Best Debt Consolidation Loans for Bad Credit (Updated March 2025)

• Est. EIR: 6.56% p.a. 

• Loan amount: No stated minimum or maximum

• Min. annual income: $30,000

QUALIFICATIONS

Overview: 

If you're focused on minimising the overall cost of debt consolidation, POSB/DBS is a strong contender. They're known for offering some of the market's most competitive interest rates, which directly translates to lower total interest payments. This allows you to tackle your debt more efficiently, turning the goal of being debt-free into a tangible reality.

Qualifications: 

• Singaporean/PR

• 21 to 65 years of age (upon loan maturity date)

• Annual income between $30,0000 to $120,000

• Balance to Income Ratio (BTI) of more than 12 times monthly income

Available term lengths:

• 1 to 8 years

Fees and charges:

• Processing fee: $99

• Early termination fee: 5% on outstanding balance at point of termination

• Late fee: $90

PROS & CONS

Pros: 

• No minimum credit score

• Competitive interest rates

• 1 x survival credit offered

• Established bank reputation

Cons: 

• Total interest-bearing debt must exceed 12 times monthly income

• Comes with several fees

DISCLAIMER

Disclaimer: 

Rates and terms are subject to individual credit assessment and bank approval.

• Est. EIR: 8.22% to 10.41% p.a.

• Loan amount: No stated minimum or maximum

• Min. annual income: $30,000

QUALIFICATIONS

Overview: 

UOB takes the guesswork out of debt consolidation with a clear, tiered interest rate structure that adjusts based on your loan tenure. This level of transparency means you'll know exactly how your interest rates will evolve over time. With fixed rates tied to your loan's length, you can confidently make informed decisions, giving you a sense of control over your debt management.

Qualifications: 

• Singaporean/PR 

• 21 to 65 years of age (upon loan maturity date)

• Annual income between $30,0000 to $120,000

• Balance to Income Ratio (BTI) of more than 12 times monthly income

Available term lengths: 

• 1 to 8 years 

Fees and charges: 

• Processing fee: $0

• Early termination fee: The higher of $200 or 5% on outstanding balance at point of termination

• Late fee: $90

PROS & CONS 

Pros: 

• No minimum credit score

• Transparent, fixed interest rates non-dependent on loan amount

• Complimentary VISA Platinum Card

• No processing fee

• Established bank reputation 

Cons: 

• Total interest-bearing debt must exceed 12 times monthly income

• Minimum $200 early termination fee

DISCLAIMER 

Disclaimer: 

Rates and terms are subject to individual credit assessment and bank approval.

• Est. EIR: From 6.33% 

• Loan amount: S$1,000 to S$250,000 

• Min. annual income: $30,000

QUALIFICATIONS 

Overview: 

If you have significant debt to consolidate, Standard Chartered offers a generous maximum loan amount. This allows you to consolidate a large number of outstanding debts into a single, manageable loan, streamlining your finances and providing a comprehensive solution for your financial obligations.

Qualifications: 

• Singaporean/PR 

• 21 to 65 years of age (upon loan maturity date)

• Annual income between $30,000 to $120,000

• Balance to Income Ratio (BTI) of more than 12 times monthly income

Available term lengths: 

• 3 to 10 years 

Fees and charges: 

• Processing fee: $199

• Early termination fee: The higher of $250 or 5% on outstanding balance at point of termination

• Late fee: $100

PROS & CONS 

Pros: 

• No minimum credit score

• High maximum loan amount

• Complimentary credit card

• Established bank reputation 

Cons: 

• Total interest-bearing debt must exceed 12 times monthly income

• Relatively high fees

DISCLAIMER 

Disclaimer: 

Rates and terms are subject to individual credit assessment and bank approval.

• Est. EIR: From 8.00% p.a.

• Loan amount: Between $1,000 to $200,000

• Min. annual income: $30,000 for salaried workers, $40,000 for self-employed

QUALIFICATIONS 

Overview: 

Need breathing room with your repayments? HSBC provides the advantage of extended loan tenures, allowing you to spread your debt consolidation over a longer period. This flexibility is ideal for those who want to lighten their monthly financial load, making it easier to manage their budget while tackling their debt.

Qualifications: 

• Singaporean/PR 

• Annual income between $30,0000 to $120,000 for salaried workers, and $40,000 to $120,000 for self-employed

• Balance to Income Ratio (BTI) of more than 12 times monthly income

Available term lengths: 

• 1 to 10 years 

Fees and charges: 

• Processing fee: The higher of $88 or 1% of approved loan amount 

• Early termination fee: 5% of repayment amount

• Late fee: S$120 for each monthly repayment not received in full by monthly repayment due date

PROS & CONS 

Pros: 

• No minimum credit score

• Loan tenure of up to 10 years

• 5% cashback upon approval when refinancing with HSBC

• Established bank reputation

Cons: 

• Total interest-bearing debt must exceed 12 times monthly income

• Relatively higher late fees

DISCLAIMER 

Disclaimer: 

Rates and terms are subject to individual credit assessment and bank approval.

