Best Debt Consolidation Plans 2019

We've compared every debt consolidation plan available in Singapore to help borrowers find the most affordable way to control their debt. Our list of the best debt consolidation loans below highlights the most affordable and flexible plans available depending on your preferences on processing fee, interest expense and promotions.

Table of Contents

Our Top Picks for the Best Debt Consolidation Plans in Singapore

By combining your high interest rate loans into one lower rate with a debt consolidation plan, you can manage and eliminate your debt over several years. Debt consolidation loans usually come with a one-time processing fee, a flat interest rate, and a tenure of 1 to 10 years. The key is to find a low interest rate and fee while keeping your monthly payment at a reasonable level. However, you should be careful with some banks that advertise rates "as low as X%", because you may end up being offered higher rates than you expected.

This graph compares the effective interest rates of the best debt consolidation loan offer from each bank in Singapore

Best Debt Consolidation Plan in Singapore: HSBC Debt Consolidation Plan

Consider this if you prefer a plan with the lowest interest rate and no processing fee

Balance to Income Ratio More than 12x monthly income
Early Repayment Fee 5% of redemption amount
Late Payment Fee S$75
Processing Fee S$88 or 1%, waived for online applications
Promotions:
  • Processing fee waiver (S$88 or 1% of loan amount)

In our view, HSBC's debt consolidation loan is the best offering in the market because it offers the lowest interest rate, while also waiving its processing fee. For instance, for loan tenures of 1 to 7 years, it only charges a flat rate of 4%, compared to 5-6% being charged by other banks.

For longer tenures of 8 to 10 years, its rates are still the cheapest at 5.7% vs +6% of competitors. Not only that, the bank is currently waiving its processing fee (normally S$88 or 1% of loan amount).

Read our full review

HSBC Debt Consolidation LoanDetails
Processing FeeWaived
Flat Interest Rate 1-7 Years4.0%
Flat Interest Rate 8-10 Years5.7%
HSBC Debt Consolidation LoanDetails
Processing FeeWaived
Flat Interest Rate 1-7 Years4.0%
Flat Interest Rate 8-10 Years5.7%

Best Cashback Promotion: POSB & DBS Debt Consolidation Plan

Consider this if you are able to secure their lowest rates and prefer cashback promotions

Balance to Income Ratio More than 12x monthly income
Early Repayment Fee 5% on outstanding loan amount
Late Payment Fee S$90
Processing Fee S$99
Promotions:
  • 3% cashback on approved loan amount

POSB & DBS's debt consolidation loans are among the best available in Singapore. The banks are providing 3% cashback to approved borrowers, which is the best cashback promotion available. Also, POSB and DBS are advertising rates "as low as 3.98%" for tenures up to 8 years. This can actually work out well for some who can manage to secure these rates. However, since the wording is "as low as" 3.98%, you could end up paying an interest that is much higher. Finally, POSB & DBS charge a processing fee of S$99, which can inflate your final cost, though comparatively much smaller than the cash rebate.

Read our full review

POSB/DBS Debt Consolidation LoanDetails
Processing FeeS$99
Flat Interest Rate 1-8 YearsAs low as 3.98%
Promotion3% cashback based on approved loan amount
POSB/DBS Debt Consolidation LoanDetails
Processing FeeS$99
Flat Interest Rate 1-8 YearsAs low as 3.98%
Promotion3% cashback based on approved loan amount

Best Promotional Interest Rates: Maybank Debt Consolidation Plan (DCP)

Consider this if you are able to obtain the bank's lowest promotional interest rate

Balance to Income Ratio More than 12x monthly income
Early Repayment Fee 4% of outstanding balance or S$300, whichever is greater
Late Payment Fee 5% of the minimum monthly repayment or S$80, whichever is higher
Processing Fee N/A
Promotions:
  • Promotional interest rates as low as 3.88% p.a. (6.92% EIR)
  • S$388 cash rebate upon loan approval

Maybank's debt consolidation loan is also worth considering due to its promotional interest rate. The bank is currently offering promotional interest rates as low as 6.92% EIR (flat rate: 3.88% p.a.), which is the lowest advertised effective interest rate available in Singapore. Maybank is also offering a cashback promotion (S$388 upon approval). Applicants can easily apply by simply SMS messaging Maybank at 79898 with the following: < LCP_VP > < Name >.

