Struggling to repay your debts on multiple credit cards, personal loans, and lines of credit? Your worries could be a thing of the past if you can find a good debt consolidation programme to consolidate your debts. HL Bank DCP could be one of your considerable options. With this loan, you’ll not only enjoy the convenience of making fixed monthly payments to a single bank instead of having to deal with many different lenders, you may also succeed at reducing your interest burden appreciably. By reducing your monthly payment liability, you may soon become debt-free.
Low Interest Rate, Flexible Tenure: Features and Benefits That You May Really Like
If you’re thinking if HL Bank is the right bank to approach, you may first want to learn about the benefits that you may enjoy before taking a call. The following is the list of features and benefits that the HL Bank DCP loan provides:
Maximum loan amount: The DCP amount would be the outstanding dues you have on all your existing unsecured credit facilities combined. If it is, however, your first DCP application, you’ll also receive a 5% additional allowance. This allowance is meant to provide you with a bigger elbow room to cover for any incidental charges that may be charged on any of your existing credit lines between the time of application and approval. This allowance won’t be available for any subsequent refinancing.
Minimum borrowing amount: The value of the loan has to exceed 12 times your monthly income.
Single payment: Enjoy greater convenience and improved cash flow with this loan because you’ll have to make one payment per month only. Some of the obvious benefits could be not having to remember multiple due dates and not having to issue multiple standing instructions.
Affordable interest charges: The applied interest rate on this loan starts from 3.5% p.a. and the effective rate starts from 6.63% p.a. Even though the size of your debt may not shrink immediately after you sign up for this programme, it can become smaller much faster over time because your interest payments are expected to come down significantly.
Flexible repayment period: The loan tenure can be from 1 year to 10 years. Higher loan tenure can mean lower monthly payment.
Revolving creditarrangement: Get a line of credit from HL Bank along with this loan. The limit on this credit facility will be equal to your monthly income. This line of credit can help you manage your expected and unexpected expenses better.
Automatic suspension of accounts: As soon as your HL Bank DCP application is approved, your existing loan accounts will be suspended. You won’t have to separately approach and inform your creditors. HL Bank will inform them of the arrangement and disburse money directly to the concerned creditors for settlement of the dues.
Looking for a Low-Cost Loan? Lower Interest Charges on This Loan Might Help You
With this loan, you may be able to reduce your interest burden and give yourself a chance to become debt-free faster. You’ll enjoy the following interest rates on this loan:
Applied Interest Rate
Effective Interest Rate
Interest is generally calculated by the bank on Rule 78 basis. However, the bank may apply new rates or change rates at its absolute discretion.
Let Us Illustrate
If your outstanding balance on a credit card is S$15,000 and an EIR of 25% applies on it, your interest liability for 1 year would be S$3,750 (=25/100 x 15,000). If you consolidate your debts worth S$15,000 with this loan at the lowest effective interest rate of 6.631% p.a., your interest payment for 1 year would be S$994.65 (=6.631/100 x 15,000). Therefore, you can save S$2,755.35 or 73.5% [=(3,750-994.65)/3,750x100] approximately on interest charges by switching to this debt consolidation programme.
[Disclaimer: The numbers used here are for illustrative purposes only. Any attempt to find similarities between this example and reality can be fallacious.]
Fees and Charges That May Apply to Your Loan
Apart from the interest charges, the fees payable also determine the affordability of a loan. Here are the fees and charges that you may have to pay for this HL Bank loan:
1.5% of the approved loan amount, subject to a minimum of S$300
5% above the prime lending rate of the bank
Early Settlement Fee
3% of the outstanding due, subject to a minimum of S$300
The following fees/charges may apply to your revolving credit arrangement (line of credit):
Minimum Monthly Payment
3% of the statement balance, subject to a minimum of S$30
Normal Finance Charge
10% above the bank’s prime lending rate, subject to a minimum of S$5 per month
Finance Charge on Late Payments
20.88% p.a. on the outstanding debit balance
Keep in Mind: The Revolving Credit Facility Is Not Available for Free
While this DCP loan can possibly extract you from a sticky situation and inject stability into your life, you should consider the following points carefully before you submit a formal application:
An annual fee will apply to the revolving credit facility that you’ll be offered. Depending on your transactions, other fees and charges may also apply.
