UOB Debt Consolidation Plan Review: Get FREE Personalised Financial Consultation
If your debt burden ratio is quite high, you may be able to salvage the situation by enrolling in a debt consolidation plan (DCP) from UOB. In addition to offering you competitive interest rates and a credit card for management of your expenses, the bank will also offer complimentary consultation to customise a plan and thereby, help you cope with your financial woes. If you’re wondering if this loan product will actually be useful to you, we suggest that you go through the following section to learn some interesting facts about it.
Easy Monthly Payments, Personalised Guidance: Is Value Guaranteed Per Dollar Spent?
Whether you’re investing in a new business venture or taking up a new loan, you should definitely calculate the ROI on time and money. Considering the following features and benefits of this loan can help you in that regard:
Maximum loan amount: Receive a loan that’s equal in value to the principal outstanding you have on all your existing unsecured credit facilities, including fees and interest charges. If this is your first DCP application, you’ll also get an additional 5% allowance. The allowance is meant to be a buffer against incidental charges and fees that may apply to your existing loan accounts until the successful approval of your DCP application.
Minimum loan amount: Your aggregate unsecured debt can’t be less than 12 times your monthly income if you want to be eligible. This means, the minimum value of your loan can’t be less than 12 times your monthly earnings.
Attractive interest rate: Until 31 December 2018, borrow at a flat interest rate of 4.5% p.a. if you’re a new customer and 4.99% p.a. if you’re an existing customer.
Flexible repayment period: Choose a tenure that suits your financial needs from the options available. You can choose to repay the loan over a period of 1 year and up to 6 years.
Credit card: Get a Visa Platinum Card from the bank along with this DCP loan. It can help you manage your daily expenses better. The credit limit on the card will be equal to your monthly income. The card account may be terminated or converted into a regular credit facility after the loan has been fully settled.
Personalised consultation: If you need some guidance to rework your finances and sort out the problems, you’ll receive it from the bank for FREE. You can expect to get a personalised solution from this consultative session.
One payment date: Paying can become easy because once the DCP loan is approved, all your other unsecured loan accounts would be closed and you’ll simply have to make transactions with one lender and make payments through one account. It can be much more convenient to handle one account instead of many.
Enjoy Greater Savings With Promotional Interest Rates
Until 31 December 2018, new customers to the bank can get an applied interest rate as low as 4.5% p.a. and an effective rate of interest of 8.22% p.a. For existing customers during the same period, flat rates will start from 4.99% p.a. and effective interest rate will start from 9.04% p.a. To be eligible, you ought to make sure that your application gets approved by the bank on or before 31 December 2018.
If you’re a new customer, you’ll enjoy the following rates until the expiry of the promotion:
Applied Interest Rate
Effective Interest Rate
If you’re an existing customer of the bank who satisfies the terms of this offer, you’ll enjoy the following interest rates:
Applied Interest Rate
Effective Interest Rate
Keep Your Interest Burden Low With Affordable Interest Payments
The lowest prevailing interest rate on this loan is 4.5% p.a. The effective interest rate starts from 9.04% p.a. To give you a sense of possible savings, let us consider the following example:
Let us assume that you have consolidated debt worth S$10,000 with this loan and you have chosen the 6-year loan tenure. Let us also assume that you’re a new customer who is eligible for the promotional rates. Then, your monthly interest payment would be calculated as follows:
Even though the monthly instalment will remain the same throughout the tenure, your interest burden will keep coming down with every single instalment repayment.
So, for the first month, your monthly interest would be S$68.5 (=10,000x8.22/100/12).
Let us make another assumption. Let us assume that the unbilled balance at the end of the 4th year is S$4,000. Then, the interest for the 49th month would be S$27.4 (=4,000x8.22/100/12). This example shows that even though the monthly instalment payment would remain the same throughout the entire duration of the loan, the interest charges per month would diminish with every instalment settlement.
[Disclaimer: The numbers and assumptions used here are strictly for illustrative purposes only. The actual results could be different.]
Want to Learn More About the Fees and Charges? Here Are the Most Important Ones
To accurately comprehend the affordability of your loan, you’ll need to have an accurate understanding of the interest charges and the fees. We have already discussed interest rates and charges in the previous sections. Let us now focus our attention on the following important fees that may apply to your loan:
The effective interest rate will be calculated on a monthly rest and reducing balance basis and won’t exceed 22% p.a.
