online tools available that can help you calculate these amounts.

 

For example, if you have a credit debt at a 20% interest rate and another one at 25%, start working on 25% first to avoid paying the extra percent of debt which is unnecessary.

3. Consider Zero Interest or Balance Transfer Credit Cards

There is zero Interest credit card available with banks that would let you transfer your existing debt to a new credit card while having no interest rate implemented for an initial duration. Having one account instead of multiple will also make sure that you save on their annual processing fee. Remember, that you will have to repay this loan in a short span because of two reasons, one the 0% interest rates will be beneficial to you and secondly, once this duration is over, the interest rate will again get started adding with a high-interest rate.

 

To repay this balance promptly within a 0% interest rate, you can do a simple calculation. For example, if your bank gives you an introductory offer for a year, then divide your statement balance with 12 and make sure that you pay them monthly without fail. If you fail to do so you will have more interest to pay for the next month.

 

For example, if you have a credit debt of $6,000 and you opted for a 0% balance transfer offer for a year, you would have to pay $500 every month to make sure you clear your debt before the interest rates start getting added to your credit card again.

 

Please note that the balance transfers entail an admin fee that has to be paid in advance. If your transfer is approved, try to get the tenor as long as possible. Longer interest-free period will ensure that your overall interest will be lower.

4. Consolidate Your Debt With a Personal Loan

Credit Card Debt Consolidation plan

Taking a personal loan at lower interest could also help you consolidate the debt. It can help you with more savings as compared to credit cards. Compared to the zero interest debit card, a bank will provide a personal loan for a longer duration than that of the balance transfer.

The banks’ interest rate for personal loans is around 4% per annum, while on a credit card debt is much higher which is more than 20% per annum. Also, it is a fact that personal loan is timed for 1 year to 5 years, this means that you have more time to repay your debt while giving lesser interest.

One needs to also take into consideration that various other costs are associated with this personal loan like processing fees, application fees, yearly fees, or any other payment. Also, remember to stop spending any further amount via your debt account once you make transfers of the amount. Further saving is necessary.

If you are also interested in getting either a secured or unsecured personal loan from a moneylender to consolidate your debt, note that the interest rate per month is capped up to 4% only. The repayment period is up to 12 months, subject to the terms and conditions of the agreement.

5. Look Into Debt Consolidation Plans

All the leading banks in Singapore have a government-approved scheme available, known as a debt consolidation plan (DCP). Under this scheme, a financial institute or a bank will make payment for all your outstanding credit card debt, if you agree to make the payment in fixed installments.

You need to have heavy outstanding debt to be eligible for this. All your outstanding credit card amount should be at least more than 12 times your monthly income. All major banks offer DCP so you can maximize your chance by approaching them directly. Once approved, all your existing credit cards and accounts will have to be closed except one that would be within 1 time limit of your monthly salary to maintain your cash flow. The focus will now be only to pay the monthly installment on your DCP. You can simply start by finding their email address and writing to them.

You need to also know that once you have registered for this, all your other credit accounts will be non-operational. You will not be allowed to apply for any new credit card unless loans are for a specific purpose like medical, business, or education.

Staying out of debt doesn’t mean just clearing off your existing debts but also involves changing your spending habits. It won’t make sense if you would clear your existing debt and have a pile of them again at a later stage. If you can’t follow this then applying for DCP will only increase your financial problem.

6. Scale Back Your Lifestyle Drastically

This is a harsh truth but you will have to scale back your lifestyle drastically to make sure that you pay off your credit card debt on time. Of course, It would depend on your circumstances.

You can’t cut off the necessary expenses but as a general rule, you should do as much as possible without having your family feel pressurized under the debt. This means avoid traveling, shopping and eating out as much as possible. Avoiding small expenditures can certainly lead to saving that would help you recover the debt.

7. Negotiate With the Bank

There is always an option to discuss your financial situation with the bank to negotiate a repayment plan. By having a conversation with your back, it could be possible that they give you a more flexible plan. You could be benefited by a short payment hiatus or interest rates reduction as well. Make sure you do not get yourself marked as bankrupted or in debts in Singapore at any point, it will impact your credit file in the future.

 

When you are not able to repay a loan, even the bank will not get to earn the interest which practically you are not giving them any money. So, though they want you to pay the interest they would also want you to be able to do it. They will speak to you about your plan and would make negotiations accordingly.

 

Also, remember that more the number of credit cards you have more will be the number of bills to pay. You will also have to take care of the balance sheet of another account. So, try reducing them to 2 so that you get the maximum gain as it will give you a good cashback rate and earn more miles rate.

 

There is always an option where you can get help from, like that from a credit card counselor. Credit counseling Singapore (CCS Singapore) is not expensive and you can get a lot of help with managing your credit debt. They make sure that your personal information is not shared with anyone else. They provide you with expert advice and get you connected to the resources that would help you in becoming debt-free.

