Why are Singaporeans Who Are Heavily in Debt Refusing to Seek Help?


Joanne Poh



Beneath Singapore’s glittery facade, many citizens secretly struggle with debt. Household debt levels are rising to the point where the authorities are sitting up and taking notice. MAS has rolled out tougher credit rules as well as a brand new Repayment Assistance Scheme (RAS) designed to help heavily indebted people out of a jam. But guess what, of the 32,000 people estimated to have unsecured debt of more than 24 times their monthly income, only 1,000 people applied.

This is pretty damn surprising, as people who sign up for the RAS actually benefit from a lower interest rate, which means they could be saving themselves a bit of money. Just why are Singaporeans not taking up the offer?


They want to roll the cash for another debt

Some Singaporeans just can’t seem to get it in their heads that when you’ve borrowed a large sum of money, it’s going to hurt to pay it back. Being unwilling to commit to fixed monthly repayments is one reason some Singaporeans have declined to sign up for the RAS. Instead, they intend to roll their debt by using money from one loan or credit card to pay off that from another. It doesn’t take a rocket scientist to tell you that doing this long-term doesn’t only fail to eliminate your debt, it actually makes your debt balloon faster than a malignant tumour as compounding interest piles up.



Credit Counselling Singapore needs to get a Facebook page or something, because many Singaporeans are still clueless that their new RAS scheme even exists. While banks have started sending out “invitations” to participate in the RAS to customers who need it, many people are clueless as to what it entails. To make matters worse, nobody wants to go out and ask other people if they’ve tried the RAS because it means a major loss of face. Which brings us to our next point….



“Face” means a great deal to Singaporeans, which also that means people facing financial difficulties, mental illnesses or even stress find it hard to reach out and ask for help. The result is that debt is often hidden not just from the public but also from friends and family. Signing up for the RAS might spark fears that a person’s financial situation could be found out at home or at work, so instead they just shove the letters from the bank into a drawer and hope the problem will go away by itself.


Fear of being found out at work

When you sign up as an employee at a new company, you’re often made to fill in a form declaring if you’ve been convicted of a crime or bankruptcy. While the whole idea of the RAS is to help you avoid bankruptcy, many people are nervous about disclosing their financial details to a third party for fear that their employers will somehow find out about their situation.

The hard truth is that if you file for bankruptcy your career progress is going to be severely hampered, since we have yet to hear of a bankrupt being giving a juicy promotion or pay raise. In addition, if you work in the finance industry, there’s a high chance you’ll be fired. On the other hand, none of this applies to taking part in the RAS. But people tend to think of having to go for credit counselling as being one step above bankruptcy, hence the anxiety.


They think they can pay off their debts on their own

If you can’t pay off your debts, you could be on the road to bankruptcy. But if you’re very sure you can handle things on your own starting from today, you might be able to haul yourself out of the pit you dug without the help of the RAS.

If you manage to pay off more than the minimum sum starting from this month, you might actually be in placed in a better situation than you would if you had gone through the RAS. Your credit score is likely to be hit harder and for a longer time if you go through the RAS, as opposed to if you start paying back more than the minimum sum this month. On the other hand, if there’s the slightest chance that you’ll default, go with the RAS, as bankruptcy comes with a whole set of hairy implications.

We will be diving deeper in to this topic with a follow up article soon so stay tuned!

What do you think can be done to encourage more people to sign up for the RAS? Tell us in the comments!

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Joanne Poh

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.

  • Julian Chow

    The hyperlinks in the first paragraph are pointing to the same 2013 article 🙂

  • Josh

    I think Singaporean know the debt matter. Also know how to manage it. Offering them RAS to me is only option if you facing job problem and business not doing well then is option go for RAS. But if I am confidence and know what I doing and owing the bank credit card is only temporary example I will only need 4 to 5 month to clear it why I need to go for RAS? Also don’t reflect good on me unless I am very certain my job is going retrench or my company is going to closedown. Then whatever my credit card will seek for RAS plan as the interest is pretty low!
    Then start build up instead of credit card or apply for debit card. And my credit card will be on RAS. In this case I could build up financial income toward financial institution.
    I think only for Singapore did not want to seek for help not only face. There is probably no private and confidential they worried their employer will discover. Example some Security officer who want to work in Cisco they need to get credit report to show no credit card or owing money they can get the job this just a example. So if you go into RAS means your boss will start worried you in debt and may not want to keep on the job especially if your job involve in money!
    But let think positive means there is less Singaporean need help means they can afford to owe the bank and confidence in paying min Sum and pay off later. Just like you buy a flat taking 35 year loan. But we all know unlikely nowadays you will keep paying till 35 years loan two thing will happen sell and buy a smallest house and pay off 50 percent loan means half interest pay off.
    So Please give Singaporean a choice if they choose to be what they want to be. The option for MAS as part of government you have done well looking after us. And make road for us to walk smoothly indirectly but if we choose to take little be of risk to gain or to fail is the decision make by ourselves can’t blame anyone since they authority have instructed the banking sectors to sent out all invitation. There is always willing buyer and willing seller!
    I done my best to give my comment.

  • Weiling

    I applied for RAS and regretted it.

    Now, instead of 1 payment to the bank, i have to make 2 payments to each bank – 1 for RAS account and 1 for minimum amount. In the end, my monthly repayment is much higher than my usual repayment.


    Standard chartered cc + loan
    Past minimum: $400/mth

    Now under RAS: $50 + MINIMUM PAYMENT $400 = $450/MTH

    I ended up with a higher repayment amount. How does this help?