Citi Debt Consolidation Plan Review: Enjoy Lower Monthly Repayments
Are you staring at financial insolvency? Wait. Have you tried a debt consolidation plan? No? Provided you satisfy the eligibility requirements, you may consider this loan product to stay afloat.
With the Citi Debt Consolidation Plan, you can enjoy the convenience of making just one payment per month instead of running around from one lender to another to settle the outstanding debts. Moreover, as the payments are fixed in nature, you may also be able to introduce a greater level of discipline and order to your financial plans. Believe us when we say not all is lost. Try this debt programme and see the benefits for yourself.
Complimentary Insurance, Flexible Loan Tenure: Can This Programme Solve Your Worries?
When a product or a service catches your fancy, what is the first thing that you look for? You probably try to get hold of a list of its specifications – features and benefits. Why should it be any different for a debt consolidation plan (DCP)?
Maximum borrowing amount: With this credit facility, you can borrow an amount equal to the outstanding balance on your existing unsecured credit facilities. Over and above, with your first DCP arrangement, you’ll get an additional 5% allowance. This allowance is expected to cover any incidental charges that you may encounter from the time the loan is approved until the time the loan amount is disbursed and credited to the designated accounts. This facility will, however, be unavailable on any subsequent refinanced DCP arrangement.
Minimum borrowing amount: The minimum borrowing amount will be equal to the total outstanding balance on your unsecured credit facilities exceeding 12 times your monthly income.
Flexible tenure: Want to spread your debt repayment over multiple years? With this loan, you can spread your debt repayment period over 7 years at most.
Hassle-free payments: Make a single payment every month to a single entity instead of dealing with multiple lenders. This arrangement could prove to be more convenient and there could also be a lower possibility for defaults and late payments.
FREE insurance coverage: Get a protection insurance coverage of up to S$160,000 free of charge. This policy will cover you on total and permanent disability, accidental death, and disruption of employment.
Revolving credit facility: When you sign up for the Citi Debt Consolidation Plan, you’ll also get a credit card with a limit equal to your monthly earnings. Once you repay the DCP in full, your card may be closed or converted to a regular unsecured credit facility.
Higher savings: Expect competitive interest rates that will help you make bigger savings.
Lower Your Interest Burden With This Loan Product
With this Citi loan, you may be able to enhance your savings significantly because along with lower interest payments, the monthly instalment amounts would also become low.
Let’s consider an example. Let us assume that you have a total outstanding debt of S$15,000. You have S$5,000 worth of debt from three organisations, namely American Express, BOC, and DBS. Let us also assume that your monthly charges currently on loans held with the 3 banks are S$700, S$500, and S$1,000, respectively. This means that your currently monthly cost burden is S$2,200. Assuming that your loan tenure under this DCP from Citi is 5 years, your monthly cost burden could come down to S$322.41. That means you’re going to save a neat S$1,877.59 or 85.345% [=(2,200-322.41)/2,200x100].
[Disclaimer: The numbers used here are for illustrative purposes only. The actual results and figures could be different. The names of entities used in this example are also for illustrative purposes and shouldn’t be construed as anything otherwise.]
Fees and Charges That You Should Be Aware of
Cancellation fee: If you want to terminate your loan account or credit facility, you may be charged a cancellation fee.
Prepayment charge: If you’re planning on early repayment of the loan, beware that you may have to pay an early termination fee, which will be charged on the undrawn loan amount.
Late fee: If you fail to pay the instalment amount on time, you’ll have to pay a late fee at the rate mentioned on your letter of approval.
Handling fee: For payments made in foreign currencies, the bank reserves the right to impose a handling fee for any risk that the bank had to bear, exchange risks, bank charges, and commissions paid.
Service/administrative charges in relation to dishonoured cheques and drafts: If a cheque/draft in relation to loan repayment gets dishonoured subsequently, the bank reserves not only the right to debit any amount that is due, from your account but also impose service/administrative charges that it may have had to bear in handling your dishonoured cheque/draft.
Default interest: If an instalment amount is not paid in full within the due date, you shall be charged a default interest until such time as you settle the payment in full.
In addition, you may also have to bear certain expenses on your revolving credit facility. They are :
Finance charges will be applicable at the rate determined by the bank.
An annual fee may be charged every year.
To keep the facility active and to avoid penalty charges, you’ll have to make at least the minimum payment at the end of each billing cycle.
If you fail to clear your dues on time, late charges may be imposed.
