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 personal loans and personal lines of credit from one or multiple financial institutions.
The features of the UOB debt consolidation loan are as follows:
The UOB debt consolidation loan offers the following interest rates starting from as low as 6% p.a. The effective rate of interest of the plan begins at 10.72% p.a. with tenures going up to 10 years. The instalment amount to be paid every month is fixed but the principal and interest component of the instalment amount will vary.
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.
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.
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.
The credit limit can be increased by submitting the corresponding income documents showing an increase in the monthly salary.
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.
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.