 

There are a lot of companies that can help you take loans and counsel you with the best available options. With such companies, taking a loan becomes a lot simpler and they also inform you on how to apply for urgent loans.

 

To become debt-free will take some months to some years. It may not be possible to get rid of it at once but following these simple steps will help you get free while having less stress and buying more time. So once you have worked out on these steps, live your life to the best, making sure that you celebrate the success of your progress.

Debt Consolidation Plan: What is It & How Does It Work

Introduction

Debt and loans have become an important part of the lives of people in Singapore. With this, a lot of Singaporeans are having problems ensuring that they pay off their debt and personal loan regularly. There is no shame in accepting the fact that we all need help in managing our debts. For people who have been having trouble paying off their debt from credit card charges or personal loan fees, there is a way to help you pay your debts easier. This mechanism is the so-called Debt Consolidation Plan. This article talks about this consolidation plan that could make the lives of people better and easier.

What is a Debt Consolidation Plan?

Debt Consolidation Plan, otherwise known as a DCP, refers to the process of combining together different unsecured loans into one larger loan, thereby giving the debtor better payoff terms. This consolidation plan particularly works for individuals who have multiple smaller loans and who are finding it difficult to pay off these debts. As a rule of thumb, DCP is for individuals who have an outstanding debt more than 12 times their monthly salary.

On many occasions, debtors owing a large sum of money fail to pay their monthly loan payments and fees. As a result, they find themselves drowning in debt and in a loan. Through Debt Consolidation Plans, debtors will be able to buy time in paying their debts and loan. Instead of paying off multiple debts in a month, they will only pay a single loan because all the debts have been consolidated.

Also, a Debt Consolidation Plan is meant for people who are being charged with a high interest rate by the multiple credit card companies and loan institutions they owe money from. Without a consolidation plan, these debtors are being charged with interest rates so high. In many cases, the monthly income of these debtors is not even enough to pay for these high interest rate debts. These individuals need help in paying the exorbitant loan fees.

A lot of Singaporeans apply for a DBC because their regular loan charges a higher interest rate compared to the interest rate of the DBC loan. Given this difference in the interest rate, people are somehow saving money with their DBC compared to the type of loan they have. Aside from the interest rate, DBC also offers a friendlier loan tenure. This means that people are given a longer period of time to pay for their loans.

To know more about Debt Consolidation Plans in Singapore, it is better to research more about the topic. You can visit financial sites to know more about the loan tenure of these credit facilities. Also, ask your own bank to know whether they have an existing debt consolidation policy in place. Check the terms and conditions that these banks offer in order to make sure that you are qualified for a Debt Consolidation Plan.

Moneylender Agent

How Does a Debt Consolidation Plan Work?

You might wonder how the Debt Consolidation Plan works. First, keep in mind that DCP is particularly helpful for individuals who are having difficulty paying off their personal loans and credit card charges. For example, you owe $10,000 to three credit cards with 25% p.a. eir. Each of these credit cards charges you $300 each month. This means that you have to pay a total of $900 of debt for each month in the next three years or so of your loan tenure.

When you have applied for a Debt Consolidation Plan, you can combine your debt to these three credit cards into one debt. You will be charged a monthly payment of $500 per month, which you will pay for the next five years of your loan tenure. This arrangement buys you more time to save as you are basically extending your loan tenure. You are basically extending your loan tenure, which means that you can use your money for your other pressing needs.

Moreover, the effective interest rate of debt consolidation plans is lower than the effective interest rate of credit card companies. The trick here is to compare the interest rates as well as the terms and conditions set by financial institutions in order to make sure that you have the best Debt Consolidation Plan. You can also try to look for financial institutions that waive DCP processing fee.

DCP does not only benefit debtors. This arrangement also gives assurance to credit facilities that they collect their payments. Debt Consolidation Plans somehow make sure that debtors are capable of paying off their debts instead of just running away from them. Unsecured loans have higher interest rates compared to secured loans. Hence, it is important for the government and the credit facilities to alleviate the difficulty of debtors in paying their unsecured credit.

Consolidated debt is beneficial for everyone in the financial market. It provides lower interest rates. Also, it ensures that your monthly income is sufficient for you and your family’s needs. An unpaid personal loan and unsecured credit could hurt the economy. Consolidate debt so you can contribute to making the economy of Singapore more stable.

How Much Can You Borrow from a Debt Consolidation Plan?

