POSB and DBS are currently charging higher than average interest rates for their debt consolidation loans. The banks are currently advertising rates from 4.58%, which is materially more expensive than the rates of other lenders. However, both POSB and DBS are offering a cashback promotion of 3% of the approved debt consolidation loan amount for debt consolidation loan refinancing. Therefore, if you seek to refinance your existing DCP and are unable to obtain a better rate from another bank, POSB and DBS would be worth considering.
|Summary of POSB/DBS's Debt Consolidation Loans|
|Higher than average interest rates: 4.58% p.a. (from 8.22% EIR)|
|Loan tenure: 1 to 8 years|
|Processing Fee: S$99|
|Current Promotion: 3% cashback (refinancing only)|
Table of Contents
What Makes POSB/DBS Debt Consolidation Plans Stand Out to Borrowers
POSB and DBS do not offer the cheapest debt consolidation loans in Singapore. For example the banks charge flat interest rates from 4.58% (8.22-8.63% EIR), which is substantially higher than the rates of the cheapest debt consolidation plans. Therefore, the banks are not the best for those seeking to consolidating their outstanding loans.
It is worth noting that POSB and DBS are offering competitive debt consolidation loan promotions. This promotion provides cashback of 3% of the approved loan amount to refinancing applicants. This can result in material savings, especially for those with a significant amount of debt. This promotion makes POSB and DBS decent options for those that want to refinance their DCP but are unable to obtain a better rate elsewhere. Other features of the POSB and DBS debt consolidation plans include a single account for all existing loans, loan tenures of 1 - 8 years and a credit card for daily expenses. These are all very similar to other lenders' features.
Who Can Apply: Eligibility Criteria
Singaporeans and permanent residents ages 21 to 65 are eligible for debt consolidation plans from POSB and DBS. Eligible applicants must have annual incomes of at least S$30,000 and less than S$120,000. Lastly, borrowers must have balance to income (BTI) ratios of at least 12 times monthly income.
Other Charges and Fees
In addition to the S$99 processing fee, POSB and DBS charge late fees of S$90. With that said, we strongly recommend that you make on-time payments to avoid inflating the total cost of your debt consolidation plan.
|Early Settlement Fee||5% on outstanding loan amount at time of settlement|
How to Apply: Application Process
Applicants can apply submitting their information online and scheduling a call over the phone or by applying in person by visiting their nearest DBS or POSB branch. Prospective borrowers must provide personal identification, credit and income documents.
For required income documents, salaried individuals must provide latest income tax notice assessment for the past 12 months, their last 12 months CPF contribution history statement latest computerised payslip or have salary crediting into a DBS or POSB account. Commission based individuals must provide 2 last years of Income Tax Notice Assessments or last 12 months CPF contribution History Statement. Finally, borrowers that are self employed must provide last 2 years of Income Tax Notice Assessments.
- Photocopy of NRIC (front and back)
- Latest Credit Bureau report
- Income documents
- Proof of Outstanding Secured Facilities document