Cash woes? A personal loan to the rescue!

Need Help With Debt Management? A DMP May Be Your Best Bet!

Are you neck-deep in debt? This is not the time to lose hope. This is when you should gather your wits and act with purpose. Debt can sometimes crawl on you from behind when you’re least expecting it. One small missed payment here on your credit card or one small missed payment there on your personal loan, can take your credit profile beyond redemption, if these misses become frequent. Repeated dents on your credit history can open up a crevice so wide where you may feel obliged to sit up and take note. When such a situation arrives, you may be left with no choice but to opt for some kind of a debt consolidation or repayment plan.

Debt Management Plan

Is Opening a New Line of Credit for Repaying Your Old Debt the Best Ploy? Know All Your Options First

Instead of signing up for a debt consolidation plan without weighing your options thoughtfully, you may enrol yourself in a counselling programme first. This will help you choose your best option after you have carefully analysed your situation.

Thankfully, education and counselling is a built-in feature of Debt Management Programmes, also known as DMPs. They help you pay your unsettled unsecured debts over a period of time, in a manner that is acceptable to you and your creditors. This plan is administered by Credit Counselling Singapore (CCS), a non-government and non-profit debt-counselling organisation and the only one of its type to be endorsed by ABS (The Association of Banks in Singapore).

The best part is that it is a voluntary arrangement agreed upon by you and your creditor(s). Instead of taking a new loan and then paying it down, you can, if allowed by your creditor, enjoy an extended repayment tenure and a lower rate of interest. During this period, you’ll have to repay your debt in instalments. Remember though, it depends on your creditor’s discretion to offer or not to offer such an arrangement. This arrangement is not binding on a creditor under any circumstance. Private debt consulting and counselling agencies in Singapore may be offering similar programmes.

Have You Run Up Debts Secured by Collaterals? You May Not Be Able to Bring Them Under the Ambit of DMP

A debt management programme administered by CCS usually deals with unsecured debt such as personal loans, overdrafts, and revolving debts such as credit card debts, only.

Secured loans such as car loans and mortgage loans, may not be accepted under DMP run by CCS. However, the CCS website clearly states that if a collateral is sold and the selling price fails to cover the dues in full, such amounts may be considered along with other unsecured debts for assessing your debt situation. If you’re planning to approach a private debt management and consulting firm, make sure to find out their position on unsecured loans. Sometimes, even unsecured loans such as student loans may not be accepted under a DMP setup.

Wondering Which Debt Management Programme to Apply For? CCS DMP May Offer You More Than the Rest

To CCS, a non-profit organisation, you’re not just an account/client. The aim of this particular programme is to educate you about the perils of debt build-up, help you know all your options, and help you get into a settlement plan that works in the mutual interest of your financier and you.

Debt Management Programme

Also, rest assured knowing that the confidentiality of your personal details will be protected at all costs. Even if there is a need to publish your details to concerned parties, partially or in whole, it will only be done with your permission and absolute knowledge. While the details will be made available to the Credit Bureau of Singapore, as mandated by Singapore laws, details of your DMP status won’t appear on public record. Only you and the participating financial institutions can access your credit report.

Also, the charges, wherever applicable, are nominal in comparison to other administrators of DMP. The registered agency charges S$30 for a counselling session. Under most circumstances, you won’t require more than one such session. Although completely up to the discretion of the creditors, CCS can also intervene and help deserving candidates in securing lower interest rates from their creditors.

What Is CCS Info Talk? How Can It Help You?

Now, comes the best part. Even before you enter the debt repayment arrangement, you’ll be offered a free introductory session called the Info Talk. In this approximately 2-hour session, you’ll be offered a general view of your condition, taken through your best available options, and the services you can get from CCS. You can also bring your companions to this session.

You’ll also learn about the various debt collection provisions and methods available to your creditors, the governing laws, the rules stipulated by various lenders, and how you can chart your general course plan. If you’re wondering why you should attend this introductory session when you can directly be at a counselling session, the answer is simple. Counselling sessions are not meant for the basics of debt collection and management. Moreover, this introductory session is mandatory. You need to attend it first to take the process forward.