You can’t consolidate your debts partially.
Records of your loan transaction will stay on your credit bureau report for 3 years after the termination of your account.
If you have sufficient funds, you can settle the loan early. However, you may be charged a prepayment fee and administrative/legal charges, if any.
You’ll have to make alternative payment arrangements for the respective billing organisations if you had issued standing instructions for automatic debit from one or more of your designated account(s) before your DCP loan application approval.
Even after your DCP loan application has been approved, you’ll still continue to be liable for any outstanding balance on your existing unsecured credit facilities if the loan amount is insufficient.
Your request for a temporary credit limit increase on the revolving credit line won’t be granted till the time you’re on DCP.
All your designated loan accounts will be suspended once your DCP loan application is approved. You’ll also not be allowed to apply for a new credit facility from another bank until your BTI or balance-to-income ratio (cumulative outstanding balance + interest/monthly income) comes down to 8 times your monthly income.
Outstanding balances in any existing education loan account, medical loan account, renovation loan account, business loan account, or joint loan account can’t be consolidated under this programme.
Are You Eligible for This Loan?
Before you submit your application, ensure that you meet the following eligibility criteria:
You’re a permanent resident or a citizen of Singapore.
Your age is between 25 years and 65 years.
You earn more than or equal to S$30,000 and below S$120,000. Also, the value of your net personal assets should be less than S$2 million.
The total outstanding dues on your existing unsecured credit facilities should be greater than 12 times your monthly income.
If you want to know more about the eligibility conditions for HL Bank Personal Loan, click here.
What Are the Documents That You Have to Submit?
You’ll have to furnish the following documents at the time of application:
Your completed application form.
A copy of your NRIC (both sides) if you’re a citizen and a copy of your NRIC (both sides) and your passport if you’re a PR.
Charge slips, invoices, and online statements showing your unbilled balances.
Confirmation letters providing proof of billed and unbilled purchase instalment plans, if any.
Any other relevant document providing account information and proof of balances.
You’ll also have to provide the following income documents depending on your type of employment:
Most recent electronic payslip, issued within the last 3 months, and Income Tax Notice of Assessment.
Statements showing your contribution to your CPF Account over the last 1 year. If you earn more than S$6,000 p.a., you’ll have to provide your CPF Contribution History Statement because the bank will use it to decide on your credit limit.
Self-employed professional or commissioned employee
Income Tax Notice of Assessment for the last 2 years.
Apply Conveniently Using Any of the Following Modes
You have the following optliions available to you for application:
Submit your application on our website.
Visit the Tanjong Pagar Centre branch of HL Bank and meet a relationship manager to complete the process.
Want More Information? Check The Following Questions and Answers
Q. How long will the bank take to process my application?
A. In general, the bank will take between 7 working days and 14 working days to process your application. This estimation is, however, based on the assumption that you have provided all the necessary supporting documents at the time of application and the bank doesn’t need additional information from you.
Q. How long will the bank take to inform my existing creditors of this arrangement and when will it disburse the loan after the approval of my application?
A. HL Bank may take anywhere between 5 business days and 7 business days to inform your existing creditors of this new debt arrangement and disburse money to repay the loans.
Q. I have a DCP loan from HL Bank. When can I apply for a new unsecured credit facility with the bank?
A. You can borrow a new unsecured loan from HL Bank only when your balance-to-income ratio goes below 4. Balance-to-income ratio is the ratio between your total outstanding unsecured debt and your monthly income.
Q. I am enrolled in the RAS programme already. Can I apply for this DCP loan?
A. Yes, you can. The outstanding balances from your RAS scheme account will be transferred to your DCP loan account after approval.
Q. I already have a DCP loan with another bank. Can I refinance it with HL Bank?
A. Yes, you can. However, you can cancel your current DCP only after 3 months of its approval before you can opt for refinancing.