We’ve said goodbye to handwritten letters, newspapers and cash. In their place, we see text messages, digital feeds and digital payment methods.
Many things have changed in Singapore over the years, but there is one thing that has not – the rising cost of living and the financial woes.
For many Singaporeans, money feels tighter than ever in 2025. The rising cost of living, high interest rates, and global economic slowdown have left families struggling to stretch every dollar. According to recent reports, credit card debt is climbing once again and has crossed $8 billion. This is a sign that more people are relying on short-term credit just to get by.
Indeed, financial woes are deemed as norms during these difficult times as surely, many have spent uncountable minutes staring at their unpaid bills, pondering how they will get out of debt during rough times. Credit card debt snowballs easily and this is why you need to avoid credit card debt. Common as it may be, it should be highlighted that it is possible for you to get out of credit card debt without breaking a sweat or hurting your pockets even more.
Wondering how to pay off credit card debt? Consider taking a credit card consolidation loan, or in other words, converting your credit card debts into a personal loan. Whether you live in Jurong East, Bedok, Tampines, Chinatown or Clementi, there are many legal money lenders for you.
Before you brush off the idea, take some time to read how a credit card consolidation loan from a bank or legal money lender in Singapore will benefit you:
Benefit #1: Pay less interest
The first step to paying off credit card debt is to understand how interest is calculated. A quick research will let you know that the overall personal loan interest rates are more affordable than that of credit cards.
Keeping this fact in mind, by using a personal loan for credit card debt consolidation loan, the lower interest rates will take some load off your shoulders as it helps to reduce the number of repayment years, and help you save a significant amount of money.
Here’s the icing on the cake: if your credit score is commendable, you may be eligible for an even lower interest rate on your personal loan.
Benefit #2: It streamlines payments
Managing different credit cards may be simple. However, ask any credit card holder, and they will say that managing different repayments can be a confusing chore.
Credit card debt consolidation makes your life easier as it uses the funds to pay-off your outstanding credit card balances simultaneously. So long as you refrain from accumulating more credit card debt throughout the repayment period, you will only require to make a single loan repayment every month as compared to managing multiple financial obligations.
Benefit #3: Repayment will be more consistent
A credit card consolidation loan allows you to repay the loan in fixed instalments. Therefore, every month you will know the exact amount you are required to pay, and will always be aware when it is due.
Such a beneficial perk will undeniably be a huge sigh of relief to those who are facing credit card debt, and were required to pay varying amounts each month. With a fixed instalment plan, rest assured that you will be able to pay off your credit card debt in no time!
Benefit #4 : Chance To Improve Your Credit Score
Individuals caught in credit card debt often hurt their credit ratings due to high utilisation rates, which will classify them as risky borrowers. By applying for credit card debt consolidation loan or personal loan, and keeping your credit accounts open, it will preserve the longevity of your financial history, and ultimately, help lower your utilisation ratio as well as optimise your credit score. To top it all off, repaying your loans in a timely manner will boost your credit score too.
So, you’ve settled your credit card debt. What’s next?
A credit card consolidation loan has many benefits for individuals who are in credit card debt, especially when it is applied or used properly, and wisely.
Licensed money lenders in Singapore often offer loans to help borrowers settle their credit card debt. This helps to ease financial pressure so that they can focus on work and life events. Before borrowing, always check and verify your money lender’s license to avoid scams.
Regardless if you choose to borrow from a bank or a money lender in Singapore, the key is to manage our monthly finances. You need to change your spending habits to prevent history from repeating itself. Read below for tips to control your spending.
Control your credit card use
Banks such as Citibank, DBS, OCBC, UOB, Maybank, Amex, often offer promotions for credit card sign-ups, tempting individuals to join them.
Credit card ownership is relatively high in Singapore, and undoubtedly, many credit card holders will share that temptation can be immense. It is simply very convenient to swipe your credit card.
That is why in the future, it is important for you to monitor your credit card usage. In fact, it would be helpful to determine scenarios or circumstances that will permit you to use your credit card, such as during medical emergencies. In doing so, it will be easier for you to prevent accumulating credit card debt.
Make a repayment plan
Delaying your credit card repayment spells catastrophic hindrance to your finances. To prevent yourself from accumulating credit card debt, it is best for you to not just monitor how often you use your credit card, and the amount. It is similarly necessary for you to be on top of your repayment plan. One of the best ways to do so is by formulating a repayment schedule that will ensure you make your dues, and avoid accumulating debt.
If you are looking for professional assistance to clear credit card debt, consider using LoanHere, a loan comparison platform that sends you offers from various licensed money lenders across Singapore. All the legal money lenders LoanHere chooses are highly reviewed and have a license from MAS (Monetary Authority of Singapore). Get a loan quote easily.
About the Author
Drawing on 3 years of proven knowledge and counting, LoanHere has grown to become one of the go-to platforms for consumers’ diverse loan needs. Besides ensuring borrowers get their loan quotes promptly from the best private loan providers in Singapore, we also make an effort to craft well-founded blog articles focusing on loans, finance, and lenders.
