Debt Consolidation Plans in Singapore: What Are They, and How Do They Work?

Feeling like you’re juggling too many loans at once? You’re definitely not alone. As of Dec 2024, household debt in Singapore made up 51.9% of the country’s Nominal GDP—yep, that’s more than half of the economy’s output tied up in what we owe. While that’s a slight dip from the previous quarter (52.0%), it’s still a reminder that many of us are dealing with debt in one way or another.

Between credit card bills, personal loans, and maybe a few buy-now-pay-later “treat yourself” moments, it’s easy for things to snowball. That’s where Debt Consolidation Plans (DCPs) can help—think of them as a way to tidy up your debts into one manageable package.

In this guide, we’ll walk you through what DCPs are, how they work in Singapore, and whether they’re worth considering. No jargon, no scary math—just clear info to help you get back on track.

 

Guide to Debt Consolidation Plans in Singapore (2025)

1. So… what exactly is a Debt Consolidation Plan?
2. What happens when you take up a DCP?
3. What are the eligibility requirements for a DCP?
4. How to choose a debt consolidation plan in Singapore
5. Which financial institutions offer DCPs in Singapore?
6. Best debt consolidation plans in Singapore
7. Why your DCP loan amount includes a little extra
8. What if you don’t qualify for a debt consolidation plan?

 

1. So… what exactly is a Debt Consolidation Plan?

A Debt Consolidation Plan (DCP) is a simple way to roll all your unsecured debts—think credit cards, personal loans, and credit lines from different banks—into one single loan with just one bank. Instead of juggling multiple bills, you’ll only have one fixed monthly repayment to keep track of. The bank offering you the DCP will step in to pay off all your outstanding debts, and your existing unsecured accounts will usually be closed.

Sure, the total amount might look scary at first glance, but here’s the upside: DCPs usually charge way less interest than credit cards. While most credit cards slap you with rates around 27.9% p.a., DCPs in Singapore typically offer rates between 3% to 8% p.a. That means you save a good chunk of money in the long run, and the fixed repayment plan makes budgeting way easier.

 

2. What happens when you take up a DCP?

Once your DCP is approved, your new bank will handle the repayments to your other banks—so all you need to do is focus on repaying your DCP on time each month.

Here’s an example of how a DCP can lower the amount of interest you pay.

Let’s say you have multiple credit card debts totalling $50,000 at an average interest rate of 27.9%. If you repay $1,500 a month, you’d accumulate $13,389.79 in interest in just 1 year—and a whopping $35,311.86 over 3 years if you stick to that repayment plan.

Now let’s consider a parallel universe where you switched to a DCP with a 5% interest rate and a structured 3-year repayment plan. You pay $1,498.54 a month. If you stick to the plan, you’ll accumulate only $7,500 in interest over 3 years—and be completely debt-free by the end of the DCP term.

However, if the amount your DCP bank gives you isn’t enough to cover all your outstanding debts, you’ll need to top up the difference yourself to fully clear everything. It’s super important to check that everything is fully paid off to avoid any nasty surprises later.

What if you spot a better deal down the road? Good news—you can refinance your DCP, just like a home loan. Just be sure to check for any early settlement fees first. If you do decide to switch, you’ll need to request a settlement notice from your current DCP bank before moving your plan to a new one.

 

3. What are the eligibility requirements for a DCP?

Regardless of which financial institution you get your debt consolidation plan from, there are 3 basic eligibility requirements set in place by the Association of Banks in Singapore:

1) Citizenship

Debt consolidation plans are only for Singapore Citizens and Permanent Residents (PR).

2) Annual income

Your annual income must be between $20,000 and $120,000, and your net personal assets cannot be more than $2 million. Your net personal assets refer to your assets, like properties and shares, minus your liabilities, such as your mortgage and unpaid taxes.

Note that many banks have a minimum annual income requirement of $30,000. These include Citibank, DBS, Standard Chartered, and UOB.

3) Amount of debt

Finally, you also need to have enough debt to qualify. Specifically, your total outstanding unsecured debt needs to exceed 12 months’ of your salary.

• Debt consolidation plans are only for unsecured credit, meaning things like personal loans, personal line of credit, and credit cards. Secured loans like car loans and property loans, as well as need-specific loans like education, renovation or business loans, can’t be consolidated with a DCP.