When you walk into such a session, you’ll be expected to have a fair understanding of your situation, options, expectations from the programme, and the regulations. This first session may help you decide whether you need further counselling or not. If you have a pending lawsuit filed by a creditor, you may request the counselling agency to prepone your counselling session, at this first meet.

Such Info Talk sessions are conducted throughout the year, except for certain festive seasons and public holidays. You may register for an introductory session from the organisation’s website.

Does DMP Sound Interesting? Check Your Eligibility First


Being eligible for a DMP is not easy. You’ll have to prove that your current income generates enough surplus to make regular and timely payments to the creditors, without any need to cut down on your basic living expenses. The important details and eligibility criteria for a DMP, is usually extensively discussed at Info Talk sessions.

Planning to Put Up a DMP Administered by CCS? Follow These Steps:

Debt Administered by CSS

Step 1: Attend Info Talk.

Step 2: Have you decided that DMP is the best way forward for you? Then you’ll have to fill out a counselling request form, provide supporting documents, and make relevant data available to help CCS evaluate your financial situation. Once your suitability for a DMP has been established, you’ll be alloted a date.

Step 3: During such a counselling session, you’ll be made aware of all your options. You’ll be encouraged to consider all your options and explore the one that suits you best. Meeting the requirements of DMP, in no way, guarantees your acceptance into the programme.

Step 4: Once you have expressed your willingness to put up a DMP and CCS has approved your request, it will process and prepare a DMP proposition/plan, which will then be made available to your creditor(s) for review and their final approval.

Want to Opt for DMP? Take These Points Into Consideration Before You Proceed Further:

  • DMP is not a scheme to reduce your interest payments. It may only be helpful if you’re genuinely in a situation where repaying your debts is impossible without concessions of some form.
  • Even if a lower rate of interest is negotiated or certain fees are waived, most creditors may not want to waive off or reduce your outstanding balance.
  • If you have outstanding balance on loans from an overseas financier, you won’t be able to put it up for DMP. Only debts incurred with financing institutions based in Singapore, will be considered by CCS.
  • During the period you’re enrolled in a DMP, a note pertaining to the same, will appear on your credit report. While the note, in itself, may not be detrimental to your score, inability to honour the arrangement i.e. service the outstanding debt, may severely impact your score.
  • Once an agreement has been cast in stone, defaulting on payments may have far-reaching consequences. Your creditors may end the agreement and levy interests at much higher rates of interest – something that will cancel out the positive effects of the arrangement.
  • If you have signed up for a debt management programme, you may not be able to borrow any further, till the time the programme is active. This could be especially difficult at a time when cash flow is already unstable.

What Are Your Other Options?

Debt Management Options
  • Debt Consolidation Plans (DCP): If necessary, you can take a new line of credit from one of the 14 participating institutions in Singapore, consolidate your old debts, and use the new loan to settle the debts. Certain categories of unsecured debts may, however, be excluded from this programme. Refer to the ABS website for the eligibility requirements.
  • Debt Repayment Scheme (DRS): This is a pre-bankruptcy arrangement. You may enter a debt repayment plan with your creditor(s) under this scheme, if your unsecured debt is less than or up to S$100,000. Under this arrangement, a creditor may make concessions such as lower interests and even balance reduction. However, as a debtor, you’ll have to ensure that the balance agreed upon is cleared within the fixed period, not exceeding 5 years. This Ministry of Law webpage will tell you more.
  • Bankruptcy: This is often the last resort. If you can’t settle a debt that exceeds S$15,000 in value and you have been declared financially insolvent by the High Court, you become eligible for this arrangement. An Official Assignee will be responsible for liquidating your assets and using the proceeds to settle your debts, and other claims made by your creditors and approved by the court overseeing the procedure.

An unhealthy debt burden ratio means restrictions, challenges, and unfilled desires. While nobody probably becomes debt-ridden on purpose, once there, turning over a new leaf can become extremely difficult. It’s best to avoid such a situation. However, if you think that paying double-digit effective interest rates on your credit cards and personal loans are becoming unsustainable, look for a debt management programme, if you’re eligible for one. If a debt-ridden person is likened to a drowning man, then DMP has to be the proverbial straw!

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