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HSBC is a leading financial institution enjoying a strong presence not just in Singapore but across the globe as well. The bank offers a range of financial products and solutions including offering customers various types of credit. The Debt Consolidation Plan from HSBC is one such loan product that allows borrowers to consolidate their unsecured credit such as credit card balances, personal loans and personal lines of credit from other banks and financial institutions into one consolidated loan.
Let us learn more about the HSBC’s Debt Consolidation Plan.
The HSBC Debt Consolidation Plan offers the following tenures and interest rates:
|Tenure||Equivalent Flat Interest Rate||Effective Interest Rate|
|1 year||7.6% p.a.||15.7% p.a.|
|2 years||7.5% p.a.||14.8% p.a.|
|3 years||7.6% p.a.||14.5% p.a.|
|4 years||7.7% p.a.||14.3% p.a.|
|5 years||7.8% p.a.||14.3% p.a.|
|6 years||7.9% p.a.||14.2% p.a.|
|7 years||8.1% p.a.||14.1% p.a.|
|8 years||8.9% p.a.||15.1% p.a.|
|9 years||9.1% p.a.||15.1% p.a.|
|10 years||9.2% p.a.||15.1% p.a.|
The HSBC Debt Consolidation Plan consolidates all other existing lines of unsecured credit. Let us assume a borrower has the following lines of credit:
|Type of Credit||Outstanding balance||Interest rate||Monthly payment|
|Credit card 1||S$15,000||26% p.a.||S$500|
|Credit card 2||S$10,000||26% p.a.||S$400|
|Personal loan||S$15,000||14% p.a.||S$500|
Now if we assume the borrower has a monthly salary of S$3,000, we can see that the monthly payments of the borrower amounts to S$1,400 which is almost 50% of the monthly salary. If the borrower was to go for an HSBC debt consolidation loan, he/she would receive a loan amount of S$42,000 (5% allowance included). The monthly payment for a tenure of 5 years would amount to S$861.69, giving the borrower savings of S$6,641.23 in interest payments alone.
Note: The figures have been simplified for an illustrative purpose and actual figures would vary based on the rates given.
The applicant must provide the following documents at the time of application:
Borrowers can apply for the HSBC DCP either online by downloading the application form, completing it and uploading it on the HSBC website along with the required supporting documents.
Alternatively, borrowers can also visit their nearest HSBC branch and apply for the Debt Consolidation Plan in person.
Whatever balance remains unpaid after the DCP loan amount has been disbursed needs to be cleared off by the borrower with the respective financial institution.
The revolving line of credit comes bundled with the DCP account but the borrower can choose to not use it.
No, the credit limit offered on the revolving line of credit cannot be increased. It is fixed at the borrower’s 1X monthly income. However, if the borrower’s income increases, they can apply for a permanent credit limit increase by submitting revised income documents.
A borrower can hold only one DCP at a time regardless of which financial institution they have acquired it from.
No. The amount will be used to settle outstanding unsecured balances with respective financial institutions directly and will not be disbursed to the borrower.