UOB is a leading bank in Singapore enjoying a strong presence in the surrounding regions as well. They offer a range of financial products and solutions ranging from wealth management and investment products to offering customers lines of credit. The Debt Consolidation Plan (DCP) from UOB is an unsecured loan product with the sole purpose of allowing borrowers to consolidate their other lines of unsecured credit. These could range from credit card balances to uob personal loans and personal lines of credit from one or multiple financial institutions.
Features and Benefits
The features of the UOB debt consolidation loan are as follows:
- UOB’s DCP allows borrowers to repay their existing loans and manage only one instalment.
- The plan offers financial stability to the borrower by providing them with only one fixed repayment throughout the tenure of the plan.
- The plan comes with a tenure of up to 6 years allowing for greater ease of repayment.
- The interest rates offered by the debt consolidation plan are lower than other lines of unsecured credit making it easier to consolidate and pay off existing loans.
- The debt consolidation loan allows borrowers to consolidate multiple sources of loans such as credit cards, personal line of credit or personal loans. These loans can be consolidated even if they are from different financial institutions.
- The plan comes with a revolving line of credit in the form of a free UOB Visa Platinum Card which provides borrowers a credit limit equal to that of their monthly salary.
UOB DCP Interest Rates
- The interest rate is 4.99% p.a. for a period of up to 6 years.
- The EIR (Effective Interest Rate) is 9.04% p.a. for a period of up to 6 years.
The bank will charge a default interest rate in case you have late fee, repayment amount or other fees to be paid. This rate will be charged from the day you default your payment and is set as the bank decides.
- Borrowers can be either a Singaporean citizen or a Permanent Resident.
- The minimum annual income required to apply for the debt consolidation loan is S$30,000.
- The annual income of the borrower must be below S$119,999 in order to qualify for the debt consolidation loan.
- The total interest-bearing balance of the borrower's existing unsecured lines of credit must exceed the borrower’s monthly income by at least 12 times the amount.
- The applicant must provide the following documents at the time of application:
- A copy of the NRIC both front and back
- A copy of the most recent Credit Bureau Report
- A copy of the computerised payslip (most recent), CPF contributions and Income Tax Notice of Assessment
- The applicant must submit his/her most recent credit card and unsecured credit loan statements
- A confirmation letter showing the unbilled balances of unsecured credit instalment plans (if applicable).
UOB Debt Consolidation Loan Calculator
The UOB DCP consolidates all other existing lines of unsecured credit. Let us assume a borrower has an overall outstanding debt of S$40,000 and earns a monthly salary of S$4,000. This debt could be made up of 3 credit card balances and one personal loan. If all of the borrower’s monthly payments amounts to S$2,000 then the borrower will be spending 50% of his salary towards servicing these debts.
If the borrower was to go in for the UOB DCP, take a loan amount of S$40,000 to clear out the existing loan and choose a tenure of 5 years, the borrower will only have to pay a monthly instalment of S$917.31.
The above illustration has been simplified for ease of understanding. Actual rates and numbers will vary based on the EIR the bank offers at the time of getting the debt consolidation loan.
How to Apply for UOB DCP Loan
- Borrowers can apply for the UOB DCP either online by downloading the application form, completing it and uploading it on the UOB website along with the required supporting documents.
- Borrowers can also walk into their nearest UOB branch and apply for the Debt Consolidation Plan.
Will the debt consolidation loan amount cover the entire outstanding balance of unsecured lines of credit?
Based on how much of a loan amount the borrower is eligible for, that amount only will be granted by the DCP. Any amount still outstanding after the debt consolidation plan has been disbursed needs to be paid off by the borrower.
Can one choose not to take the revolving credit line?
The revolving line of credit comes as a bundle with the DCP but is not mandatory to be used. Borrowers can choose not to use the revolving line of credit if they so wish.
How can one increase the credit limit?
The credit limit can be increased by submitting the corresponding income documents showing an increase in the monthly salary.
Can a borrower apply for multiple Debt Consolidation Plans?
No. At any given point of time a borrower can hold only one Debt Consolidation Plan, regardless of the financial institute they apply it from.
Is the amount disbursed directly to a specified savings or current account?
No. The amount will not be disbursed to the borrower or any savings account but instead will be disbursed directly to the financial institute where the unsecured outstanding credit line is present.