If you don’t qualify for a DCP but are trying to manage various debts, don’t worry. There are alternatives you can consider—jump to the last section to find out more about them.

If you do qualify for a DCP and would benefit from taking one up, read on for how to choose the best DCP for you.

 

4. How to choose a debt consolidation plan in Singapore

Not all DCPs are created equal. To make sure you’re getting a deal that truly works for your financial situation, here are the key things to look out for:

Interest rates, fees and repayment terms

Most DCPs in Singapore offer interest rates between 3% and 8% p.a.—for example, Standard Chartered’s DCP is currently at 3.48% p.a. (Effective Interest Rate or EIR: 6.79% p.a.), while HSBC’s DCP is a 4.5% p.a. (EIR: 8% p.a.).

These are significantly lower than the rates charged by credit cards (often up to 27.9%!). That said, don’t focus on the rate alone—look out for processing fees and early repayment charges, which can vary by bank.

Also, consider the repayment period, which can stretch up to 10 years. This can help reduce your monthly payments, but a longer loan term means paying more interest over time.

Do a cost-benefit reality check

Before committing, do a quick comparison between your current debt obligations and the total cost of the DCP, including all interest and fees. A plan might look appealing upfront, but it’s the long-term savings that count. Crunch the numbers and make sure the DCP is going to help you.

For example, if the debt you’ve accumulated is mostly from personal loans at an average interest rate of 5%, and you’re looking at a DCP of around 5% too, c’mon. 

Compare DCPs carefully

With so many providers out there, it’s worth taking the time to compare your options. Use online tools to make it easier to find a DCP that matches your budget, goals, and timeline without getting overwhelmed. One tool you can use is MoneySmart’s DCP comparison platform, which lets you filter plans by interest rate, fees, and repayment terms.

 

5. Which financial institutions offer DCPs in Singapore?

According to The Association of Banks in Singapore, these are the 17 banks and other financial institutions in Singapore that you can take up a DCP from: 

1. American Express International, Inc.
2. Bank of China Limited Singapore
3. CIMB Bank Berhad
4. Citibank Singapore Limited
5. DBS Bank Ltd
6. Diners Club Singapore Pte Ltd
7. GXS Bank
8. HL Bank
9. HSBC Bank (Singapore) Limited
10. Industrial and Commercial Bank of China Limited
11. Maribank Singapore Private Limited
12. Maybank Singapore Limited
13. Oversea-Chinese Banking Corporation Limited
14. RHB Bank Berhad
15. Standard Chartered Bank (Singapore) Limited
16. Trust Bank
17. United Overseas Bank Limited

We compare the interest rates and fees of the major DCPs in the next section. 

 

6. Best debt consolidation plans in Singapore (2025)

DCP in Singapore	Interest rates from	Fees
Bank of China	6% p.a. (EIR: 7.48%)	– Processing fee: $600 – Late payment fee: S$100 or 2% of minimum payment whichever is higher – Full repayment penalty: 5% of outstanding balances or S$200 whichever is higher
CIMB	2.77% p.a. (EIR: 7% p.a.)	– One-time handling fee: 1% – Late payment fee: $100 – Early termination fee: 3% of outstanding principal amount or S$250, whichever is higher
Citibank	3.99% p.a. (EIR: 7.5% p.a.)	– Cancellation or prepayment fee: 5% or $100, whichever is higher – Partial prepayment is not allowed
DBS / POSB	3.58% p.a. (EIR: 6.95% p.a.)	– Processing fee: $99 – Early termination fee: 5% on the balance outstanding at point of termination – Late fee: $90
HL Bank	3.8% p.a. (EIR: 6.78% p.a.)	– Processing fee: 1.5% or $300, whichever is higher (may be waived upon approval) – Late fee: $80 – Early/full repayment fee: 3% of outstanding loan amount or $300, whichever is higher – Overdue/default interest: 5% p.a. plus HL Bank Prime Rate (current prime rate is at 5.75% p.a.). This is charged if you fail to make your monthly repayment.
HSBC	4.5% p.a. (EIR: 8.0% p.a.)	– Late payment fee: $120 – No partial repayment allowed – Full repayment penalty: 5% of the repayment amount
Maybank	3.48% p.a. (EIR 6.26% p.a.)	– Early redemption or prepayment fee: 5% or $800, whichever is higher – Late payment fee: 5% or $100, whichever is higher – Administrative fee to increase Debt Consolidation Loan Amount: 4% on the additional loan amount
OCBC	4.50% (EIR: 8.06% p.a.)	– Overdue interest: Monthly instalment amount plus 3% of outstanding late repayment charges or S$50, whichever is higher – Late repayment charges: $200 – Termination fee: 5% of outstanding loan amount – Over the counter payment/deposit: $25 per transaction
Standard Chartered	3.48% p.a. (EIR: 6.79% p.a.)	– One-time joining fee: $199 – Late payment fee: $100 – No partial repayment allowed – Full repayment penalty: $250 or 5% of the outstanding principal, whichever is higher
UOB	4.50% (EIR: 8.41% p.a.)	– Late payment fee: $90 – No partial repayment allowed – Full repayment penalty: Fixed Interest Rate offer with up to 6 years loan tenure: 5% of outstanding balance or S$200 (whichever is higher); or Fixed Interest Rate offer with 7 or 8 years loan tenure and all Tiered Interest Rate offer: 8% of outstanding balance or $300 (whichever is higher)

