UOB's debt consolidation plan is best viewed as an expensive alternative to other plans because the bank advertises interest rates that are higher than those of its competitors. Borrowers that have not previously used UOB's services are eligible for slightly better rates; but it is unclear what rates these borrowers will receive in reality, due to vague wording on UOB's website.
|Summary of UOB's Debt Consolidation Loan|
|Limited loan tenures: 1 - 6 years|
|Processing Fee: Unknown|
|Promotion: Flat interest rates as low as 4.5% for new UOB customers, 4.99% for existing customers|
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What Makes UOB's Debt Consolidation Plans Stand Out to Borrowers
UOB advertises interest rates "as low as" 4.5% for new customers and 4.99% for existing UOB customers. This wording does not provide a guarantee, making it unclear whether or not any given borrower will receive these rates. Additionally, some of the bank's competitors offer better rates than UOB's lowest advertised rates. For example, HSBC guarantees flat rates of 4% for loans of 1 to 7 years and CIMB offers rates "as low as 2.77%". Also, because UOB does not disclose any processing or annual fees it is difficult to estimate its effective interest rates.
For individuals that are able to secure UOB's lowest debt consolidation loan rates, especially new UOB customers, this lender could be a decent backup option. However, the uncertainty surrounding UOB's effective interest rates and processing fees should be concerning to prospective borrowers. Another disadvantage of UOB's debt consolidation plans is the limited loan duration length of 1 to 6 years; many competitors offer loans of up to 8 or 10 years.
Who Can Apply: Eligibility Criteria
Singaporeans and permanent residents with incomes of at least S$30,000 and less than S$120,000 are eligible for UOB's debt consolidation plan. Applicants must also have balance to income (BTI) ratios of at least 12 times their monthly income.
Other Charges and Fees
UOB does not clearly state on its website whether it charges service or annual fees. That being said, it does charge an early settlement fee of 5% or S$200, whichever is greater. UOB also charges a S$90 fee for late repayments. This is similar to fees charged by other banks. We recommend that borrowers make on-time payments to minimise the total cost of their loan.
|Early Settlement Fee||5% on outstanding amount or S$200, whichever is higher|
How to Apply: Application Process
Applicants must complete an online application and provide contact, employment and personal debt information. Salaried applicants must provide their latest computerised payslip and self-employed applicants must provide their latest income tax notice assessment. Applicants must also provide confirmation letters showing unbilled balances for any unsecured credit instalment plans.
- Photocopy NRIC (front & back)
- Latest credit bureau report
- Income documentation
- Latest credit card & credit line statements with outstanding balances