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GM Creditz Pte Ltd is a licensed moneylender (License No. 101/2021) listed in the Registry of Moneylenders, under the Ministry of Law in Singapore.

7 Easy Steps to Clear Debts Fast in Singapore

how to clear debt fast singapore

The pandemic virtually shattered Singapore’s economy. It’s currently under a second economic halt due to the rising cases of new strains. Unfortunately, employees who have to stop working during the pandemic halt will face cash problems.

This event will eventually lead them to deep debt with lenders. Without any cash, Singapore employees have no recourse but to borrow money.

COVID-19 Relief Measure

Fortunately, Singapore’s government allows employees to apply for the Standard Chartered-subsidized Special Financial Relief Programme (SFRP). This initiative supplies anyone who has lost 25% and above their average monthly income. However, Singapore’s SFRP might not be enough to help certain borrowers at a loss on how to clear credit card debt fast Singapore.

It won’t be easy to clear debts in Singapore amid the pandemic. However, if the SFRP isn’t enough to clear your debts, following the steps we’ve listed below might give you the best chance at clearing problematic credit card debt.

With your best effort in following the steps below, you’ll clear your debts in Singapore even during its most economically challenging periods.

How to clear debt fast Singapore

  • Make an Effective Budget

Take note of your current income and expenses. Make this step easier by using a budgeting app or other tools to monitor the total cash amount you save monthly.

Next, select expenses you can cut without consequence. For example, recurring subscriptions you haven’t bothered to use in months are expenses you can cut without consequence. However, cutting down food and utility costs isn’t practical.

You have a definite savings number after deducting the necessary expenses and taxes. You can use this monthly-saved amount to pay your credit card debt or other debt from high-interest rate unsecured loan facilities. However, every Singapore borrower knows it’s not that simple.

  • List All Your Outstanding Credit Card Debt

In the step above, include all your outstanding credit card debt along with your necessary monthly expenses. However, calculating this might not be easy if you’re going through compounded interest. Nevertheless, while it’s challenging, going through your compounded interest calculation can give you an accurate figure of your total credit card debt in Singapore.

Prioritize using an equation to find your monthly instalments inclusive of interest rates. Then, if you have multiple loans, list each of these monthly payments by performing the necessary calculations.

  • Pay Higher Interest Rate Debts First

Most Singaporeans have high-interest rate debts from credit cards. Most credit cards have an attractive 1-2 year interest offer. Unfortunately, many borrowers in deep credit card debt failed to manage their credit card payments properly.

While it’s convenient to pay the minimum amounts monthly, the interest rate compounds continuously. The increasing interest payments make both balance transfers or debt consolidation plans services handy in rapidly clearing your credit card debt.

If you have enough monthly savings, pay your high-interest rate debt first. It might look scary if you have multiple debts with compounding interests. However, a progressively-increasing high-interest credit card bill will still have a higher repayment amount — and will continue to go higher.

Use The Right Tools To Pay Off Your Debt

You need the right tools to keep out of problems. Fortunately, Singaporean borrowers have many financial tools at their disposal to help them get out of trouble. Here are a few financial services to help you get out of high credit card bills.

Balance Transfers

All banks have their accompanying balance transfer services for credit cards. Because they know their products and borrowers well, banks provide zero interest and slightly higher processing fee loans with balance transfers.

Borrowers qualified for a balance transfer pay no additional interest. However, after the balance transfer period ends, they may deal with increased interest rates afterward.

Pros

  • Pay zero interest for a period
  • Works with most credit cards
  • Immediate bank approval

Cons

  • High penalties and interest rates
  • Not compatible with most loans
  • High processing fee

Personal Loans

Most bank personal loans have lower interest rates than credit cards. In addition, these financial products will give you six months of your salary. That amount can resolve your debts with credit cards quickly.

Most credit cards have a 5% average monthly interest rate. On the other hand, personal loans have a 5% average annual interest rate. This figure makes them an excellent low-interest credit card debt tool.

Pros

  • Available from virtually every financial institution
  • Light requirements
  • Provides six months of your regular salary

Cons

  • Six months of your salary can be too much or too little to pay entirely for your debt
  • Relatively high rates
  • May require higher credit scores

Line of Credit

If you have access to a line of credit, you can use it to pay for your high credit debts. However, be aware that lines of credit are like credit cards.

Depending on your bank’s preference, you can have a higher or lower monthly or annual line of credit interest rate. We highly suggest using a balance transfer or a personal loan rather than a line of credit.

