Guide to Debt consolidation Plans

If you currently find yourself in a difficult financial situation, trying to manage multiple payments to various creditors, you are not alone. Every year, thousands of people in Singapore find themselves in a similar situation, struggling to pay overdue debts. Rather than trying to pay off the minimum amount for each debt, a debt consolidation plan can quickly reduce your repayments to one, easy-to-manage monthly debt payment. Debt consolidation plans also provide a reduced interest rate, to ensure your money isn’t going towards expensive interest rates.

Debt consolidation plans can be one of the most effective and affordable debt management strategies available to individuals affected by bad debts. However, you need to consider a range of relevant issues, as a debt consolidation plan may not be the ideal solution or available for you.

What Is A Debt Consolidation Plan?

In basic terms, a debt consolidation plan will resolve all off your existing debts to multiple creditors and transfer the outstanding debts into one loan with one simple to mange, affordable, monthly repayment. You will still have to pay back all the outstanding money owed to creditors, but with a debt consolidation plan you should be able to reduce your monthly spending, pay a reduced interest rate, and even spread the debts out over an extended repayment period.

How Can A Debt Consolidation Loan Help With My Debts?

If you are careful about managing your credit, spending and debt repayments, a debt consolidation loan can help by:

  • Minimizing your monthly payments. By extending the repayment period of your outstanding debts you will often be able to reduce your monthly repayments and interest rates to an affordable level. Many people are often paying just the ‘minimum payment required’ on their existing debts. In most cases, this just means covering the interest rate part of the loan while leaving the actual total amount owed unchanged.
  • Improving your credit rating. If you are able to successfully pay off the debt consolidation loan and amass no further debt, this will be seen as a positive impact on your credit rating. It is also a good idea to review your credit report before you apply for a debt consolidation loan.
  • Minimize the interest you pay. If you have outstanding debts with store or credit cards that are locked into a high interest rate, then you will certainly pay back less interest on your debt with a debt consolidation loan. It is important to ensure you stop spending on your cards though.

How Do I Apply For A Debt ConsolidationLoan? will review your personal case to see if you are eligible for a debt consolidation loan. We are extremely fair in our review, but will consider how much debt you have outstanding and your credit risk.

If you have an existing history of bad credit or large debts, a credit provider may only consider offering you a secured loan. This will require you using your property as security against the loan, reducing the risk to a lender. You need to be very sure you will be able to afford the loan repayment, as your house could be at risk if you fail to pay back the loan.

The easiest way to find out which type of Debt Consolidation Loan or Debt Management Strategy will suit your particular needs is to fill out our enquiry form. We look forward to hearing from you.

More Types Of Debt Consolidation Loans

In today’s marketplace, the majority of personal loans can be used to consolidate your debts. As is the case with any other type borrowing will consider:

  • The amount you wish to borrow
  • Your credit history
  • How much time you need to repay the debt

If your outstanding debt is low and you have no problems with your credit rating, a personal loan could help you consolidate and reduce your debt.

Alternative Solutions

If you are having difficulties in repaying your creditors or overdue debts, there may be better solutions to suit your individual situation. You can use our online contact tool to request a callback from our friendly debt experts. Our initial debt consultation will provide you with the most appropriate solution to resolve your debt problem. Fill out our enquiry form today.