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OCBC is one of the leading banks in Singapore offering a range of financial products and solutions.The Debt Consolidation Plan from OCBC is an unsecured loan which aims to help borrowers consolidate and repay their other lines of unsecured credit.
The OCBC debt consolidation plan comes with an Applied Interest Rate of 6% p.a. The Effective Interest Rate (EIR) which is inclusive of processing fees starts as low as 10.46% p.a.
The plan offers tenures going up to 8 years. While the instalment amount of the debt consolidation loan remains fixed, the principal and interest component of the instalment varies.
Let’s say the borrower has 3 outstanding credit card balances from 3 different banks. Let us assume the total outstanding balance of all 3 cards come up to S$30,000. Assuming the interest charges of this is 26% p.a., the borrower would be paying a total interest of S$7,800 a year. If the tenure of these outstanding balances takes 8 years to clear, the borrower would have paid S$62,400 in interest alone.
If the borrower went in for the OCBC Debt Consolidation Plan they’d be taking a loan of S$31,500 (inclusive of allowance). If the tenure chosen is 8 years, they’d be paying an interest of only 10.46% p.a., which amounts to S$3,276 per year or S$26,208 over 8 years. This would give them a significant amount of savings on interest.
The above example has been simplified for illustration purposes and actual rates of interest, and monthly instalments will vary based on the loan amount taken, tenure chosen, and the rates offered.
You can apply for the OCBC DCP through the following ways:
A. The OCBC Platinum Card offered with the debt consolidation plan charges no annual fee.
A. The card charges an interest rate of 25.9% p.a. on card transactions, 28.92% p.a. on cash withdrawals, a cash withdrawal fee which is the higher of S$15 or 6% of the amount withdrawn and a late payment fee of S$80.
A. No. The card comes as a bundle package with the DCP account but one can choose not to use it.
A. No. The credit limit cannot be increased. Only if the monthly salary of the borrower increases can they request for a credit limit increase on their card.
A. No. The DCP loan amount is disbursed directly to the bank the borrower has a debt with. The DCP will aim to clear out all outstanding balances of the borrower directly with the corresponding bank and any amount that exceeds the DCP loan must be cleared out by the borrowers themselves.