Debt Consolidation Plan

Consolidate your credit card debt if balance transfer and personal loans can’t completely pay for it. In Singapore, some borrowers can accumulate an enormous debt amount that requires debt consolidation plan dcp. Keep in mind that using this service indicates you’re almost bankrupt.

Negotiate With Your Banks

Before you use other services, consider talking to your banks in Singapore. Contrary to popular opinion, many banks are open to discussion. They’re willing to meet you halfway and extend your repayment period. If you can guarantee you can make regular payments, banks will make a new contract with you.

If your bank agrees to negotiate, they’ll ask you to provide your current regular income and occupation. In doing so, they can assess your plan’s feasibility because you possess resources that can accomplish your regular monthly repayment.

However, keep in mind that banks may insist on a higher-than-expected debt repayment amount.

Find Additional Non-Loan Funding

It’s challenging to juggle multiple occupations in Singapore. However, you can find additional professional engagements if your mind’s made up. It’ll take up some of your daily free time. However, being debt free gives you reduced stress with fewer issues.

Here are a few ways to secure non-loan funding to bolster your regular monthly payment.

Extra Work

Online employment platforms became popular across Singapore during the last decade. Consequently, these platforms became much more popular during the pandemic. If you have skills that can help other professionals, you can get extra payment. This amount can serve as your regular loan repayments.

Investing

Some Singaporean borrowers consider debts a poor turn of investments. However, you won’t get into deep debt by making the right investments. Today, so many financial apps give you the freedom to invest in various markets outside Singapore. Plus, you can even buy cryptocurrencies through internationally recognized apps.

Friends and Family

For many Singaporeans, borrowing money from friends and family seems taboo. However, true friends and concerned family members will listen to your debt issues. However, don’t squander their trust. Instead, with their aid, clear your debts.

Alternatively, charity institutions can help you resolve a huge portion of your debt. Most debt consolidators work with charities and trade unions. These organizations have sufficient resources to resolve most debts.

how to clear debt fast singapore

Debt Consolidation: More Information

Consolidators will have you pay a single regular debt repayment on a low-interest loan using a partner financial institution. So while it might take a while until you can pay back your consolidator completely, you’re on the best path towards removing all your debt. Plus, they’re willing to help you if you run into any repayment challenges.

Will Consolidators Report My Debt?

Credit agencies will record all your financial activities. Therefore, charities or trade unions you work with will share your data. Debt consolidation will reflect negatively on your credit report. However, your credit scores will drop even further if you don’t use consolidation and declare bankruptcy instead.

Licensed Moneylender Personal Loan as Debt Consolidation

Personal loans from licensed moneylenders are considerably helpful if their 4% APR ceiling is lower than your compounded credit card interest. Alternatively, banks have their respective personal loan products that possibly offer lower interest rates and processing fees.

On the other hand, if you have low credit scores, moneylender personal loans can pay back most credit card debt. A licensed moneylender can supply you with six times your monthly income.

Singapore does not recognize licensed moneylenders as credit facilities. However, they offer a lower-interest revolving credit that can help borrowers become debt-free. Keep in mind that licensed moneylenders have respective terms and conditions with small differences from the usual bank contracts.

Licensed Moneylender Personal Loan Features:

  • No high credit scores needed
  • Online application
  • No interviews required
  • Six months of your salary
  • Same-date loan release (if you pass all requirements to prove your eligibility).

Are Licensed Moneylender Debt Consolidations Different From The Standard?

Both debt consolidation products are alike in principle. However, they differ in these two areas

  • Loan Amount: Charities leverage their reputation and pay for a part or your entire loan depending on its size. Licensed moneylenders give you a personal loan and have you independently consolidate your debt.
  • Terms and Conditions: Charities and trade unions have varying consolidation penalties for borrowers who fail to pay. Licensed moneylenders can make a claim against you if you fail to fulfill your contract.

It’s Easy to Clear Singapore Debts Quickly

With the right mindset, you can get yourself out of debt in Singapore. It will require diligence and regular monthly payment to resolve your financing. With these seven steps, you can quickly get started on getting debt-free.

If you need the best personal loan worth six months of your salary, you can always count on GM Creditz to provide you with the easiest application method and same-day loan release. Plus, GM Creditz does not need high credit scores to get your personal loan application approved. So visit our website today and apply for a personal loan now!

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