BOC is a China-based bank in Singapore which enjoys a strong presence in the region. The bank offers a wide range of financial products and services that cater to both personal and corporate banking.
The Bank of China Debt Consolidation Plan (DCP) is an unsecured loan which serves the purpose of consolidating outstanding unsecured loan balances. Balances such as credit card dues or personal loans from one or more banks fall under the purview of the debt consolidation plan.
Let us examine the features and benefits of the BOC Debt Consolidation Plan in detail:
Assume a borrower has outstanding credit card balances with 4 different banks to the tune of S$30,000. With most credit cards charging an interest rate of 26% p.a. or more, the interest that the borrower pays just on their credit card balances can amount to S$7,800 annually. This will only increase with an increase in tenure.
If the borrower was to go in for a debt consolidation loan, he/she would receive the loan amount for a much lower rate of interest. Even if the rate of interest is an EIR of 11% p.a., the borrower would only be paying S$3,300 in interest which is less than half the amount they would be currently paying. Not only does the borrower save on interest paid, they also get to clear their loans faster as the instalment amount to be paid every month would also be lower.
The above example has been simplified for illustration purposes. Actual numbers may vary depending on the outstanding loan balance of the borrower, the debt consolidation loan amount, the tenure chosen and the rate given at the time of approval.
The applicant must provide the following documents at the time of application:
Borrowers can apply for the BOC DCP through the following ways:
No. As per the regulations put forth by MAS, only unsecured loans such as credit cards and personal loans can be consolidated under a debt consolidation loan.
No. The additional allowance is provided to cover for any incidental charges incurred and is only given for the first debt consolidation loan taken. Any subsequent refinancing of the DCP will not receive an additional allowance.
No. the additional allowance is given as a bundle package and cannot be opted out of. However, any unused portion of the allowance or any amount that has not been disbursed will be refunded.
No. When the debt consolidation loan has been approved, all outstanding balances will be cleared and existing credit facilities such as credit cards will be deactivated. The borrower will however receive a complimentary BOC credit card with a credit limit equal to their monthly salary to manage any expenses.
No. A borrower can only apply for one DCP at any given point of time regardless of which bank has given them a debt consolidation loan.