With the ravaging economic effects of the covid-19, most individuals in Singapore have found it hard to pay off their debts. Due to this, most of them have considered debt consolidation as the appropriate solution to pay the loans their high-interest debts. Choosing the right debt consolidation plan in Singapore will be key to financial freedom and paying high-interest debts.
Besides offering high-interest rates debt relief for only unsecured credit facilities like personal or credit card loans, it’s a proper way to manage your loans. Thus, it’s vital to understand the process of applying and choosing the appropriate debt consolidation plan. Read through the article to understand more about applying for different debt consolidation plans.
1. Prepare Your Documents
Before any financial firm approves a consolidation debt plan, you must provide the appropriate documents. The documents may vary depending on the lender you choose for your consolidation debt loans needs. Nevertheless, while seeking these services in Singapore, most documents require almost similar documents. Most lenders will request the following documents:
● Photocopy of your NRIC
● The latest credit bureau reports indicate your credit score and rating
● At least a three-month income documents
● Latest unsecured loans or credit card statements from the current loan providers
● Confirmation letter showing all your unbilled balances for the different instrument plans and credit card
2. Types of Consolidated Plans In Singapore
When applying for consolidated loans, it’ll be essential to consider the appropriate plan that’ll suit your financial needs. In Singapore, we’ve got four different debt consolidation loans; personal installment, line of credit, balance transfer, and debt consolidation plan. These plans come with different requirements and benefits.
Personal installment loans offer the best solutions for huge purchases with a long repayment option, like 12 to 60 months. The line of credit option will be appropriate for all your financial emergencies, and the lender only charges interest on withdrawals. Alternatively, the balance transfer will be important for your short-term money fix, and they have no interest.
Lastly, we have the consolidation debt plan, essential for all your unsecured loans, and it has a repayment period of between 1 and 10 years. When choosing the best way to pay off your high-interest loans, it’s important to consider the plan that meets your needs and the repayment period.
3. Wait For Your Debt Consolidation Loan Approval
After applying and presenting your lender with the necessary documents, you’ll have to wait for a particular period before approval. The lender will review these documents during this period and check if you qualify for the specific debt consolidation plan you’re applying for. After qualifying for the plan, the lender presents an agreement for you to sign.
When looking for the appropriate lender for your debt consolidation plan in Singapore, it’ll be imperative to consider seeking guidance from a lender who’ll guide you through the process. Before signing the agreement, experts advise you to read and understand the contract carefully and seek clarification when it’s unclear. In addition, it’ll be imperative to consider the additional fees that you might incur between the loan approval time and the time you’re receiving the money.
4. Start Repaying Your Consolidated Loans
After approval of the consolidation plan, you can use all the money in your account to pay off your existing loans. Later you can start paying the single consolidated loans. It’ll be good to stick to the repayment terms and conditions when paying the loans. Adhering to these terms or regulations will be beneficial to enjoy all your debt consolidation advantages. After repaying your loans, it’ll be vital to access your credit score to check your progress and observe any significant improvements. You can ask for loan refinancing if you realize major changes in your credit score.
Getting a proper debt consolidation plan in Singapore offers the basic and vital step of changing your financial and debt life. Apart from clearing your multiple debts, choosing the right plan will be essential for pulling down the high-interest rates on your loans. In addition, a debt consolidation plan will be important for boosting your credit score.
Nevertheless, it’ll be important to understand the process and choose the right plan and lender to achieve these benefits of consolidation debt loans in your financial sector. The above article provides an ultimate guide on the appropriate process of applying for your consolidation loans.