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Four easy steps to a debt consolidation loan in Singapore:
1. Apply with Lendela for a debt consolidation loan in Singapore
2. Receive offers from multiple banks
3. Compare offers and select online
4. Sign the agreement and get the money
Our goal is to make your loan application process quicker, simpler and more transparent. As Singapore’s only true personal loan comparison service, we support you all the way from application to disbursement. Click below to read more about Lendela and how we empower thousands of loan-seeking Singaporeans every month.
Learn all you need to know about debt consolidation in Singapore with our simple guide below. If you still have lingering questions about debt consolidation loans in Singapore or related services, feel free to reach out to us and let our experienced team help you.
When you have balances on several credit cards, paying them off can be a long and taxing process. It can seem like you’re not making much progress with repayments, especially if you are struggling with multiple bills from different banks.
Wouldn’t it be convenient if you could combine all your loans and pay one sum each month? That’s where debt consolidation can help.
Debt consolidation is where an individual acquires a new loan to pay out a number of smaller loans, bills, or debts that he or she is currently making payments for. This action helps the creditor effectively combine different loans together and turn them into one. It helps to minimise monthly payments by lowering the interest rate, thereby making your debts easier to pay. This process is referred to as “consolidating” the loan.
Most of us take out loans at one point in our lives or another to buy or invest in big purchases like cars, home renovation, vacations, or an education. If you have taken out multiple loans and mounted up credit card debts with varying amounts and various interest rates, the chances are that they cost you much more than what's necessary and are perhaps even pushing you onto the path of insolvency. A debt consolidation loan can be your ultimate lifeline here as it can help you lower and stabilise your debt.
When applying for a debt consolidation loan in Singapore, you are taking out a new personal loan to repay or cancel out the current unsecured debts. It usually involves pooling together all existing debts and summing them into a single debt with more convenient terms such as lower interest rates. Individuals can leverage debt consolidation as a means of cushioning the burden of credit card or student loan debt, for instance.
Here’s an example to illustrate: An individual has multiple loans and is forced to make payments of $1,000/month for his/her total loan debt. Apart from the actual loan costs, there might be various additional fees for each loan that has to be paid monthly. Through an online application at Lendela, a bank or financial institution that offers debt consolidation loans can manage these deals for the individual. The bank then reduces the monthly payment rate of the borrower by asking him or her to repay i.e. $650/month for an extended time at a slightly increased interest rate. The debt consolidation not only results in a lower monthly cost and liberation from unnecessary high-interest rates for the borrower, but it also makes life easier for the borrower, who now only has to think about one single loan, loan terms, and fee.
Paying off your high-interest debts with a debt consolidation loan can allow you to enjoy the following benefits:
No more headaches battling numerous invoices and separate deadlines or fees. With debt consolidation, you only need to make one payment each month. This will allow you to stay alert and pay off debts quicker than usual. No more missing statements and contemplating which loans to pay first – just focus on one bill.
Consolidating your debts into one account will allow you to focus on other parts of your life and eliminate the stress that comes with juggling multiple debts and accounts.
Generally, credit cards have higher interest rates compared to other loans in the market. Another advantage of consolidating your debt with personal loans is that it allows you to get a lower interest rate, indirectly helping you save money on each monthly instalment.
If you’re paying your loan consistently, you can improve your credit score. Having multiple accounts and making late payments significantly hurts your credit score. By consolidating your debt into one account, you can more easily stay on top of your monthly payments and rebuild your credit.
Lendela makes debt consolidation in Singapore easier than ever before! You simply need to fill out a short online application, selecting debt consolidation as the purpose of your loan application. In minutes, your completed application will get sent to several banks and financial institutions. Upon reviewing your application, they will then look at different debt consolidation loan solutions for you and get back with their respective offer based on your individual circumstances. You can then compare your personalised debt consolidation loan options at a glance and select the option that best suits your needs.
When consolidating loans, you will need to sum up the total amount of all your debts to obtain the resulting balance that is your new overall debt. As the loan you’ll be taking will be used to pay this debt, it is immensely helpful for you to include all of your current outstanding loans or credits in your application. It will make your debt consolidation journey much easier and faster further down the line!
An unsecured debt or unsecured loan in Singapore is often referred to as a loan that is not asset-backed. The debts could come from medical and utility bills, bank cards, and other kinds of credits given without collateral required. For banks, debts of this kind are usually riskier, as the bank may have to enforce legal means in order to get the money back in cases where the borrower is unable to pay up.
Unsecured debts, be it private or business-related, can be burdensome to the borrower due to the large interest rates attached as a result of the high risk they constitute to banks. Borrowers may clear Unsecured debts by claiming bankruptcy, but employing this option greatly reduces the chances of them getting a future loan.
Banks initially contact their clients when the borrower is unable to repay a debt, after which other measures are employed when a repayment compromise cannot be reached. Taking the matter up to credit-reporting firms, transferring the debt to collection agencies, and prosecuting the borrower, are other alternatives banks may employ. A borrower may even be forced to repay the unsecured loan using necessary assets in the event of a court order. To prevent your debts from escalating to a point where you are unable to make the repayment, taking out a debt consolidation loan may be the best course of action.
Debt collection is the process of going after payments of debts that borrowers owe. For this, there are collection agencies that serve as collectors or representatives of the banks by collecting debts for a fee or a percentage of the full amount to be repaid (all about legal debt collectors in Singapore). The first contact from a collection agency is usually in the form of a notification, giving the borrower a chance to pay the debt. Legal action is taken only as a last resort. So prior to this, it is important for borrowers to try and negotiate payment in instalments with a debt consolidation loan.
An initial reminder to notify the defaulter of an overdue payment. Should the borrower ignore the initial call/reminder, the approach can be renewed through a follow-up reminder. Should these approaches fail to generate the desired outcomes, a final warning in the form of a letter or e-mail, stating the creditor’s intention to take advanced action, will be issued.
A bank can appoint a lawyer that is well-versed in corporate debt collection and can help the bank to retrieve the debt from the borrower. If at the end of a direct approach, the borrower doesn’t comply, then legal action may be taken against the borrower.
The law does not provide any guidelines as to how late payments should be handled. As such, terms for late payment should be discussed in the initial stage of taking out a loan. In addition, collection costs must be ratified and documented when the contract is negotiated. Although, they can sometimes be paid by the collector upon the request of the court.
The pursuance of borrowers for debt repayment can be time-consuming, duteous and expensive, especially for overseas creditors from other business climes. These are some common methods of debt recovery:
1. An inquiry that involves a business or individual search, physical address and direct visit as well as bankruptcy or credit to ascertain if the borrower can repay their debt
2. A document that shows recent statements of accounts to the defaulter
3. The amount of money being negotiated and the means of resolution with the consent of the creditor
4. Necessary court action if negotiations break down
Using a debt consolidation loan can be a viable and efficient way of paying off credit card debts due to the lower interest rates. Low-interest rates can help you to reduce the time taken to make repayments on the outstanding loan value and thereby enable you to service credit cards in more precise terms with a fixed, final date in view.