A Debt Consolidation Plan (DCP) allows you to combine existing unsecured loans into a single loan with a lower interest rate and longer tenor. You then repay this loan in automatic monthly payments, similar to a personal instalment loan, for a tenor of up to 10 years.
A DCP can only be used to consolidate loans from unsecured credit facilities like credit cards, credit lines, and personal loans. However, certain unsecured loans like renovation loans, education loans, joint accounts, and credit facilities for businesses are not eligible for a DCP.
This new debt management tool was launched in 17 January 2017 by the Association of Banks in Singapore, to specifically help Singaporeans and Permanent Residents who are juggling multiple high-interest unsecured debts. A DCP can help you pay off your existing credit card debts at lower interest rates, with monthly payments you can afford.