Best Credit Card Refinance Loans: Your Path To Financial Stability – Credit 21 Pte. SL. is a licensed moneylender (license no. 46/2023) registered with the Moneylenders Registry under the Ministry of Law, Singapore.
If you have a lot of debt that you can’t pay no matter how hard you try, a debt consolidation loan may be a worthwhile option to consider.
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What is debt consolidation? How do debt consolidation loans work? Is a debt consolidation plan worth it? Where can you get a loan consolidation plan from a lender?
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A Debt Consolidation Plan (DCP) is a structured program that helps people with multiple debts consolidate all their debts into a single loan, often at a lower interest rate.
This means you don’t have to pay parts of your monthly payment to multiple financial institutions. Instead, you make a full monthly payment to a financial institution.
DCPs are offered by banks and other financial institutions. You can get debt consolidation loans from licensed lenders, but rates vary.
A debt consolidation plan can be of great help to those who have debts with various financial institutions. Of course, it’s easy to miss a payment or two when you owe so much.
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With a DCP, you only need to make one payment at an institution of your choice. This makes it easier to manage all your loan payments.
When your personal and credit card debt snowballs several times your salary, then debt consolidation is the best option for you.
First, you need to find a lender who is willing to give you a debt consolidation loan based on your financial situation and the amount you owe.
Next, you’ll need to provide information about your loans, including outstanding balances and interest rates. The debt consolidation plan lender will use this information to calculate how much money you need to borrow to pay off all of your debt.
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Never use an interest-paying loan to pay off a non-interest-bearing loan. Debt consolidation plans can help you pay your bills without incurring interest.
Since you can refinance home and auto secured loans, they do not qualify for this type of plan.
You should keep in mind that debt consolidation only works depending on certain factors. These include your budget, your financial situation, and whether you’re sticking to your debt tracking plan.
It makes managing multiple debts easier by consolidating multiple debt payments into one debt consolidation plan.
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Another advantage is that DCP saves time. Instead of making multiple payments to different lenders, you now have one financial institution to make your payments to.
Third, if you pay to different financial institutions, the possibility of paying high interest rates is inevitable. A debt consolidation plan from a lender can go a long way in reducing your interest rate significantly.
Finally, a DCP can improve your credit score by lowering your credit utilization ratio. This will be reflected on your credit report. Banks and lenders will consider this before approving your loan application.
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A debt consolidation plan may have additional costs in the form of initial fees. Return shipping charges, annual fees and closing costs may also apply.
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While it sounds like a smart idea, DCP doesn’t solve the underlying problem. Regardless of whether you have applied for a debt consolidation plan or not, your financial problems owing money to various financial institutions will remain the same until you take appropriate action.
Some borrowers who have seen the benefits of a debt consolidation plan have deeper financial problems than before they accepted their DCP. Due to complacency, they ended up owing more than before DCP.
So don’t think that you are just a debtor now and can use the rest of your money. If you’re not careful, you’ll end up with even more debt.
Once your DCP is approved, we will charge you an additional 5%. This additional amount will help cover additional fees and late fees that may occur.
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Depending on the financial institution you deal with, the approved debt settlement amount may be less than or equal to the amount you owe the financial institution.
In most cases, the financial institution you apply to will do everything they can to help you pay off your debt.
However, they depend on many things, such as your current situation and of course your total monthly income. These factors can make your DCP approval and future loan difficult.
Once your debt consolidation plan is approved, you will no longer be able to apply for loans or credit cards or use unsecured credit facilities.
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This does not mean that you will not have access to money, because the financial institution will give you a revolving loan that you will use to carry out your regular financial operations.
You may decide to work with another agency to consolidate your debt. But for that you have to wait at least 90 days.
Prepayment penalties or fees may also apply. Be sure to consult your financial professional before making any decisions.
Once your application is approved, you only need to make one monthly payment to the debt consolidation lender, instead of making multiple payments to different creditors.
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If you think a debt consolidation plan from a lender isn’t a good idea, there are two options to consider:
Debt Consolidation Loans: If you can’t qualify for a debt consolidation plan, try applying for a debt consolidation loan from a licensed lender. The barriers to entry are much lower.
Balance Transfer: Helps consolidate payments on different credit cards. This is usually a short-term opportunity that allows you to take four times your monthly salary.
Line of credit: DCP is one of the best options because you are only charged interest on the amount borrowed. A line of credit is for financial emergencies and has no fixed term.
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A debt consolidation plan from a lender is the right option for you if you are struggling to make your monthly payments. The most important thing about DCP is that it helps you pay less interest, manage your debt better and improve your credit score.
Don’t struggle alone when we can help you. At Credit 21, we are committed to helping you achieve your financial freedom.
We are a trusted lender in Singapore that offers some of the cheapest interest rates and fees. We are located at 10 Anson Road # 01-07 International Plaza, three minutes walk from Tanjong Pagar MRT station. Whether you’re trying to choose your first credit card or looking to add your next credit card to your portfolio, the choice is yours. The right card can be tricky. There are different types of credit cards available to consumers that offer different benefits, and choosing the wrong type of card can result in you receiving benefits that are never used. For this, it is important to learn how to choose the best credit card based on your spending habits.
The first thing to consider before considering different credit cards is to check your credit. All credit cards will have a recommended credit score, and applying for a card that you don’t have will result in a hard inquiry on your credit for no reason. Check your score, and narrow down your list of potential credit cards to the ones that match your score.
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As mentioned, learning how to choose the best credit card is all about matching your personal spending habits to the type of credit card you are considering. Below are some of the more popular credit card categories you may be familiar with:
The first and most common type of credit card is the direct cash credit card. This type of card offers a flat rate, typically 1% to 3% cash back on all purchases made with the card. This means that a person who spends $10,000 with a cashback card will get $100 to $300 back. When choosing the best credit card, it should be noted that this type of card is best suited for those who do not want to waste time deciding which card to use and which type of purchase.
Rewards credit cards are those that offer different interest rates with points or cashback, sometimes permanently, in different categories. For example, a rewards credit card might offer 5% on grocery purchases, 3% on drugstore purchases, and 1% on all other spending.This type of credit card is ideal for eclectic shoppers. Find the category that gives you the most points and match it to your spending habits.
A travel credit card awards points to purchase travel-related goods. These may include purchasing airline tickets, hotels, parking and other similar categories. Always on the go looking for company employees
