Singaporean's with high levels of personal debt may find it helpful to use a debt consolidation loan to manage their debt. In that sense, HSBC offers the best debt consolidation plan (DCP) in Singapore. The plan offers the lowest guaranteed interest rates of any loan duration, making it the most affordable option for borrowers.
|Summary of HSBC's Debt Consolidation Loan|
|Lowest Guaranteed Interest Rates: 4% p.a. (1-7 years), 5.7% (8-10 years)|
|Loan tenure: 1 to 10 years|
|Processing Fee: S$88 or 1%, waived for online applications|
|Promotion: Processing fee waiver and S$100 cashback|
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What Makes HSBC's Debt Consolidation Plans Stand Out to Borrowers
HSBC offers the lowest guaranteed flat and effective interest rates for debt consolidation loans in Singapore. This makes it the best, and the most affordable, debt consolidation plan for Singaporean borrowers. Additionally, it is currently offering S$100 cashback and waiving its application fee for online applicants.
|Loan Duration (Years)||Annualised Flat Rate||Annualised Effective Rate|
|1 - 7||4.0%||7.5%|
|8 - 10||5.7%||10.0%|
While other lenders advertise lower rates than HSBC, they use vague language (e.g. "as low as") that indicates that borrowers may actually be offered substantially higher rates. For this reason, HSBC stands out as one of a few lenders that provides details regarding its interest rates. Additionally, it offers the lowest rates among banks that guarantee interest rates published online.
Who Can Apply: Eligibility Criteria
Singaporean citizens and permanent residents with incomes of between S$30,000 and S$120,000 are eligible for HSBC's debt consolidation loan. Applicants must also have a balance to income (BTI) ratio of at least 12 times their monthly income. Additionally, individuals participating in the RAS scheme are eligible for HSBC's debt consolidation plan.
Other Charges and Fees
In addition to the 1% processing fee, which is waived for online applicants, HSBC charges an early settlement fee of 5% of the redemption amount. It also charges a late fee of S$75 and charges an overdue interest fee of 2.5% plus the prevailing interest on the overdue amount. The S$75 late fee is the lowest charged by DCP lenders. That being said, we strongly advise borrowers to make timely repayments in order to minimise the total cost of their loans.
|Processing Fee||1% of approved loan amount (min. S$88), waived for online applications|
|Early Settlement Fee||5% of redemption amount|
|Overdue Interest Fee||2.5% plus prevailing interest on overdue amount|
How to Apply: Application Process
Applicants can apply online by filling out and submitting an application form. The form requires personal, employment, salary and financial information. Additionally, prospective borrowers must provide proof of identification, income, current debt and credit history. Applicants may also call HSBC or visit HSBC branches for assistance with the application.
For proof of income documents, salaried individuals must provide their most recent 3 months of computerised payslips, latest notice of assessment and latest month's computerised payslip or latest 6 months' CPF statements with latest month's computerised payslip/notice of assessment. Self-employed and commission-based employees must provide most recent 2 years' Notice of Assessment.
- Photocopy NRIC (front & back)
- Income documentation
- Credit Bureau Report
- Latest statements of applicant's existing unsecured credit facilities