Debt Management

Help with Payments to Credit Card and Credit Line Accounts

The Monetary Authority of Singapore (MAS), together with the financial industry, has come up with the Special Financial Relief Programme (Unsecured) to help you lower your overall interest and debt repayment on your revolving credit facilities such as credit cards, if you have been financially impacted during this COVID-19 pandemic.

Borrowers can apply for the SFRP (Unsecured) to convert outstanding unsecured balances from their credit cards and other revolving credit lines to a term loan any time from 6 Apr 2020 to 31 Dec 2020.

The term loan is repaid in fixed monthly instalments over a maximum repayment period of five years (subject to the bank’s approval) at an effective interest rate set at 8% p.a.


Eligibility criteria to apply for the SFRP (Unsecured)

1.    Singapore Citizen or Permanent Resident;

2.   Have lost 25% or more of your income after 1 February 2020 (proof of impact on income required);

3.   Your accounts are between 30 and 90 days past due on your existing unsecured debt with the bank or card issuer (as at application date); and

4.   You are not on any existing debt repayment or restructuring programmes with the bank or card issuer.


Click here to find out more and see a list of the financial institutions that offer the Special Financial Relief Programme.

Help with Repayment of Residential Property Loans

Borrowers with residential property loans may apply to their respective bank or finance company to defer either (i) principal payment or (ii) both principal and interest payments up to 31 Dec 2020.

According to MAS, Special Financial Relief Programme (Mortgages) will allow interest to accrue only on the deferred principal amount; no interest will be charged on the deferred interest payments. Borrowers do not need to demonstrate any impact from COVID-19 to obtain the deferment.


Eligibility criteria to apply for the SFRP (Mortgages)

1.    Your mortgage repayments are no more than 90 days past due;

2.    No need for borrower to demonstrate specific impact from COVID-19.


Click here to find out more and see a list of the financial institutions that offer the Special Financial Relief Programme.

Help to Address an Unsecured Debt Problem

If you have been struggling to make payments to your creditors for your credit cards and other unsecured loans, you may want to consider a more comprehensive approach to address the debts. 

Debt Management involves working directly or indirectly with creditors to restructure the debt to allow the borrower to manage repayments that are within the borrower's current payment capacity. 

Please explore the following resources to find out more.

Credit Cards are convenient, such as being able to purchase a large ticket item without forking out a lump sum of cash. So, for a $5,000 vacation that was charged to your card, you could pay $150 when the bill arrives - the minimum amount payable if you can’t settle in full.

What happens when the outstanding amount has ballooned to $50,000? You are still expected to make at least the minimum payment, which is now $1,500.

That’s when some borrowers realise that even making the minimum payment has become increasingly difficult.

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In order to work out a feasible repayment plan with creditors, you need to establish a household budget that sets aside enough money for your family’s basic and essential needs before you can determine how much you can afford for monthly payments.

The amount you can afford to repay creditors is your payment capacity.

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A Debt Management Programme (DMP) is a debt repayment arrangement that is facilitated by Credit Counselling Singapore (CCS) for borrowers who are struggling to pay for basic living expenses and at the same time, make minimum payments to all his/her banks.

CCS will work with you to establish a reasonable budget for your household, determine how much you can set aside as monthly payments, and propose a repayment arrangement for your creditors’ approval.

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Debt Consolidation Plan (DCP) is a debt refinancing program which offers the borrower the option to consolidate all unsecured debts (such as credit card debts and some types of unsecured loans) across different banks into a single term loan with one bank.

Certain types of unsecured debts are excluded and you must meet the eligibility criteria before banks consider your application.

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If a borrower owes a debt of at least $15,000 that cannot be repaid, then either the borrower or creditor may file a Bankruptcy Application with the High Court. There are consequences to being declared bankrupt such as restrictions to travelling overseas and access to credit.

However, if one has exhausted all other options for repaying his /her debts, bankruptcy is an option for consideration.

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There are a lot of misconceptions about what the Debt Repayment Scheme (DRS) is. For one, it is NOT a scheme that you can simply “apply” for when you cannot pay your creditors. It is “pre-bankruptcy scheme which is administered by the Official Assignee (OA) under the Bankruptcy Act (Chapter 20)”.

To put it simply, when you are sued for bankruptcy (or self-file to be a bankrupt), the OA checks your eligibility and assesses your suitability before placing you on the Scheme.

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