Read our full review

Maybank Debt Consolidation LoanDetails
Processing FeeN/A
Flat RateAs low as 3.88%
Min EIR6.92%
Tenure1-10 Years
Maybank Debt Consolidation LoanDetails
Processing FeeN/A
Flat RateAs low as 3.88%
Min EIR6.92%
Tenure1-10 Years

Honorable Mention - Lowest Advertised Rates: CIMB Bank Debt Consolidation Plan

CIMB Debt Consolidation Plan
CIMB Debt Consolidation Plan

Consider this if you are offered a lower rate than at other banks or are unable to secure financing elsewhere

Balance to Income Ratio More than 12x monthly income
Early Repayment Fee 3% of outstanding principal amount or $250, whichever is greater
Late Payment Fee S$100
Processing Fee 1%

In terms of the lowest interest rate being advertised, CIMB's debt consolidation plan was the lowest at 2.77%, but unlike HSBC it charges a one time processing fee of 1%. Not only that, you should note that this rate is not guaranteed. CIMB's exact language is "interest rates are as low as 2.77%," and your approved interest rate can be materially higher than the published rate depending on your credit score.

Read our full review

CIMB Debt Consolidation LoanDetails
Processing Fee1%
Flat RateAs low as 2.77%
Min EIR7%
Tenure1-8 Years
CIMB Debt Consolidation LoanDetails
Processing Fee1%
Flat RateAs low as 2.77%
Min EIR7%
Tenure1-8 Years

Other Debt Consolidation Plans That We Considered

Besides the options that we mentioned above, we've considered all the debt consolidation plans offered by all major banks in Singapore. These include banks like Bank of China, Citibank, DBS, POSB, OCBC, Standard Chartered and UOB. Most importantly, these banks charge higher effective interest rates than the lenders highlighted above. Furthermore, these banks have less flexible loan terms (OCBC - 3-8 years), higher processing fees and, in most cases, do not guarantee their rates, unlike HSBC.

Standard CharteredUOBOCBCCiti
Processing FeeS$199UnknownN/AN/A
Flat Ratesfrom 3.98%from 4.5%4.5%from 5.7%
Min EIRfrom 7.70%from 8.22%8.06%from 10.5%
Tenure1-10 Years1-8 years3-8 years1-7 years

How to Compare Debt Consolidation Loans

Comparing debt consolidation loans should be a relatively straightforward process. First, borrowers will need to decide how long it will take to repay their debt. Debt consolidation loans tend to range from 1 to 10 years, though not all lenders offer loans of 8 to 10 years. Next, borrowers must consider the total cost of their debt consolidation plan. This includes interest rates, processing fees and any promotions. Not all lenders guarantee their advertised rates, so it is important to carefully review the terms and conditions of each loan.

Am I Eligible for a Debt Consolidation Plan?

In order to be eligible for a Debt Consolidation Plan (DCP), borrowers must be Singapore Citizens or Permanent Residents, with annual incomes between S$20,000 and S$120,000. With this said, all of the banks in our review require applicants to earn at least S$30,000 annually. Additionally, eligible DCP borrowers may not have net assets exceeding S$2 million. Eligible applicants must have interest-bearing non-secured debt on credit cards and unsecured credit facilities exceeding 12 times their monthly income. Examples of debt that cannot be consolidated with a DCP include joint accounts and renovation, medical, business and education loans. Finally, those with existing debt consolidation plans may refinance 3 months after the approval of their existing DCP.

DCP Eligibility Requirements

  • Singapore Citizen or Permanent Resident
  • Annual Income between S$20,000 and S$120,000
  • Net Personal Assets less than S$2 million
  • Total interest-bearing debt of more than 12 times monthly income
William Hofmann

William is a Senior Research Analyst at ValueChampion Singapore, focusing on banking and SMEs. He previously was an Economic Consultant at Industrial Economics Inc.

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