Key Takeaways
- Services Offered: Credit Counselling Singapore (CCS) provides debt management talks, financial counselling, Debt Management Programme (DMP), and Enterprise Credit Counselling for business owners.
- Eligibility: Suitable for individuals with unsecured debts above $10,000 or struggling with repayments.
- Benefits: Access to structured repayment plans, reduced interest rates, and financial literacy workshops.
- Alternatives: Debt consolidation plans, personal loans, or bankruptcy as a last resort.
- Impact: Participation in DMP reflects on credit reports but promotes long-term financial recovery.
When faced with overwhelming debt, many Singaporeans feel lost and unsure of where to turn for help. Credit counselling is a valuable resource that provides financial guidance and support to individuals struggling with debt management. In this article, we will explore credit counselling in Singapore, the services offered by Credit Counselling Singapore (CCS), and when to consider seeking their assistance.
Table of Contents
What Is Credit Counselling in Singapore?
Definition of credit counselling
Credit counselling is a service that provides financial guidance and support to individuals who are struggling with debt management and budgeting. The goal of credit counselling is to help borrowers better understand their financial situation and explore options for addressing their unsecured debt problems.
Role of Credit Counselling Singapore (CCS)
Credit Counselling Singapore (CCS) is a local non-governmental organisation recognised by the Association of Banks in Singapore (ABS). CCS plays a crucial role in providing credit counselling services to Singaporeans facing financial difficulties.
Objectives of CCS in helping borrowers
The primary objectives of CCS are to:
- Help borrowers regain control over their finances
- Educate individuals on financial literacy and responsible credit use
- Facilitate debt repayment arrangements between borrowers and creditors
- Provide support and guidance throughout the debt management process
Looking for ways to settle your debt besides credit counselling? Learn about your options here.
What Are The Services Offered By Credit Counselling Singapore (CCS)?
Assistance with unsecured debt problems
1. Information talks on debt management
CCS offers free information talks on debt management, covering topics such as addressing debt problems, negotiating with creditors, and approaching CCS for help. These talks are held regularly and serve as a good starting point for those seeking guidance on managing their debts.
2. Financial counselling sessions
One-on-one financial counselling sessions are available at CCS for a nominal fee of S$30. During these sessions, a financial counsellor will assess your financial situation and help you explore the best course of action to address your debt issues.
3. Debt Management Programme (DMP)
The Debt Management Programme (DMP) is a structured debt repayment arrangement facilitated by CCS between borrowers and their creditors.
To be eligible for DMP, you must:
- Have unsecured debts with more than one creditor
- Have total unsecured debt of at least S$10,000
- Have accounts with banks that are at least one year old
Benefits of DMP include potentially lower interest rates and extended repayment periods. However, it’s important to note that while on DMP, your credit cards and credit facilities will be terminated, and your credit report will reflect your participation in the program.
4. Enterprise Credit Counselling Programme (ECCP)
The Enterprise Credit Counselling Programme (ECCP) is designed to help small business owners who are in debt understand their obligations and financial liabilities upon business termination.
To be eligible for ECCP, you must:
- Have stopped or be in the process of closing down your business operations
- Have business assets of not more than S$1 million
- Have unsecured business debts with banks and financial institutions not exceeding S$500,000
CCS may propose a comprehensive debt repayment arrangement for both business and personal unsecured debts under this program.
Financial education programmes
1. Financial literacy talks and workshops
CCS conducts financial literacy talks and workshops focusing on responsible credit use, money management skills, and improving overall financial literacy. These sessions are available for individuals, organisations, and social service agencies.
2. Cents-ible Retirement Programme (CRP)
The Cents-ible Retirement Programme (CRP) is a specialised program aimed at helping individuals aged 50 and above become more financially self-reliant in their retirement years. The program consists of two modules: taking stock of financial resources and personalised financial counselling to maximise these resources.
| Category | Services | Description |
|---|---|---|
| Assistance With Unsecured Debt Problems | Information Talks on Debt Management | Free talks providing general information on addressing debt problems, negotiating with creditors, and approaching CCS for help |
| Financial Counselling | One-on-one sessions with a financial counsellor to assess your financial situation and explore options (S$30 fee) | |
| Debt Management Programme (DMP) | A structured debt repayment arrangement facilitated by CCS between borrowers and creditors for unsecured debts of at least S$10,000 | |
| Enterprise Credit Counselling Programme (ECCP) | Helps small business owners understand their obligations and financial liabilities upon business termination, with potential debt repayment arrangements | |
| Financial Education Programmes | Financial Literacy Talks & Workshops | Sessions focusing on responsible credit use, money management skills, and improving financial literacy for individuals, organisations, and social service agencies |
| Cents-ible Retirement Programme (CRP) | A specialised program for individuals aged 50 and above to become more financially self-reliant in their retirement years |
Source: Credit Counselling Singapore
How Does Credit Counselling Work?
The credit counselling process in Singapore involves 3 main steps:
Step 1: Attend the Information Talk on Debt Management
Before scheduling a credit counselling session with CCS, you must first attend their Information Talk on debt management or complete their Online Debt Management Course. These resources provide valuable insights into the dos and don’ts of debt management and strategies for dealing with creditors. The talks are held every weekday evening and every other Saturday, while the online course allows you to learn at your own pace.
Step 2: Submit a Request for a Counselling Session
After gaining a better understanding of debt management through the talk or online course, you can proceed to request a personalised counselling session. This is particularly useful if you need customised debt advice or want to learn more about the Debt Management Programme (DMP), a formal debt restructuring arrangement facilitated by CCS between you and your creditors. To book a session, submit a Counselling Request Package along with the required supporting documents to CCS.