When you apply for a Debt Consolidation Plan, your debt is not paid or erased. It just means that your debt is spread in a longer period of time and at times. Also, you are given a lower interest rate compared to the interest rate from your non-DCP loans. When you apply for a Debt Consolidation Plan in banks, they will give you a DCP amount equivalent to the outstanding balance you owe. In cases where the DCP amount approved by your bank is not enough to pay your outstanding loans, you will have to balance and pay directly to the credit facilities where you owe the money.

In some cases, banks can provide debtors with a 5% allowance on top of the DCP amount. This allowance will be paid directly to the credit facilities where the debtor owes the money. Banks also waive the DCP processing fee. You can also negotiate with them about the loan tenure that works for you best. It is important to research whether your bank has this kind of deal.

Also, a Debt Consolidation Plan does not mean that you are acquiring new debt. It just means collating together the debts that you already have. To know the exact amount you are borrowing, contact banks, so you know the exact interest rate that comes along your Debt Consolidation Plan. Also, these banks apply different fees for their DBC. It’s better to ask them these loan details so you may nee the fees you are being charged with.

husband and wife looking at laptop

Who Qualifies for a Debt Consolidation Plan in Singapore?

Debt Consolidation Plan in Singapore is a government-approved program meant to combine unsecured credit and loans. This means that secured loans are not covered in this plan. DBC is essential, especially at times of financial crises, because it helps Singaporeans deal with their debt problems. It is important to remember, though, that not everyone can apply for a Debt Consolidation Plan. In order to apply for a DCP, you must qualify for these requirements.

First, you must be a Singapore Citizen or a Permanent Resident. Only those with either of these statuses are allowed to apply for a Debt Consolidation Plan.

Second, you must be an employee earning between $20,000 and $120,000 a year, or the total of your personal asset should not exceed $2 million. If you are earning higher than this or own a high amount of personal assets, DBC might not be the best option for you.

Third, the total of your interest-bearing unsecured credit on all of your credit cards and other loans from unsecured credit facilities should be more than 12 times your monthly income. Debt Consolidation Plan is only applicable to unsecured credit and loans. This includes loans where a debtor did not present collateral when he/she applied for a loan.

Be sure that you qualify for these requirements before applying for a Debt Consolidation Plan. You can consult your banks or the credit facilities you trust to check whether you are eligible for debt consolidation. Also, you can do preliminary research online to help you better understand these requirements. Try to find a reasonable loan tenure under your Debt Consolidation Plan so that you have enough time to save for your fees and other charges.

Where Can I Get a Debt Consolidation Plan in Singapore?

When you are sure that you are eligible for a Debt Consolidation Plan, you can go to certain financial institutions in the country that could help you. Just submit your application to them alongside the processing fee (or in some banks, the processing fee is waived). Afterward, wait for their decision to know that your application is approved.

Currently, Debt Consolidation Plans are available to 14 participating financial institutions (FI) in Singapore. These FIs are the following: American Express International, Inc., Bank of China Limited Singapore, CIMB Bank Berhad, Citibank Singapore Limited, DBS Bank Ltd., Diners Club Pte Ltd., HL Bank, HSBC Bank (Singapore) Limited, Industrial and Commercial Bank of China Limited, Maybank Singapore Limited, Oversea-Chinese Banking Corporation Limited, RHB Bank Berhad, Standard Chartered Bank (Singapore) Limited, and United Overseas Bank Limited.

These financial institutions are helpful for those looking for a Debt Consolidation Plan. Some of them would waive the processing fee of your application. It is best to approach them in order to know the exact p.a. eir charges and interest rate fees. These banks have different policies, which means you have to find the one plan that fits your needs.

For some, applying for a Debt Consolidation Plan can be scary. Debts consolidation may seem like a complicated process. There are too many details to understand and follow. If you are having difficulty absorbing all the information written above, it is better to consult experts who could help you. Try comparing different consolidation plans on the Loan Advisor website before choosing which plan works best for you. They can also help you find the FI, which has the least interest rate.

A man meet with the clients

Things to Remember Before Getting a Debt Consolidation Plan

The first thing in solving your debt and loan problems is to accept that you need help in managing them. It is true that the increasing interest rate of our loans are making it hard for us to pay them. Debt consolidation is one helpful way for you to be able to pay off your loan. Without learning how to manage your personal loan unsecured credit and other types of debt, the fees you are paying will continue to increase. Consolidate your debt as soon as you can in order for your begin making your financial life easier.

Without a Debt Consolidation Plan, a lot of Singaporeans are charged with high fees and interest rates by credit facilities. Their monthly income is simply not enough to pay for the unsecured credit they made in the past. Also, the loan tenure they are given by the credit companies is too short. As a result, they are missing payments to their personal loan and credit card charges.

There are small differences when it comes to a debt consolidation plan. For example, p.a. eir rates are different. Hence, it is better to talk to representatives of any financial institutions (FIs) mentioned above to make sure that you are getting the lowest p.a. eir and fees when it comes to paying off your loan. These FIs will be more than willing to guide and to inform you which loan consolidation plan has the lowest interest rate.