• Est. EIR: From 7.50% p.a.

• No stated minimum or maximum

• Min. annual income: $30,000 for existing customers, $48,000 for new customers

QUALIFICATIONS 

Overview: 

Citibank values customer loyalty by offering preferential interest rates and lower income requirements for those who already bank with them. This translates to more accessible and affordable debt consolidation, rewarding you for your existing relationship with the bank and simplifying your financial management.

Qualifications: 

• Singaporean/PR 

• At least 21 years of age

• Annual income between $30,0000 to $120,000 for existing Citibank customers, and between $48,000 to $120,000 for new customers

• Balance to Income Ratio (BTI) of more than 12 times monthly income

Available term lengths: 

• 1 to 7 years 

Fees and charges: 

• Processing fee: $0

• Early termination fee: 5% of repayment amount

• Late fee: S$120 for each monthly repayment not received in full by monthly repayment due date

PROS & CONS 

Pros: 

• No minimum credit score

• No processing fee

• Complimentary credit card with a limit equivalent to monthly income

• Established bank reputation

Cons: 

• Total interest-bearing debt must exceed 12 times monthly income

• Relatively high minimum annual income for new customers

DISCLAIMER 

Disclaimer: 

Rates and terms are subject to individual credit assessment and bank approval.

What minimum annual income do I need? You need a minimum annual income of $30,000.

Why we like POSB: POSB/DBS offers some of the most competitive interest rates in the market, making it a cost-effective option for debt consolidation.

What minimum annual income do I need? You need a minimum annual income of $30,000.

Why we like UOB: UOB's clear, tiered interest rate structure based on loan tenure provides transparency and predictability, allowing borrowers to manage their debt with confidence.

What minimum annual income do I need? You need a minimum annual income of $30,000.

Why we like Standard Chartered: Standard Chartered offers a high maximum loan amount, catering to individuals with substantial debt consolidation needs.

What minimum annual income do I need? You need a minimum annual income of $30,000.

Why we like HSBC: HSBC provides extended loan tenures between 1 to 10 years, offering flexibility and lower monthly repayments for borrowers.

What minimum annual income do I need? $30,000 for existing customers, $48,000 for new customers.

Why we like Citibank: Citibank rewards customer loyalty with preferential interest rates and lower income requirements for existing customers.

Debt consolidation offers a structured approach to managing multiple debts by combining them into a single, more manageable loan. In Singapore, even with a less-than-ideal credit history, this is achievable.

The process begins by assessing your current debt load and exploring available loan options. Lenders will evaluate your financial situation, considering factors beyond just your credit score, such as your income stability, employment history, and overall debt-to-income ratio.

The goal is to obtain a new loan with terms that are more favourable than your existing debts, typically with a lower interest rate and a more extended repayment period. This simplifies your finances by reducing the number of payments you need to make each month and potentially lowering your overall interest costs.

Even small improvements to your credit score can significantly enhance your chances of loan approval. Start by paying down smaller debts to reduce your credit utilisation. Regularly review your credit report for any inaccuracies, as correcting these can positively impact your score. For practical tips, explore our comprehensive guide on improving credit scores in Singapore.

Incorporating a co-signer or guarantor with a stronger financial profile can substantially improve your loan approval prospects. This individual essentially vouches for your ability to repay the loan, providing lenders with added security. 

A co-signer shares the responsibility of the loan, while a guarantor agrees to cover the debt if you default. This strategy is particularly effective when you have a reliable individual with a solid credit history willing to support your application.

Secured loans, available from reputable lenders like UOB or HSBC, offer a viable pathway to debt consolidation, especially with a less-than-perfect credit history. By pledging assets such as property, fixed deposits, or even valuable possessions as collateral, you reduce the lender's risk.

This increased security makes them more inclined to approve your application, often with more favourable terms. The value of the collateral typically determines the loan amount you can secure, providing a tangible assurance to the lender of your commitment to repayment.

Pros:

Simplified debt management

Potential interest rate reduction

Opportunity for credit score improvement

Cons:

Eligibility limitations

Risk of increased debt

Potential for higher fees

• Simplifies debt management: Imagine replacing multiple monthly payments, each with varying interest rates and due dates, with a single, predictable payment. This simplification is a core advantage of debt consolidation. By combining your debts into one loan, you streamline your financial obligations, making it easier to budget and track your progress toward becoming debt-free.

• Potentially lower interest rates: Consolidating high-interest debts, such as credit card balances, into a single loan can potentially lower your overall interest rate. This reduction can save you a significant amount of money over the life of the loan, allowing you to pay down your principal faster and reduce the total cost of your debt.

• Improves credit score if payments are made on time: Making consistent, on-time payments on your debt consolidation loan can positively impact your credit score. This demonstrates responsible financial behaviour to lenders, gradually improving your creditworthiness and opening up more favourable financial opportunities in the future.

