A debt consolidation loan is a financing option that allows borrowers to combine multiple unsecured debt, such as credit card balances, personal loans, or medical bills, into a single structured repayment. Banks in Singapore offer a Debt Consolidation Plan (DCP), but these often come with strict eligibility criteria and high income requirements. Licensed moneylenders, on the other hand, provide more accessible debt consolidation loans in Singapore, offering flexibility for those who may not qualify with banks.
All your existing unsecured debts, such as credit cards and personal loans, are combined into one loan. The borrowed amount is used to clear these accounts, ensuring you start afresh with a single repayment.
Once outstanding debts are settled, the old unsecured credit facilities are usually closed. This prevents further borrowing and helps you focus on repaying the consolidated loan responsibly.
Instead of juggling multiple due dates, you manage only one consolidated repayment each month. This simplifies budgeting and makes it easier to track your financial commitments.
With fewer bills to manage and a clear repayment plan, the pressure of multiple obligations is eased. This creates more breathing space for everyday living expenses.
By consolidating and staying current with payments, you reduce the risk of late fees, defaults, and negative entries in your credit report. This can protect and, over time, improve your credit standing.
Managing a single repayment each month helps reduce confusion and missed deadlines. Borrowers can better plan their cash flow, ensuring steady progress in clearing debts.
When compared to multiple high-interest credit cards, a consolidation loan may reduce your effective borrowing costs. This means more of your monthly payment goes towards reducing the principal.
Making consistent repayments on a structured plan can gradually rebuild your credit record. Over time, this helps restore access to financial products under better terms.
Beyond the numbers, having one clear repayment can ease the emotional strain of dealing with multiple debts. Borrowers often find it easier to stay motivated and disciplined when the process feels manageable.
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For example, if your loans are from credit cards, other unsecured credit facilities and reach at least 6x your monthly income, you are eligible for a DCP. If your loans are business or renovation loans, you are not eligible for the DCP.
If you meet all the criteria, you are eligible to apply for a DCP! It will definitely help you manage your finances better and make your life a lot easier.
How does Debt Consolidation Plan (DCP) work?
Here’s how it works. If you have multiple loans to repay, like high-interest credit cards, medical bills or loans, a DCP loan can combine them into one fixed monthly repayment.
A debt consolidation plan also provide a better effective interest rate (EIR) and longer loan tenures so that individuals can comfortably repay their loans, hence taking them out of the vicious cycle of financial burden.
It’s important to remember that your total outstanding balance remains the same, just your per annum effective interest rate (p.a eir).
There are several mandatory documents all financial institutions and lenders have to adhere to before a debt consolidation plan can be approved.
We have an online application form on our website that takes just a couple of minutes to fill in. You can find it here.
Our Debt Consolidation Loan package can be customized for your needs. Our loan assistant will advise you and help determine a comfortable repayment method for you. Our aim is to help you pay off the debts with less stress.
We keep the interest rates low for our consolidation plans because we understand that you are already saddled with so many repayments. We do not want to make your life harder with our loan.
We offer loan tenure periods that allow you to make comfortable repayments to avoid incurring even more fines.
Fill in our quick and secure online application form. It takes just minutes, and you’ll receive an instant in-principle approval to proceed.
Our loan officer will contact you shortly after your application to schedule an appointment and guide you through the required document submission.
During your appointment, we’ll review your income, loan obligations, and credit report to customise a debt consolidation loan plan tailored to your needs.
Once the terms are agreed upon, you’ll sign the loan agreement. We’ll finalise the approval and settle your existing debts accordingly.
After approval, the loan amount will be disbursed to you and you will pay your creditors on the spot. You’ll then begin your structured monthly repayments to 118 Credit under one consolidated loan.
If you’ve been rejected by banks due to poor credit, there’s still hope. At 118 Credit, we offer debt consolidation loans for bad credit to help you restructure your payments and recover financially.
Many borrowers struggle to qualify for bank loans due to past missed payments or maxed-out credit facilities. As a licensed moneylender in Singapore, we evaluate your current income and repayment ability instead of focusing solely on your credit history.
If you’re searching for private debt consolidation lenders or a moneylender debt consolidation option that works with your situation, 118 Credit can help. We’re committed to offering some of the best debt consolidation loans in Singapore, even for high-risk profiles.
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Always compare repayment terms across MAS-accredited banks and the Ministry of Law’s list of licensed money lenders. Interest rates, administrative fees, and tenures can vary significantly, so it’s important to review all options before committing.
Monthly affordability matters, but so does the overall repayment. Longer tenures may lower instalments but result in higher total costs. Borrowers should calculate the full repayment to make an informed choice.
Debt consolidation works best when paired with lifestyle changes. Budgeting, cutting unnecessary expenses, and automating repayments help ensure you don’t fall back into the same cycle of debt.
Professional guidance from Credit Counselling Singapore (CCS) can provide strategies for sustainable debt management. Combining consolidation with advice from experts ensures longer-term financial stability.
Illegal providers may advertise attractive terms but often impose excessive charges and use harassment tactics. Always check MinLaw’s official register to confirm you are dealing with a licensed money lender.
Bank DCPs and moneylender debt consolidation loans serve the same purpose but differ in eligibility, costs, and terms. Review these carefully to choose the option that best suits your financial situation.
Late or missed payments can damage your credit score further and lead to penalties. Set reminders or automate payments to stay consistent and avoid setbacks.
Claims of “debt-free in months” are misleading. Consolidation helps simplify and restructure debt, but repayment discipline is still required. Focus on realistic solutions, not quick fixes.
Consolidation is a tool, not a cure. Reflect on how the debt was accumulated, whether overspending, emergencies, or lack of planning, and make changes to avoid repeating the cycle.
Here are some of our Frequently Asked Questions that we get from most of our clients. Do take some time browsing through and we hope you may find the answers you are looking for!
Debt consolidation loans in Singapore help combine multiple unsecured debts into one monthly repayment, often with lower interest. They’re ideal for credit card bills, personal loans, and more.
Banks typically offer lower interest rates but have stricter eligibility requirements. Licensed moneylenders like 118 Credit provide faster approvals, personalised repayment plans, and may accept applicants with bad credit or lower incomes.
Yes. Credit card balances are among the most common types of unsecured debt eligible for consolidation through our debt consolidation plan.
You can consolidate unsecured debts such as personal loans, credit cards, education loans, and medical bills. Secured loans like home or car loans are not eligible.
A debt consolidation loan is used specifically to combine multiple existing unsecured debts into one repayment, while a personal loan can be used for general purposes.
Yes. We consider your current repayment ability and may still be able to offer you a solution if you’re recovering from past defaults.
You’ll need NRIC or passport, proof of address, latest payslips or CPF statements, income tax notice, and your credit bureau report.
In most cases, the approved loan amount will be disbursed to you, and you will pay your creditors on the spot. Our team will guide you through the process to ensure your outstanding debts are cleared correctly.
We offer flexible repayment tenures based on your income and total debt amount—typically ranging from several months up to a few years.
No. At 118 Credit, we maintain transparent fee structures and will explain all costs to you upfront before loan agreement signing.
In most cases, additional financing after a Debt Consolidation Loan (DCL) is discouraged until repayment is well underway. However, you may speak with us to reassess your financial situation.
If you miss a payment, you may incur late fees. It’s important to communicate with us early, we may restructure your repayment to help you stay on track.
Manage one-off expenses with a structured plan and clear terms.
Time-sensitive bills or repairs? Access same-day decisions and disbursement
Combine multiple repayments into one schedule for clarity and control.
Financing options tailored for expatriates and work-pass holders.
