Are you looking for a debt consolidation plan? Debt consolidation is finding a huge prominence in Singapore. This is all because of the different advantages it offers. Let’s study the topic in detail.
CONSOLIDATION LOAN SINGAPORE
Debt consolidation came into existence in the year 2017 in Singapore. The main objective of the plan is to reduce the burden of individuals. This is a dance by combining all the unsecured loans of an individual into one loan. To do this, various financial institutions of Singapore offer different debt consolidation plans. The individuals can decide on the plan depending on their own requirements.
The debt consolidation plan is moving to the top priority list of individuals. Singapore fastest personal loan was at the top earlier, but now the pattern is changed. This is because the DCP has various advantages. A debt consolidation plan is a process of combining all the loans of an individual into a single loan. This is basically financing your existing secured loans by taking another loan. Most often, people assume that by opting for debt consolidation plans, they get rid of loans. But the only difference is the individual is opting for another loan to finance the existing loan. By doing this, he finances all his various unsecured loans by taking up one loan.
Once the existing multiple loans close, the new chapter of the debt consolidation plan starts. Under this, the individual is required to make the payment only for one loan with a single rate of interest, monthly. You are not required to run behind various multiple loans, as you did before. Under this system, you have to pay the loan amount only of the debt consolidation plan. The debt consolidation plan is a total sum of all the unsecured loans you once had. It is basically a combination of all the loans sum up in one loan.
ELIGIBILITY OF DEBT CONSOLIDATION PLAN
Though the consolidation loan Singapore might look easy, it is not that easy. Yes, there are various advantages of this plan, but with it comes the disadvantages also. Not everybody can qualify for a debt consolidation plan. The applying candidate should fulfill the terms and conditions of the debt consolidation plan
Debt consolidation loans have different criteria and eligibility. Without fulfilling these terms and conditions, an individual cannot qualify for the loan.
The individual applying for a debt consolidation plan should hold only unsecured loans. Secured loans do not stand valid under the system of the debt consolidation plan. You can apply for debt consolidation if you have an unsecured loan like a credit card loan. But if you have a secured loan like a property loan or a car loan, you cannot qualify for debt consolidation. The experts of the debt consolidation department verify your unsecured loans document it with keen analysis. You cannot be qualified for a debt consolidation plan if the experts reject your documents. Let’s study the eligibility and criteria to meet to fulfill those consolidation plans.
- To apply for a debt consolidation plan, your annual income should be a minimum of $30,000 and a maximum of $1,20,000 in Singapore.
- Your unsecured loan amount should be 12 times more than your salary.
- You have to be a permanent resident for the citizen of Singapore. This is because the plan is offered only to Singaporeans.
- The loan taken from various banks should only be unsecured loans. This is speakers secured loans do not stand valid under debt consolidation plans.
ADVANTAGES OF DEBT CONSOLIDATION PLAN
There are various advantages of a debt consolidation plan. Let’s study the advantages in detail.
SINGLE EMI: The main advantage of a debt consolidation plan is you are not required to pay multiple EMI is to multiple institutions. The multiple unsecured loans are club together into a single loan. Thus the payment you make to the bank is a single EMI. You are not required to break your head behind multiple EMIs of multiple institutions.
MONEY SAVER: Another advantage of a debt consolidation plan is you can save your money. The money you can save will be in terms of the interest rate. This is because the interest rate charged on a credit card is much higher than the interest rate charged on DCP.
The interest rate of a credit card varies between 20 to 30%. In comparison, the interest rate of the debt consolidation plan varies from 8 to 10% in Singapore. By doing this, you say a lot of money from interest. You can you this money later to make huge payments of debt consolidation plan to clear off the loan.
EFFICIENT MANAGEMENT OF DEBTS: The main advantage of a debt consolidation plan is to manage your debts efficiently. The debt consolidation plan comes to reduce your burden. The main work of a debt consolidation expert is to reduce all your debts into a single debt. You can easily manage your debt plan accordingly when you opt for a debt management plan; you are not required to pay multiple EMI in different interest rates. All you have to do is pay a single EMI with a single interest rate.
DISADVANTAGES OF DEBT CONSOLIDATION PLAN
DEBT FOR A DEBT: Many people think that when they opt for debt consolidation plans, they get rid of loans. This is not true. Debt consolidation is financing your existing loans to get a better deal. Debt consolidation is a page of all your existing on secured loans and stands as a single loan. This is again your loan in the sum of all the total unsecured loans. You have to pay back the cyclone to the financial institution within tenure with interest rate.
MORE EXPENSE ON INTEREST: Though it is said you can save interest money by opting debt consolidation, this is not true to a greater extent. The debt consolidation plan usually lasts for 7 to 10 years. And in this 7 to 10 years, you have to pay back the amount along with interest rate. Due to the long tenure of time, you tend to pay more amount on interest.
INSTABILITY IN PAYMENT: Many individuals fail to make a payment due to the instability of their financial resources. The loan last 7 – 10 years. Nobody has seen the future. Thus it is a little risky.