Another way to prepare before applying for a DCP is to consult websites that are knowledgeable ton the topics of loan, fees, credit cards, a personal loan, interest rate, and other financial topics. 365 Credit Solutions is one great website that has so many materials in helping you select the best consolidation plan. They can also teach you information about your other loan questions and clarifications.

How To Find The Best Clementi Money Lender In Your Area

Finding a good money lender in Singapore that will not try to lead you into a debt trap is hard, but it is not impossible. In this article, we will guide you on how you can find the best money lender that is best for you.

It doesn’t matter if you are looking for a moneylender in Clementi or anywhere else, this guide is applicable for you as long as you are located in Singapore.

Before we dive in, let’s briefly discuss the characteristics of a good moneylender first.

 

What constitutes a good money lender?

Before we go on our guide on how to find a good money lender, you must be aware of their characteristics first. A trustworthy money lender has got the required licenses and qualifications to provide service and deliver loan products within their area.

A reputable loan provider should offer fair terms and conditions on the loan in addition to providing an alternate settlement system for their customers who have trouble paying.

Getting a loan from a reliable money lender is essential for people in search of loan money, especially if their loan purpose is due to an emergency, for business investment, or other acceptable reasons.

 

Money Lending

 

Another important factor that money lenders should have is their level of experience. The length in years that a lending provider is operating can give you some insights on whether you will get quality service or not.

Keep in mind that when analyzing the experience of a loan company, you must also keep an eye on the way in which they are giving services to their clients. This can be effectively gauge by looking at online reviews by past clients, which will be discussed later in this article.

Now that you know a few basics in what to expect from a good money lender, let’s move on to our guide on finding one.

To assist you in your quest to locate a reliable and trustworthy money lender doing business in Singapore, be sure to read our tips and suggestions below:

 

Man is checking a document

 

  1. Verify the licenses and permits of the money lender

Before you start filling up an application, be sure that you are dealing with a licensed moneylender first. Check if the moneylender has the necessary permits to operate.

If the moneylender you want to get a loan from has a website, confirm the validity of what they claim to be on the internet.

Also, you must check if they are listed in the government database of licensed money lenders. This topic will be discussed in depth later in this article.

  1. Check with your family members and close friends

If you have family members and friends living in the same area as you do, chances are high that some of them have experienced getting a loan from a local lending company.

With this, you will be able to call for suggestions about the money lenders that they have good experiences from, and the type of loan that they already took.

Your family and friends will provide you with genuinely reliable suggestions, in addition to warnings regarding money lenders that are not good to take a loan from.

If you do not have family members or friends who can help you, you can also try reaching your co-workers and business partners. With such a broad network of people to ask from, you will surely get a good suggestion in no time.

 

reliable money lender

 

  1. Carry out research on the internet

After consulting with your family and friends, the next step you must do is to check out the web. You will find a variety of information and facts on money lenders in Singapore on the internet that will allow you to make a decision.

By looking on the internet, you will be capable of getting more info on loan selections, repayments, company details and other stuff that may be beneficial in figuring out if the loan company you want to take out a loan from carries a good standing or not.

A good source of information about the lenders is by looking at their reviews, ratings, and discussions about the loan company and their loan products on community forums. By reading the moneylender reviews and forum discussions, you can have a general idea of how the lender operates.

Additionally, you will learn about the experience of those who have already taken a loan from them, which will provide you with valuable information. If you see a lot of complaints or rants in the forums, or a lot of low ratings, find out why people are giving such reactions.

Generally, you will want to avoid companies with low reviews online. By diligently going through online reviews and internet forums, you will become aware of how good or how bad a loan company is without having to deal with them yourself, saving you a lot of time (and money).

  1. Take a look at government databases for certified money lenders in Singapore

Moneylenders act has given way for a government-maintained listing that contains the record of every certified money lending establishments in Singapore that has received their license from the Ministry of Law.

As such, money lenders that are not indexed by that directory are not licensed and are not considered to be legit. If you cannot find the moneylender you are eyeing in the government database, do not take out a loan from them as they are not probably licensed.

By getting your loan from a reliable and trustworthy money lender in Singapore, you will guarantee that you deal with proper procedures without any stress when it comes to repayment conditions and other related agreements.

Final Thought 

A guide on finding the best moneylender would not be complete without our own suggestion. One of our recommendations is 365 Credit, a licensed money lender in Singapore. Get in touch with 365 Credit Solutions today! Just submit your inquiry and we will contact you on how to apply for a quick and hassle-free loan.

Ready to Apply?

Fill up this form and we will get back to you within 3 working hours. It’s easy.

Privacy3