Step 3: Attend a One-on-One Counselling Session
During the counselling session, it’s crucial to be open and honest about your financial situation, problems, and limitations. By providing a clear picture of your circumstances, the financial counsellor can better assess your needs and offer relevant advice. They will work with you to identify the most feasible option for addressing your debt problem and determine if you are a suitable candidate for the DMP.
Documents Needed for the Counselling Appointment
To book a credit counselling appointment, you’ll need to submit the following financial documents to CCS by post or in person:
1. Credit Report
Purchase your credit report online from the Credit Bureau Singapore (CBS) for S$6.42 (inclusive of GST) and, if applicable, from the Money Lender Credit Bureau (MLCB) for S$1.
2. Latest 15 Months CPF Statements
Obtain both your CPF transaction and contribution history statements from the CPF website.
3. Payslips
Submit proof of income based on your employment type:
| Type of employment | Income document |
|---|---|
| Salaried employee |
|
| Commission-based earner, e.g. property agent, sales agent |
|
| Self-employed, e.g. taxi driver, private-hire driver, freelance tuition teacher |
|
| Sole-proprietor, a partner in a partnership firm (LLP), or a director of a private limited company (PLC) |
|
How Does A Debt Management Programme (DMP) Look Like?
The Debt Management Programme is a comprehensive repayment arrangement tailored to your financial ability, aimed at helping you pay your debts more manageably. CCS facilitates this arrangement between you and your creditors, who may offer lower interest rates and extended repayment periods, resulting in lower instalment amounts.
Unlike a Debt Consolidation Plan, a DMP does not consolidate your debts under a single licensed lender. Instead, you continue to make payments to your original creditors throughout the duration of the DMP.
Eligibility Criteria for a Debt Management Programme
To apply for a DMP, you must meet the following criteria:
- Have unsecured debts owed to one or more banks
- Have a total unsecured debt of at least S$10,000
- Have bank accounts that are at least 1 year old
- Have a source of income and can make regular payments to creditors
Disadvantages of Being on a Debt Management Programme
While a DMP can help you manage your debts, it also comes with some drawbacks:
- All credit card and line accounts will be closed.
- You won’t be able to apply for unsecured credit facilities with any bank.
- Your credit report will state that you’re on DMP.
Debt Consolidation Plan vs. Debt Management Programme
Here’s a quick comparison between a Debt Consolidation Plan and a DMP:
| Debt Consolidation Plan | Debt Management Programme | |
|---|---|---|
| Does the programme consolidate your debts into 1 personal loan? | Yes | No |
| Can you apply for unsecured credit facilities at a bank? | No, until your debt balance-to-income (BTI) is less than 8 times your monthly salary | No, until the DMP is over |
| Will all your credit card and line accounts be closed? | Yes | Yes |
| Will it be reflected on your credit report? | Yes | Yes |
| Income and amount of unsecured debt to qualify |
|
|
| Can you get lower interest rates and longer tenure? | Yes | Yes |
| Will CCS facilitate it? | No, you’ll need to apply for it at a bank. | Yes |
When Should You Go For Credit Counselling Singapore?
You should consider seeking credit counselling in Singapore when:
- You are struggling to make payments on your unsecured debts, such as credit cards and personal loans
- Your unsecured debt amounts to at least S$10,000
- You are unable to manage your debts on your own and need professional guidance
If you meet these criteria, you can attend CCS’s information talks or financial counselling sessions to discuss your situation and explore your options.
What Are The Alternatives to Credit Counselling?
While credit counselling is an effective way to manage debt, there are other alternatives worth considering:
1. Debt Consolidation Plan
A Debt Consolidation Plan allows you to consolidate your unsecured debts with multiple creditors into a single loan with a lower interest rate. This can make your debt more manageable and help you save on interest payments.
2. Personal loans for debt repayment
Taking out a personal loan to repay your existing debts can be a viable option if you can secure a lower interest rate than what you are currently paying on your credit cards or other unsecured loans.
3. Bankruptcy (as a last resort)
In severe cases where you are unable to repay your debts, bankruptcy may be the only option. However, this should be considered a last resort due to its long-lasting impact on your financial future.
Frequently Asked Questions (FAQs) about Credit Counselling Singapore (CCS)
1. How much does credit counselling cost?
Information talks on debt management offered by CCS are free. Financial counselling sessions have a nominal fee of S$30.
2. Is credit counselling confidential?
Yes, all information shared during credit counselling sessions is kept strictly confidential.
3. How long does the debt management programme take?
The duration of the Debt Management Programme varies depending on your financial situation and the amount of debt you have. Typically, it can take between 3 to 5 years to complete the program.
4. Will credit counselling affect my credit score?
Participating in the Debt Management Programme will be reflected on your credit report. However, successfully completing the program and repaying your debts can have a positive impact on your credit score in the long run.
Conclusion
Credit counselling is a valuable resource for Singaporeans struggling with debt management. By seeking help from Credit Counselling Singapore (CCS), individuals can gain the knowledge, skills, and support needed to overcome their financial challenges and achieve a debt-free future.
If you are facing difficulties with unsecured debt, don’t hesitate to reach out to CCS for assistance. With their range of services, including debt management talks, financial counselling sessions, and the Debt Management Programme, you can take the first step towards regaining control of your finances and building a more stable financial future.
In addition to credit counselling, BTB Creditz, a trusted licensed moneylender in Singapore, offers tailored loan solutions to help you consolidate your debts and improve your financial situation. Our experienced team understands the challenges faced by individuals struggling with debt and is committed to providing personalised advice and support.