Note that in the table above, we:

• Excluded personal loans. These can also help to consolidate debt, but have different eligibility requirements. We’re focusing specifically on debt consolidation plans with requirements such as having debt that is over 12 times your monthly income.
• Are not comparing the DCPs’ eligibility requirements—these are standardised in Singapore.

 

7. Why your DCP loan amount includes a little extra

When you apply for a DCP, you might notice that the approved loan amount is slightly higher than your total debt. That’s because your DCP amount includes:

Total outstanding balances (including interest, fees, and charges) + up to 5% extra as a buffer.

Now, before you worry that the bank is trying to pull a fast one, that ≤5% allowance is actually mandatory for your first DCP loan—and it’s there for a good reason.

It covers any extra charges (like late interest or fees) that could pop up between the time your DCP is approved and when the funds are disbursed to your various lenders. Since that process isn’t instant, the buffer helps make sure your debts are fully cleared without you having to top up later.

Good news: any unused portion of that buffer will be refunded to you by your DCP bank. It’s not a sneaky fee—it’s just there to keep things smooth during the transition.

Also worth noting: if you refinance your DCP later on, this 5% buffer won’t apply the second time around.

 

8. What if you don’t qualify for a debt consolidation plan?

If you’ve been told you don’t qualify for a DCP, don’t stress—you’ve still got options. And hey, if it’s because your debt hasn’t hit 12 months’ worth of your salary, that’s actually a good thing! It means things haven’t spiralled too far yet. But that doesn’t mean you should ignore it either.

If you’re starting to feel the pinch from mounting credit card bills, here are 3 solid tools to help you take back control.

Option #1: Personal loans (a.k.a. DIY your debt consolidation)

If you don’t meet DCP requirements, you can still roll your debts into one with a low-interest personal loan. Use the loan to clear your credit card balances, then repay the loan at a much lower rate—typically around 6%–9% p.a. versus 27.9% on credit cards. It’s a great way to DIY your own consolidation plan without needing to go the DCP route.

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ALSO READ: 9 Things to Look Out For When Taking Out Personal Loans

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Option #2: Credit Counselling Singapore’s Debt Management Programme (DMP)

If your debt’s already giving you sleepless nights, it might be time to call in the pros. Credit Counselling Singapore (CCS) runs a Debt Management Programme (DMP) that helps you restructure your debt into 1 monthly payment—often with reduced interest. You’ll need to attend a counselling session, but it’s a great option if you’re facing difficulties and need a structured plan forward.

 

Option #3: Balance Transfer Plans

For a short-term fix, a balance transfer plan could be your lifesaver. These let you move your credit card debt to another bank offering 0% interest for a few months (usually 3 to 18). It’s ideal if you’re confident you can clear your debt within that window. Just be sure to check for processing fees and note when the higher interest kicks in after the promo ends.

 

This article was first drafted with the help of AI and later reviewed and refined by the author.

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