With the constantly rising cost of living in Singapore, it is much easier than we realise to incur debt. Credit card companies and money lenders may seem like a quick solution to keeping up with a luxurious lifestyle. However, these quick solutions can often lead to a vicious cycle of debt that many struggle to get themselves out of. 

In 2009, Singapore introduced Debt Repayment Scheme (DRS) as a means of preventing people from going bankrupt. The government initiative is designed to help individuals manage their unsecured debt. 

Here at Debtox, we want to help those in need of help understand the debt management options available to them. This comprehensive guide aims to highlight and breakdown the intricacies of the Debt Repayment Scheme, shedding light on its benefits, eligibility criteria, application process, and the potential it holds for individuals seeking financial stability.

What Is Debt Repayment Scheme (DRS) In Singapore?

As mentioned, Debt Repayment Scheme was introduced to prevent and lower the occurrence of bankruptcy. It does this by guiding individuals toward freedom from debt by taking all unsecured debt and creating a structured repayment plan tailored to one’s financial capacity. 

Unsecured debt refers to your credit cards, personal loans, and debt incurred from money lenders. Having multiple interest rates and monthly payments can be daunting and challenging to keep up with. If you find yourself only able to make the minimum payments for most of your creditors, you are unlikely to be able to see your overall total reduced. 

As a government scheme, DRS in Singapore legally protects you from your creditors so long as you continue to make the agreed upon repayments in a timely manner. Additionally, your interest rate will freeze, this means that your interest owed will not continue to grow. DRS can provide debtors with ease of mind and a path towards freedom from debt. 

What Are Some Features & Benefits Of Debt Repayment Scheme In Singapore?

As mentioned, DRS in Singapore provides debtors with the ability to consolidate their multiple unsecured debt into a single manageable monthly payment. The added benefit of a frozen interest rate makes it a valuable option for debtors looking to work towards financial stability. 

Additionally, the scheme is tailored to the debtor’s financial situation and the monthly repayments are based on what can be afforded, taking into account any dependents and essential expenses that need to be made. 

Deciding to undergo DRS in Singapore also gives debtors a chance to rebuild their credit rating over time. On top of this, our Debt Consultants will be there to guide you through the entire process to ensure that you feel supported throughout. 

What Is The Eligibility Criteria For Debt Repayment Scheme In Singapore?

Before you are able to enter DRS, it is crucial that you understand the eligibility criteria. Debt Repayment Scheme in Singapore is available to Singaporean Citizens and Permanent Residents who have unsecured debt of between $15000 to $150000. Individuals must be able to prove that they have a stable source of income. 

Additionally, debtors must demonstrate that they have financial difficulties when it comes to meeting their existing debt obligations. Lastly, individuals may not be listed as sole proprietors of a company. 

What Is The Process For Debt Repayment Scheme In Singapore? 

If you have decided that you want to enter DRS in Singapore, our Debt Consultants will be able to assist you with the application process. During the application process for DRS, we will first need to conduct a comprehensive financial analysis. Our Debt Consultant will review your income, expenses, and outstanding debt in order to understand your eligibility for the scheme. 

Should you qualify for Debt Repayment Scheme, your interest will be frozen and a tailored repayment proposal will be created based on the total sum of debt, your income, and financial commitments. Once negotiations are successful, the debtor will review and accept the plan before commencing with regular monthly payments to the Ministry of Law. 

During the repayment period, it is crucial that you stick to the agreed upon repayments throughout the given duration. 

What Are Some Things To Consider During Debt Repayment Scheme In Singapore?

It is important that before you undergo any debt management initiatives, that you clearly understand the terms and conditions attached to them - this includes the process and repayment period. 

Once you have entered into DRS, it is also crucial that you budget wisely by developing and sticking realistic goals to accommodate your monthly repayments without compromising your essential living expenses. 

Avoid incurring new debt at all costs - individuals need to commit to responsible financial behaviour and refrain from accumulating new debt during the repayment period. 

Remember, our Debt Consultants are here to help you throughout the process. We will be able to guide you through the steps you should take and help you manage your DRS. 

Conclusion… 

Debt Repayment Scheme in Singapore is a valuable option for those who find themselves burdened with unsecured debt. It provides a structured path towards freedom from debt and financial stability. 

DRS aids debtors in repaying their creditors through a structured and affordable repayment plan that instils strong financial management traits along the way. If you find yourself faced with the challenges of unmanageable debt, schedule a one-on-one consultation with one of our Debt Consultants today, and we will be happy to assist you towards reclaiming your financial well-being.