In 2017 alone, an average of 4000 Singaporeans hit unsecured debt levels that were 12 times their monthly income each month, with some accruing more. If you found yourself amongst those ranks, you may be struggling trying to make your bill payments, high interest charges and making debt repayments on time. If so, perhaps it’s time to consider applying for a consolidation loan. Here are a few things you’ll want to take note before jumping the gun and signing the contract.
What Are Consolidation Loans
A Consolidation loan is used to pay off several smaller loans with a much larger loan, and this is done by combining all your payments into a single large payment. What makes consolidation loans especially appealing is its interest rate. Its interest rate is considerably lower than ones offered for other loans, giving borrowers the much-needed advantage especially when they have to deal with an accumulated interest rate.
Moneylenders in Singapore provide debt consolidation loans as an accumulated financial solution that combines all your credit facilities like your credit cards, joint accounts, and renovation loans across various financial institutions through a sole management program.
The purpose of these loans is to help reduce your overall monthly payment by lowering your loan repayments and interest rates, therefore making it easier for you to pay off your debt, saving both money and time.
What To Note Before Applying For A Consolidation Loan
Always seek for trustworthy and licensed moneylenders. Fraudulent and unlicensed money lenders are always lurking around to defraud people through unfairly compounded and high-interest rates with numerous hidden fees. You’ll want to save yourself from the financial burden and unnecessary emotional and mental stress by dealing only with approved debt consolidation companies or established and licensed money lenders.
There have also been cases of online companies with scheming tactics to do away with your money right after payment. Such companies attract and entice people with incredibly low-interest rates and very high upfront fees. To avoid being a victim to these scams, you should always ensure you’re dealing with a moneylender that’s licensed by Singapore’s Ministry of Law Licensed Moneylender.
Debt Consolidation Plan
Introduced in 2017, the Debt Consolidation Plan (DCP) is designed specially for Singaporeans and Permanent Residents who have total interest-bearing debt on credit card facilities that are not secured with financial institutions. As mentioned, these unsecured debts are those that exceed 12 times of one’s monthly income. This loan can then be repaid for a period between a minimum of one year to a maximum of ten years.
Required documents for application for DCP
Following are the necessary documents needed if you wish to apply for a DCP.
• NRIC Copy (front and back)
• Latest income documents
• Latest credit bureau report
• Latest credit card and unsecured credit loan statements (online or physical)
• Confirmation letter evidencing unbilled principal balances for unsecured credit instalments plans
• Settlement notice from the original debt consolidation bank
Debt consolidation loans are excellent in aiding those who are facing significant financial debts but remember to conduct extensive research before committing to a debt consolidation loan. Here at Goldstar Credit, we are a trustworthy moneylender in Hougang who also provides the best financial advice to keep you on track. So, if you’re looking for a licensed moneylender for a debt consolidation, we got you covered.