Best Low Interest Personal Loans For Debt Consolidation – By consolidating your high interest rate debts into a lower rate with a debt consolidation plan, you can manage and eliminate your debt over several years. Debt consolidation loans typically come with a one-time processing fee, a fixed interest rate, and a term of 1 to 10 years. The key is to find low interest rates and fees while keeping your monthly payments at a reasonable level. However, you also need to be careful as some banks advertise rates as “as low as X%”, suggesting you may be offered a higher rate than you expect.
This is why deals are the best moneylenders in Singapore to get debt consolidation loans for low income borrowers.
Best Low Interest Personal Loans For Debt Consolidation
If you are unable to consolidate your loan with a bank, you may need to go to another licensed moneylender. Lendela helps borrowers by allowing them to compare customized consolidation offers. It is also a good option for those with low income, as it only pays S$1,200 monthly Finally, most Lendela applicants receive more than 1 loan offer on the same day.
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This is why HSBC’s debt consolidation plan is the best debt consolidation loan in Singapore for large and long-term plans.
HSBC debt consolidation loans are the best offer on the market for borrowers seeking large or long-term debt consolidation plans. This is because HSBC charges a low interest rate (of 3.4% per annum), as well as waiving its processing fees. For example, for loan tenures of 1-10 years, it charges a flat rate of just 3.4%, which is cheaper than the average rate.
People looking for the most affordable financial products often look for promotional offers. In this section, we highlight the best promotions available for debt consolidation plan applicants
Consider this if you are offered one of their lowest rates and cannot secure financing elsewhere
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Maybank debt consolidation loans are worth considering because of the promotional interest rates and cashback promotions. The bank is currently offering a low 3.88% per annum. In addition to offering promotional interest rates, Maybank is also offering a 5% cashback promotion to new DCP customers. So, if you prefer a cashback promotion, Maybank is a good choice.
If you are looking to refinance your existing debt consolidation loan, we recommend that you consider refinancing with a lender that offers cashback promotions. Currently, these banks offer competitive cashback rates for refinancing to DCP borrowers. Ultimately, it’s best to go with the lender that offers you the least expensive deal in terms of total cost. For example, banks will offer different interest rates depending on your credit history. You should also consider the impact of fees.
CIMB debt consolidation plan comes with the lowest fixed interest rate of 2.77%. However, it does charge a one-time processing fee of 1%, which makes it a little less competitive than other debt consolidation plans. Not only that, you should remember that CIMB rates are not guaranteed for all borrowers. CIMB’s exact language is “interest rates as low as 2.77%,” and your approved interest rate may be significantly higher than the published rate depending on your credit score.
Apart from the options we mentioned above, we also considered all the debt consolidation plans offered by all the major banks in Singapore. In total, we reviewed Bank of China, Citibank, Maybank, HSBC, Standard Chartered, CIMB, POSB and DBS, OCBC and UOB. Banks that did not win the above awards charge higher effective interest rates, less flexible loan terms, higher processing fees and, in most cases, do not guarantee their rates.
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Comparing debt consolidation loans should be a relatively simple process. First, borrowers need to decide how long they will need to repay the loan. Debt consolidation loans range from 1 to 10 years, although not all lenders offer 8 to 10 year loans. 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’s important to review the terms of each loan carefully.
To qualify for a Debt Consolidation Scheme (DCP), borrowers must be Singapore citizens or permanent residents, with an annual income between S$20,000 and S$120,000. That said, all the banks in our review require applicants to earn at least S$30,000 annually. In addition, eligible DCP borrowers may not have net assets of more than S$2 million. Eligible applicants must have unsecured interest-bearing credit card debt and unsecured credit facilities that exceed 12 times their monthly income. Examples of debts that cannot be consolidated with DCP include joint and renewal accounts, medical, business and education loans. Finally, those with a debt consolidation plan can refinance their existing DCP 3 months after approval.
Debt consolidation plans are special loans that help consolidate multiple debts under one scheduled payment plan, usually at a more favorable interest rate. Having said that, it is essentially a personal loan. So even if you are not eligible due to citizenship or other underwriting requirements, you can still apply for traditional personal loans offered by Singapore banks.
First, compare different personal loans and apply for the one that best suits your needs among the best personal loans in Singapore. Once your personal loan is paid off, pay off your remaining debt (ie credit card debt) immediately and avoid spending it on other expenses. You have effectively transferred your loan to a different loan under a different rate plan. Make sure you make timely payments and avoid taking on more debt.
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Can I apply for a debt consolidation plan with a bank where I am not currently a customer?
Yes. Therefore, debt consolidation plans are different from other personal financial products such as credit cards or loans.
No Debt consolidation plans cannot be used to pay off the remaining balance of an education loan, renovation loan, medical loan, business finance, or debt owed under a joint account. Because of this limitation, DCPs are not restricted by the same borrowing limits as other financial products.
As with any credit facility, your credit bureau report will include your debt consolidation loan. However, if you make timely payments on the DCP and all your other debts, your credit score will not be affected. We recommend that you make at least the minimum monthly payments on your other accounts until your debt consolidation plan is approved.
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Stephen Lee is a Senior Research Analyst, Insurance Specialist. He holds a Bachelor of Arts degree in International Studies from the University of Washington and his previous work experience includes risk management and underwriting for professional liability and specialty insurance at Victor Insurance. In addition, Stephen is a former US Peace Corps Volunteer in Myanmar (serving 2018-2020), where he continues to provide business development consulting services to HR companies in the Asia Pacific.
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We try to have the most up-to-date information on our website, but customers should check with the relevant financial institution if they have any questions, including eligibility to buy financial products. Not to be involved or engaged in the distribution or sale of any financial product or to be construed as assuming any risk or accepting any liability in relation to any financial product. The Website does not review or include all companies or all products available. The table shows the lowest advertised interest rate; Interest rates vary for different tenures and/or smaller loan amounts. See below for more details.
Below, we show the total cost for all personal loans in Singapore. Our chart assumes a 3-year S$10,000 loan for a borrower who makes at least S$30,000 a year. For a loan of this size, you should expect to pay anywhere between S$1,000 and S$2,500 in fees and interest. These costs do not include late or early payment fees, which we generally advise against.
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Lendela is a great option for individuals who do not qualify for personal loans from banks. For example, Lendela offers potential borrowers a comparison of the best personal loans from moneylenders based on the borrower’s credit score. In addition, Lendela has a low income requirement (S$1,200 monthly) and most applicants receive more than 1 loan offer on the same day. In this way, the platform is a great option for those who cannot get a bank loan.
HSBC personal loans usually charge the lowest effective interest rates in the market (from 7.5% EIR).
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