Don’t Forget: Your Total Unsecured Debt Must Exceed 12x Your Monthly Income to Be Eligible
A DCP could be your escape route from a life full of debt and liabilities. However, before you jump at the opportunity, you should consider the following points:
You won’t be able to use this unsecured credit facility unless your total unsecured debt in Singapore exceeds 12 times your earnings per month.
If you’re a foreigner without PR status, you won’t be eligible for this programme.
Your annual income can’t exceed S$120,000 and can’t be below S$30,000.
Also, the value of your net assets can’t exceed S$2 million.
Outstanding balances under education loan, medical loan, renovation loan, and loans granted for business purposes, can’t be consolidated under this programme.
Partial consolidation of your outstanding balances isn’t possible.
The credit limit on the revolving credit facility will be fixed at 1x your monthly income. Temporary credit limit increases won’t be granted.
If you want to refinance a DCP loan, you’ll have to wait at least 3 months from the time of approval of that loan before you do so.
Cancellation and administrative charges arising from your decision to refinance your DCP loan, have to be borne by you. There is no provision under which these charges can be consolidated with your new loan.
Any and all information related to your DCP loan will appear on your credit report for 3 years from the time of full settlement.
If you want to ensure that your credit facilities don’t get reflected as “Past Due” on your credit report, make the minimum payment at least on your accounts until your DCP application is approved.
Any request to disburse the loan amount to a savings/current account owned by you won’t be entertained by the bank. Any disbursal will be made directly to the credit accounts that have unsettled dues.
If the approved DCP loan amount isn’t enough to settle the outstanding debt on any of your existing unsecured credit facilities, you’ll be responsible for settling the dues.
Depending on the usage of your card, fees and charges, as stated in the cardmember’s agreement would apply.
Do You Meet the Eligibility Conditions of This Loan?
You may not be eligible for this loan unless you satisfy the following conditions:
You must be a Singapore citizen or permanent resident.
If you’re an existing customer of the bank, you’ll be eligible only if your annual income is greater than or equal to S$30,000 but less than or equal to S$120,000.
If you aren’t a customer of Citi yet, you’ll only be eligible if your annual income is at least S$48,000.
In addition to the minimum income requirement, there is also a maximum value-of-net-personal-asset criterion. You can apply for this Citi loan if the value of your assets don’t exceed S$2 million.
If you want to learn more about the general eligibility criteria for a Citi personal loan, you can click here.
Are you compliant with all the requirements for this loan? Not yet! You’ll still have to furnish a number of supporting documents at the time of application for verification/evaluation purposes. The documents that will be required are as follows:
The latest Income Tax Notice of Assessment (NOA) OR
A statement evidencing your contributions to your CPF Account for the last 12 months. This will apply only to those with a monthly income lower than S$6,000.
Proof of all the statements and confirmation letters related to your existing unsecured credit facilities. Online statements and other invoices that provide proof of unbilled balances, should also be submitted.
Want to Submit Your Application? Here Are the Available Channels
If you’re contemplating whether or not to apply or if you want additional information, you may use one of the following channels:
Enjoy a quick and hassle-free application process on our website.
Call the bank’s dedicated helpline.
Fill in the contact details on the bank’s website. A bank representative may get in touch with you.
Send an SMS to the bank’s dedicated number. The bank will respond in accordance with its prevailing policies and practices.
Still Looking for an Answer to Your Question? Try the Following Frequently Asked Questions
Q. Can I continue to access my existing credit facilities after my application for a DCP loan has been approved?
A. No, you can’t. As soon as you formally apply for a DCP loan, you lose your access to your credit accounts. However, you’ll still be liable to repay the dues in any of them.
Q. I want to refinance my existing DCP loan. Will I get the extra 5% allowance I got with my first DCP loan?
A. No, you won’t. The 5% allowance will only be available for your first DCP loan. If you refinance your loan subsequently, you won’t receive this additional allowance.
Q. Can I choose not to have the credit card or ask for a lower credit limit?
A. No, you can’t. The credit card comes bundled with your DCP loan and is mandatory. However, you may choose not to use it. Also, the credit limit is fixed and can’t be lowered by the bank.
Q. My income has recently increased. Can I request the bank to increase the credit limit on the revolving credit facility?
A. Yes, you may. However, you’ll have to submit the relevant and updated income documents for verification/evaluation.
Q. Can I cancel my card?
A. You may not be able to cancel the revolving credit facility until the time you have settled the dues in your DCP account in full. However, after you have settled the loan, your card will become a regular unsecured credit facility and may be cancelled in accordance with the agreement you have with the bank.