A default interest will apply in case you fail to pay the monthly instalment and any other outstanding balance on time. It will continue to be levied until the time you settle the dues in full.
A late charge of S$90 may also apply if your payments are not received by the bank on time.
For early settlement or cancellation of your loan account, a fee of 5% of the outstanding balance, subject to a minimum of S$200, will apply for each scenario.
In addition, you may also have to pay the following charges for your UOB card:
An annual fee.
A late charge, if the minimum payment is not made on time.
Finance charges, based on the terms of usage of the card.
Things You Should Remember: Partial Repayment of Your Loan Is Not Possible
Although the benefits of this loan may seem to be irrefutable, you would nevertheless do the right thing to consider the following points to gauge the real value of this deal:
The bank won’t allow you to make a partial prepayment. Also, you can’t redraw any part of the loan that you may have already settled.
You can’t use your CPF savings to service the loan.
You can’t do a partial consolidation of your unsecured loan dues.
Any request for a temporary increase of the credit limit of your card won’t be accepted.
If your income increases during the tenure of your loan repayment, you can ask for a permanent credit limit increase on your card, provided you can supplement such a request with valid proof.
You’ll be liable to pay any legal or administrative expense in connection to your DCP account and revolving credit facility.
Upon approval of your loan application, the loan amount will be disbursed directly to nominated bank accounts for the purpose of settlement of the outstanding dues.
If the approved loan amount is insufficient to pay for the outstanding balance in your existing loan accounts in full, you’ll be liable for making up for the shortfall in your personal capacity.
If you had issued standing instructions for recurring or GIRO payments in relation to any of the designated accounts, you’ll be responsible for setting up an alternative payment arrangement in agreement with the respective billing organisation.
Do You Satisfy the Eligibility Conditions?
Before you apply, make sure that you meet the following conditions:
You’re a citizen or PR of Singapore.
Your annual income is between S$30,000 and S$120,000 (both limits are included).
Your balance-to-income ratio (BTI) has to exceed 12 at the time of application.
In order to learn about the general eligibility requirements of other UOB personal loans, click here.
You’ll also have to submit the following documents for validation of the information that you have provided:
Copies of the latest statements of your credit card, line of credit, and personal loan accounts that you hold with other banks.
Confirmation letters, if any, that provide proof of any unbilled balances on your purchase instalment plans. You may also be asked to provide online and physical bills and invoices.
In addition, you’ll also have to provide income documents depending on the nature of your employment:
A copy of your last computerised payslip that mentions your salary in Singapore dollars only, if you’re a salaried employee.
If you’re a self-employed professional, you’ll have to provide a copy of your latest Income Tax Notice of Assessment.
Submit Your Application Through a Fast, Efficient, and Hassle-Free Process
If you wish to apply, you can simply fill out an online form available on the bank’s website and submit the supporting documents. The bank will then take up the application for further processing. For more information, you may get in touch with a loan associate from the bank. You can do so by calling the bank’s hotline.
Looking for More Information About the Loan? Check Out the Following Section
Q. Can I apply for a new unsecured UOB credit account?
A. You may apply for a new UOB unsecured loan when the BTI on your existing loan accounts fall below 4 times your monthly income.
Q. When can I apply for new unsecured credit from another lender?
A. You may apply for a new unsecured loan account with another lender when the BTI on your existing accounts touch or slide below 8x your monthly income.
Q. I don’t want a new credit card. Can I ask the bank not to issue it or can I cancel it?
A. As the card is bundled with the loan, you can’t cancel the card till the time your DCP loan account is active. As per the rules of the programme, the bank is mandated to issue a card whether you need it or not. However, you can choose not to use the card.
Q. I am already enrolled in UOB DCP. Can my creditors initiate action against me if I fail to pay off outstanding debt in one or more of my existing credit accounts?
A. Even after your DCP application is approved, you’ll continue to be liable for any unpaid balances in your existing loan accounts. If you fail to pay them down, a creditor has the right to initiate action against you as per their rules/policies/practices.
Q. Can I refinance my UOB DCP loan with another lender?
A. Yes, you can. However, first, you’ll have to wait for at least 3 months from the time of approval before you can approach another lender for refinancing.
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