Debt Consolidation in Singapore

Combine multiple high-interest debts into one manageable monthly repayment — and potentially pay less interest.

What is a Debt Consolidation Plan?

A Debt Consolidation Plan (DCP) is a MAS-mandated product offered by participating banks that allows you to combine all your unsecured credit facilities — credit cards, personal loans, credit lines, overdrafts — into a single structured loan at a lower interest rate. DCPs were introduced to help over-indebted consumers regain financial control.

Credit card balances

Personal loan debts

Credit lines & overdrafts

Structured repayment plan

DCP Interest Rates & Fees

DCP interest rates are significantly lower than credit card rates (typically 25–28% p.a.) but vary by bank.

Additional costs to be aware of:

Processing fee: typically 1–3% of the consolidated loan amount
Early repayment penalty: some banks charge a fee if you repay the DCP before tenure ends
Disbursement fee: charged for each repayment made to your existing creditors

When comparing DCP offers across banks, use the EIR and total repayment amount as your primary benchmarks.

DCP Eligibility Criteria

MAS sets specific eligibility thresholds for the Debt Consolidation Plan to target borrowers who are genuinely over-indebted.

Singapore Citizens or Permanent Residents
Annual income between S$20,000 and S$120,000
Total outstanding unsecured debt exceeds 12× your monthly income
Not currently bankrupt or under a Debt Repayment Scheme (DRS)
Minimum age 21 years old

If your income exceeds S$120,000 or your assets exceed S$2 million, you may not be eligible for the MAS DCP product — but alternative debt restructuring options may be available.

How a DCP Works, Step by Step

Apply to a participating bank. The bank will assess your eligibility, run a credit check, and calculate your consolidated loan amount.
The bank pays off your existing creditors. Once approved, the DCP bank directly settles all your outstanding balances with other lenders.
You make one monthly repayment to the DCP bank at the agreed interest rate and tenure (1–10 years).
Your credit cards are cancelled. All unsecured credit facilities are closed, except one card capped at 1× monthly income.
Completion. At the end of the tenure, all consolidated debts are cleared.

What Happens to Your Credit Cards?

When you take a DCP, MAS rules require that all existing unsecured credit facilities are cancelled, except for one credit card or credit line which is retained and capped at a credit limit of 1× your monthly income.

This restriction is intentional — it prevents you from accumulating new debt while repaying the DCP. For most applicants, this is a feature, not a drawback: removing access to high-interest revolving credit is what makes the plan effective.

Your CBS credit report will show the DCP as an active instalment loan. Consistent, on-time repayments improve your credit score over time.

Can You Refinance an Existing DCP?

Yes. If you are currently on a DCP and find a better rate at another bank, you can apply to refinance. The new bank will pay off your existing DCP balance and start a fresh consolidated loan.

Things to consider before refinancing your DCP:

Check if your current DCP has an early repayment penalty — this may offset the interest savings
Refinancing resets the tenure clock; you may end up paying interest for longer even if the rate is lower
Calculate the total repayment amount (not just monthly instalment) to confirm you are genuinely saving

Lendela can run a comparison for your specific outstanding balance and remaining tenure.

Frequently Asked Questions

Who is eligible for a DCP?

Singapore Citizens, PRs, and foreigners earning between S$20,000 and S$120,000 per year, whose total unsecured debt exceeds 12× monthly income.

What debts can be consolidated?

Credit cards, personal loans, credit lines, and overdrafts. Secured loans (mortgages, car loans) and debts from unlicensed lenders cannot be included.

Will my credit cards be cancelled?

Yes. All unsecured credit facilities must be cancelled except one, which is retained with a credit limit capped at 1× your monthly income.

Can I apply if I already have a DCP?

You can refinance an existing DCP to a new bank if you find better rates. Check for early repayment penalties and calculate total savings before switching.

Does applying affect my credit score?

A formal DCP application involves a hard credit bureau enquiry, which temporarily affects your score. However, a successfully managed DCP with on-time repayments generally improves your score over time.

How long does a DCP last?

DCP tenures range from 1 to 10 years. Choosing a longer tenure lowers your monthly payment but increases total interest paid. Use Lendela to model different tenure options.

See if a DCP is right for you

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