CIMB is a popular bank in Singapore that offers a wide range of banking products. The bank offers products catering to personal banking, corporate banking, and investment banking. Of the many loans that CIMB has to offer, the CIMB Debt Consolidation Plan is an unsecured loan with a very specific purpose. This plan aims to help borrowers consolidate their outstanding unsecured loan balances such as credit card dues or personal loans from one or more banks into one loan with a single instalment.
Features and Benefits of CIMB Debt Consolidation Plan
- With the CIMB debt consolidation loan, borrowers can consolidate all of their outstanding unsecured loan balances one loan. With only one instalment to pay, repaying the loan becomes easier.
- With only one instalment to be paid, borrowers will no longer have to worry about remembering varying due dates and making payments on multiple instalments. This gives the borrower a greater handle on their finances.
- The CIMB DCP consolidates existing loans into one loan with a much lower rate of interest. The lowered interest rate reduces the overall interest that needs to be paid and reduces the monthly instalment as well making it that much easier to repay their loans.
- The CIMB debt consolidation loan has tenures of up to 8 years giving borrowers a high degree of flexibility.
- The debt consolidation plan comes with a revolving line of credit in the form of a CIMB credit card with a credit limit equal to the borrower’s monthly salary.
Interest Rate for CIMB Debt Consolidation Plan
The CIMB DCP offers a maximum tenure of 8 years. The bank offers a flat rate of interest starting as low as 2.77% p.a. The effective rate of interest of the plan begins at 7% p.a. The plan has a one-time handling fee of 1% which is worked into the effective interest rate.
How the CIMB Debt Consolidation Plan Works
Assume a borrower has outstanding unsecured balances with 3 different banks. These could be credit card balances or personal loans or both. For sake of illustration, let us assume the borrower has only credit card balances to the tune of S$45,000. With an interest rate of 26% p.a., the borrower will be paying S$11,700 in interest alone. If the borrower takes 6 years to clear this, he/she would have pad S$70,200 in interest alone.
If the borrower chose a CIMB debt consolidation loan, he/she would receive a loan amount of S$47,250 (inclusive of a 5% allowance) and at a low interest rate of only 7%, he/she would be paying only S$3308 per year or S$19,845 for a tenure of 6 years.
We can see from the above illustration that there is a huge amount of interest that the borrower would save. Not to mention, the lower interest rate also means that the instalment amount the borrower needs to pay every month is also greatly reduced. The above example is for illustration purposes only and actual rates will vary.
Eligibility Criteria for CIMB Debt Consolidation Plan
- The borrower must be a Permanent Resident or a Singaporean citizen.
- The minimum age of the borrower must be 21 years.
- The minimum annual income of the borrower must be S$30,000 but cannot exceed S$120,000.
- The total outstading balances of the borrower must be greater than 12 times their monthly income.
- The borrower can be salaried, self-employed or commission based.
Documents Required for CIMB Debt Consolidation Plan
The applicant must provide the following documents at the time of application:
- The applicant must provide a copy of their NRIC, both front and back
- They must provide a copy of their most recent Credit Bureau Report
- Income documents such as computerised payslips, income tax notice of assessments and CPF contribution statements must be provided.
- Statements showing billed balances, charge slips showing unbilled balances, confirmation letters showing balance transfers or loans and any other relevant documents disclosing the outstanding unsecured balances of the borrower must be provided.
How to Apply for CIMB Debt Consolidation Loan
Borrowers can apply for the CIMB DCP through the following ways:
Online: Borrowers can visit the CIMB website, go to the Debt Consolidation Plan page. Here they will have either have the option to download the application form, fill it out and submit it online along with supporting documents or the option of leaving their contact details and having the bank contact them.
Offline: Borrowers can walk into their nearest CIMB branch and initiate the debt consolidation loan application.
- Does the CIMB credit charge an annual fee?
No. The CIMB credit card offered with the debt consolidation plan does not charge the borrower an annual fee.
- What is the additional allowance provided for?
Every debt consolidation loan is provided with a 5% additional allowance. This allowance is to cover for incidental charges such as interest rates, late payment fees, prepayment penalties etc. between the time it takes for the DCP loan to be approved to the time the loan amount has been disbursed.
- Can one have the debt consolidation plan amount disbursed to an account of their choice?
No. The loan amount is not disbursed to the borrower but is used to pay off the outstanding loan balances directly with the corresponding financial institute
- Can one increase the credit limit of the revolving line of credit?
No. one cannot increase or decrease the credit limit of the revolving line of credit. It is fixed to 1 time the monthly salary of the borrower. Only an increase can be done if the borrower has an increase in their monthly salary.
- Can one cancel the revolving line of credit?
No. It comes bundled with the debt consolidation loan and cannot be cancelled.