• Eligibility limitations: Debt consolidation loans, especially those with favourable terms, may have strict eligibility requirements. Lenders often consider factors such as your income and debt-to-income ratio. If your financial profile doesn't meet these criteria, you may find it challenging to qualify for a loan.

• Risk of increased debt: While debt consolidation can simplify your finances, it's crucial to manage your spending habits. If you continue to accumulate new debt after consolidating, you could end up with a larger overall debt burden. It's essential to use debt consolidation as an opportunity to adopt responsible financial practices and avoid further debt accumulation.

• Potential for higher fees: Some debt consolidation loans come with associated fees, such as processing fees, origination fees, or early repayment penalties. These fees can add to the overall cost of the loan, so it's essential to carefully review the terms and conditions before committing to a loan.

>> Compare: Best debt consolidation loans in Singapore

• Begin by compiling a comprehensive list of your existing debts, including credit card balances, personal loans, and any other outstanding obligations.

• Calculate your total debt amount and your monthly repayment obligations.

• Evaluate your current income and expenses to determine your debt-to-income ratio.

• Explore debt consolidation loan offerings from various banks and financial institutions in Singapore, such as POSB/DBS, UOB, HSBC, Citibank, and Standard Chartered.

• Focus on comparing interest rates (Effective Interest Rate - EIR), loan tenures, processing fees, and any other associated charges.

• Pay close attention to the eligibility criteria of each loan, including income requirements and any specific conditions related to debt-to-income ratios.

>> More: Compare all loan options with SingSaver

• Prepare the necessary documents, which typically include:

• NRIC (National Registration Identity Card)

• Proof of income (e.g., recent payslips, CPF contribution statements, income tax notices)

• Statements of existing debts (e.g., credit card statements, loan statements)

• Proof of residential address.

>> More: How to get a personal loan in 7 steps

• Once you've chosen a loan provider, complete the loan application form, either online or in person.

• Submit all required documentation along with your application.

• Be prepared to provide additional information or clarification if requested by the lender.

• The lender will conduct a thorough credit assessment, which may involve checking your credit report with the Credit Bureau Singapore (CBS).

• They will also evaluate your income, employment history, and debt-to-income ratio to determine your creditworthiness.

• If your application is approved, the lender will provide you with a loan offer, which outlines the loan terms, including the interest rate, loan tenure, and repayment schedule.

• Carefully review the loan offer and ensure you understand all the terms and conditions before accepting.

• Upon acceptance of the loan offer, the lender will disburse the loan amount.

• You can then use the loan proceeds to settle your existing debts.

• Some banks may settle the debts directly.

• Establish a consistent repayment schedule and ensure you make timely payments to avoid late fees and negative impacts on your credit score.

• Use this opportunity to develop sound financial habits and avoid accumulating new debt.

>> More: Learn how to manage your loan

Taking control of your debt starts with a solid plan. Two popular methods can help you gain traction: the snowball method and the avalanche method.

The snowball method focuses on paying off your smallest debts first, regardless of interest rate. This approach provides quick wins and boosts motivation. The avalanche method, on the other hand, prioritises paying off debts with the highest interest rates first, minimising the total amount of interest paid over time.

Choose the method that best aligns with your financial personality and stick to it. Alongside these methods, creating a detailed budget and tracking your spending can help you identify areas where you can cut back and allocate more funds towards debt repayment.

Navigating debt can be overwhelming, but you don't have to do it alone. Credit counseling can provide invaluable support and guidance. In Singapore, Credit Counseling Singapore (CCS) is a reputable agency that offers free and confidential counseling services. CCS helps individuals assess their financial situation, develop realistic repayment plans, and negotiate with creditors. Their services can empower you to take control of your debt and work towards a sustainable financial future.

Debt settlement involves negotiating with creditors to reduce the total amount you owe. This process typically begins with a thorough assessment of your debt situation, including all outstanding loans and credit card balances. You can engage a debt settlement service, such as those offered by licensed credit counseling agencies like CCS, to negotiate on your behalf.

Alternatively, you may attempt to negotiate directly with your creditors. Successful negotiations often involve offering a lump sum payment in exchange for forgiving a portion of the debt. Once an agreement is reached, it's crucial to formalise it in writing, outlining the terms of the settlement.

For a more structured approach, consider the Debt Management Programme (DMP) provided by CCS.

When all other debt resolution strategies have been exhausted, bankruptcy may be considered as a final option. Bankruptcy in Singapore leads to a legal discharge of debt under specific conditions. An individual can be declared bankrupt if their debts exceed S$15,000 and they fail to repay them.

Creditors may file for bankruptcy if the debt is not repaid, or individuals can voluntarily file if they are unable to meet their financial obligations. While bankruptcy offers a fresh start, it also has significant consequences, including potential asset forfeiture and long-term impacts on your credit rating.

It's crucial to seek legal advice and thoroughly explore all other options before pursuing bankruptcy.

>> More: Find out more about Debt Repayment Schemes