Consolidation Loan Singapore – Dos and Don’ts of Debt Consolidation

A consolidation loan Singapore is a debt-relief option that untangles you from financial messes caused by multiple debt payments from various credit facilities with different interest rates and payment schedules. It can save you hundreds of dollars in interest expenses, especially if you’re paying off credit card debt. However, before you decide to apply for a debt consolidation plan in Singapore, do remember that you will still be liable for the outstanding balances on your existing unsecured credit facilities even when your application for a Debt Consolidation Plan has been approved.

As a result, it’s crucial to understand the dos and don’ts of debt consolidation before you start the journey toward achieving financial freedom. This comprehensive guide by Lendela will help you weigh the pros and cons of debt consolidation, as well as the eligibility criteria for a debt consolidation loan in SG.

How to Find the Right Consolidation Loan in Singapore for Your Needs

A Debt Consolidation Plan (DCP) is a scheme introduced by the Association of Banks in Singapore to assist Singaporeans and Permanent Residents who are juggling several high-interest debts and struggling to meet repayments. A DCP allows you to roll over your current loans, including unsecured debts such as credit cards and personal loans, into a single account with a lower interest rate.

The key to successfully navigating a DCP is establishing good credit discipline. Ensure that you take your monthly installments seriously and pay them on time. Missing payments can lead to expensive penalties and may cause your credit score to deteriorate further. It is also essential to avoid taking out new unsecured debts while you’re in a DCP as this can exacerbate your problems.