HL Bank Debt Consolidation Plan

    In the last few months, you have probably heard time and time again about personal debt rising in Singapore. In fact, relative to what they earn, Singapore households are among the most indebted in Asia. This doesn’t mean doom and gloom because there are ways through which your personal finance can be kept in control. Debt consolidation loans are an effective way to ensure that you can repay your debt at low interest rates over a period of time that suits you best.

    HL Bank Debt Consolidation Plan (DCP) allows you to combine all of your outstanding credit from credit cards, lines of credit or the balance on any of your personal loans (except for balances on renovation loans, medical loans, education loans, and staff benefit loans). This plan tries to ensure that you will be able to live a life free of debt.

    Features and Benefits

    • Interest rates for the plan start from a low rate of 3.5% p.a.
    • All your debt payments have to be made to a single bank. This makes repayment convenient and easy.
    • You can repay your debts over a period of up to 10 years so that you aren’t financially burdened.
    • You have the ability to significantly reduce the amount that you currently pay each month for your debts. This way you can clear your debts faster.
    • A revolving credit facility with a credit limit equivalent to your income each month will be opened along with the debt consolidation plan. This revolving credit facility can be used for your daily expenses.

    How HL Bank Debt Consolidation Plan Works

    Let’s assume that you have a debt of S$100,000 with 5 separate financial institutions. This outstanding amount requires a minimum payment of S$3,000 each month across all 5 of the institutions. On applying for HL Bank DCP for the first time, the debt amount is consolidated and a revolving credit facility is set up. Allowing for a buffer amount of 5%, your total credit amount would be S$105,000. If the repayment tenure of your DCP is 10 years and the interest rate is 3.5% p.a., then the amount you end up paying every month would be S$1,182. So effectively, you end up saving nearly S$1,818 per month.

    Eligibility Criteria

    To qualify for HL Bank’s debt consolidation loan, you need to meet the following eligibility criteria:

    • You should be a Citizen of Singapore or a Permanent Resident.
    • You should be at least 25 years old. The maximum age limit to apply for this plan is 65 years.
    • Your net personal assets should be less than S$2 million and your annual income should be at least S$30,000 but not above S$120,000.
    • Your total debt, along with the interest payable, on your credit cards and other unsecured credit facilities that you hold with any financial institution in Singapore, should be more than 12 times the income you earn each month.

    Documents Required

    At the time of application for a DCP, you need to have the following documents:

    • Citizens need to provide a copy of both sides of their NRIC at the time of application. Permanent Residents need to submit a copy of both sides of their NRIC along with a copy of their Passport.
    • If you are a salaried employee, then you need to provide payslips for the last 3 months as well as your latest Income Tax Notice of Assessment. Along with this, you need to provide your CPF contribution statement for the last 12 months.
    • If you are self-employed, then you need to submit your Income Tax Assessment Statement for the last 2 years.
    • Proof of credit card balance, a line of credit or personal loan amounts that need to be paid to various financial institutions also should be provided at the time of application.

    How to Apply

    You can apply for HL Bank debt consolidation loan by filling up the enquiry form on the bank’s official website. Alternatively, you can visit their branch office at Tanjong Pagar Centre and speak to a relationship manager. You can also call HL Bank’s customer service at +65 63498 330 or send an email to Call-Centre@hlbank.com.sg.


    Q. Why is a 5% allowance added to my total debt amount?

    A. This allowance of 5% is added to cover any charges such as processing fees and approval fees that are incurred until your DCP is approved.

    Q. Is the 5% allowance a choice?

    A. If you are taking a debt consolidation loan for the first time, then this allowance is mandatory. For DCP loans that are refinanced, this allowance will not be applicable.

    Q. Is the revolving credit facility mandatory?

    A. This facility comes bundled with the DCP, but making use of it isn’t mandatory.

    Q. If I apply for a DCP and it hasn’t been approved yet, can I still use credit facilities like my credit card?

    A. No. Once you have applied for a DCP, you cannot use any unsecured credit facility that you may have. If you do use any existing credit facility, and the approved DCP amount is not enough to clear your debts, then you will be liable to repay the extra debt that has been incurred as per the terms of the lending institution.

    Q. I have applied for a DCP but it hasn’t been approved yet. Do I still need to make monthly repayments to the financial institutions from whom I have borrowed unsecured credit?

    A. Yes. Until your application is approved, you are liable to make all payments for your debt as per the terms set by each institution.

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