In this article, we will share 5 ways to settle debts in Singapore. These 5 ways or solutions would be debts from credit cards, licensed money-lenders, hire purchases and others.
Being in debts can be a stressful moment not just for you and your loved ones. You are constantly worrying about finding the best solution or way out to overcome all these challenges.
That is why Debt Aid existed, to provide you with an unbiased solution to overcoming your debts.
We hope this article and videos would be helpful and to share with you that there is assistance available for those who are struggling and wish to be debt-free. Do remember that there is HOPE.
Let us get started on the first solution on ways to settle debts in Singapore.
First Solution – Settlement
We have clients who seek advice on whether they should sell-off their HDB property in order to settle all their outstanding loans. They intend to clear their debts from their sales proceed.
The reality is, do you think it will be worthwhile for you to downgrade your property? Will it cause inconvenience to your loved ones?
Another way many have tried to settle their debts is by approaching family members and friends. The truth is there are not many people out there who are willing to loan you say $70,000.
While this method may not be a feasible solution for you, let us go to the next solution.
Second Solution – Credit Counselling Singapore
Credit Counselling Singapore or CCS is a non-government-link organization. Banks would refer clients to contact CCS for assistance if they are having challenges in settling their credit card loans.
In order, to get assistance from CCS you would need to attend a compulsory Info Talk on debt management. Only after you have attended the talk, should you wish to seek further assistance then you are able to submit your request for the counselling appointment.
After the session, if they find that you are suitable for their plan, then they will offer you a monthly payment scheme at a fixed interest which they can even stretch from 5-10 years. All these are determined by your income and expenses.
Do take note that if you owe several banks, you will still need to pay the banks individually and it will not be consolidated.
In the next solution, we will share another plan that enables you to consolidate all your credit card loans into one.
Third Solution – Debt Consolidation Plan (DCP)
Debt Consolidation Plan (DCP) was launched on the 23rd of January 2017. So how does DCP work and how it can benefit you?
DCP is able to assist you if you have mainly unsecured credit facilities mainly credit cards. In a nutshell, how this work is that you can apply for DCP under the 14 registered banks in Singapore.
You have credit card loans from Bank A and Bank B. You can either go to any of those banks you owe or apply from any of the 14 registered banks.
What they would do is consolidate all your owing into one, meaning you will just pay to one bank.
Let’s say you owe Bank A $15,000 and Bank B $20,000 which is a combined total of $35,000. You then apply for DCP under Bank C.
Bank C will then “help” to settle your outstanding loans of $35,000 to Bank A and Bank B. After which you will just have to pay Bank C.
In a way, this is like applying for a new unsecured credit facility or credit card from an existing or new bank.
The DCP amount is equivalent to the total outstanding balance – including interest and any other fees and/or charges accruing on your statemented accounts – plus an additional ‚ ≤5% allowance over and above the total DCP amount for your first DCP loan.
The question now is, what if you have other owing other than banks? For example, licensed money-lender and even hire purchase?
In the next solution, we will share a plan where you are able to consolidate all debts regardless of the types of loan.
Fourth Solution – Debt Repayment Scheme
Debt Repayment Scheme or DRS is a scheme administered by the government. Basically, this scheme will enable you to consolidate all your owing into one.
Owing will include your credit cards, banks, licensed money lenders, hire purchases and other loans. Generally, most of the unsecured debts and in total the total loan must not exceed $100,000.
The maximum repayment period for DRS is not more than 5 years. Meaning you will be released from your debts after that period!
Your monthly repayment will depend on your income and expenditure.
It is IMPORTANT to take note that DRS is NOT AN EASY WAY OUT to settling your debts. There are many debt consultants out there who would push for DRS however, not everyone is eligible.
These consultants will also go as far as mentioning that the repayment would be with ZERO percent interest and some may even have a discount of up to 40% off their total loans.
These claims are NOT NECESSARY TRUE.
Every person that is applying is unique and not everyone will have the same result. As we mentioned, a lot will really depend on your income and expenditure and this is not something you can manipulate.
This is a life-changing decision and always seek the right advice. One way to know if the consultant has your interest at heart is if they DO NOT just push for DRS (that is where most of their commission comes from) and actually share all other possibilities with you.
Over at Debt Aid, we believe in laying out all options for you even if it means you do not engage our services. All we hope for while providing this FREE consultation is so that you could share the news with others that there are alternative solutions out there.
Fifth Solution – Bankruptcy
The dreaded and most feared word every debtor doesn’t want to hear is bankruptcy. Bankruptcy has a negative social stigma in our society.
What really is bankruptcy and can you be sued for bankruptcy?
Will your HDB property be repossessed?
Are you still able to go overseas?
The truth is, it is not that easy to be bankrupt in Singapore. Bankruptcy is always the last step that your creditor wants to do for you.
In order for a creditor to sue you for bankruptcy, you have to owe that creditor $15,000 and above.
In order to make you bankrupt, your total owing has to be above $100,000.
This means, for example, that you have a debt of $50,000. The creditor cannot make you bankrupt. Yes, they can sue you but as long as it is below $100,000 the court will then propose schemes like DRS for you depending on your paying capability.
Bankruptcy is always the last option but it is not the end of the world. In fact, bankruptcy has helped many start a brand new life altogether.
It is always important to know what your legal rights and not only hear from what friends or family members would say. That is why always seek help from the right sources.
Get Assistance Today
So those are the 5 solutions in Singapore to help you be on your way to a debt-free life. At this moment, you might be confused as to which plans or schemes would be the best for you.
That is why Debt Aid, provides a FREE private one-on-one consultation. In this session, all your information will be kept strictly confidential. We will sit down and analyze your current situation and will advise which will be the best way forward for you.
Each individual person we meet has a different situation and there is no one size fits all solution for everyone, that is why we would need to study your situation in detail. We take each session seriously as this will affect the life outcome of an individual.
Stop Worrying & Start Living!
What we can promise you is that you will leave the session with a SOLUTION and a PLAN to move forward.
Our goal is to get you back on your feet for the sake of not only you but your loved ones. We have stretched our helping hand, now it is your choice to grab hold of it. Together, we can start planning for a better future.
Do fill in the form below and we will get back to you soonest. We hope to be of service.