5 Ways to Pay Off Credit Card Debt in Singapore

5 Ways to Pay Off Credit Card Debt in Singapore
Debt Management

Using credit cards has a lot of benefits. For one, it makes online transactions, not only in Singapore but also worldwide, much easier. It also boosts your spending power without having to withdraw cash. But with great power comes great responsibility. With all the convenience they offer, it also increases your risk of credit card debt.

Failing to pay off your debt means incurring high interest which leads to more debt. In the end, you’ll be struggling to pay back everything. Racking up debt is scary. So is there a way to prevent this from happening? What are the ways to pay off credit card debt Singapore?

1. Pay Loan On Time

You may be tempted to put off paying your credit card bill for a few days. Especially when you’re low on cash and have more urgent bills to pay. But avoid this at all costs.

If you fail to pay your credit card debt on time, your balance continues to rise. In fact, you’ll be charged interest for every passing day that you don’t pay. On top of that, you’ll be charged with other fees as well, like late fees.

Pros of paying the loan on time:

  • Avoid late fees
  • Enjoy low interest rates
  • Improve credit score
  • Low monthly payments
  • Your credit card will remain in good standing

Cons of paying the loan on time:

  • Limited available cash.
  • You can’t get your money back in case of emergencies.

But how can you pay your loan on time?

First, you must calculate the amount you need to pay off your debt.  Then create a monthly budget for your credit card expenses. In doing so, you can determine how much you need to save and make payments on time.

Note: Paying the minimum unpaid credit card balance is not enough. This will still add interest to the remaining balance. That said, it’s recommended to repay the full remaining debt.


2. Pay With The Highest Interest Rate First

Credit card debt collects interest on top of your principal balance. So when paying off debt, consider prioritizing the one with the highest interest rate. Doing so will help you save more money in the long run.


Lower interest rate in the long run

  • Less interest paid overall
  • Once you pay off the debt with the highest interest rate, you no longer need to make minimum monthly payments


  • Limited available cash
  • Your debt balance may feel overwhelming to pay off

So how do you start paying off the highest interest rate?

First, go through your statement balance. Look for the balance with the highest interest rate. Start paying off this debt before other amounts. If you also have other debts, then make a minimum payment on each debt so your loan won’t snowball. But make sure to prioritize the debt with the highest rate.

Once you paid it off, you can use the amount to the next balance on the list.


3. Consider A 0% Balance Transfer

This debt repayment scheme involves transferring your existing debt to a new credit card with 0% interest. But this is only within their promotional period. Usually for 3 to 18 months. Some banks in Singapore offer this option so you have enough time to clear your debt.


  • 0% interest for a certain period, usually 3 to 18 months
  • Buys you time to pay off your debt in Singapore without worrying about your interest rate
  • Putting your balance in one account instead of multiple accounts will help save on annual processing fee.


  • High-interest rate once the 0% interest period is over
  • Promotional in nature so it has a short term
  • Comes with a processing fee
  • Repay the loan in a short span of time.

Since you’ll end up paying a higher interest rate once the promotional period is over, you’ll need to pay the loan promptly. So before transferring your balance, calculate the interest you save over time. Plus, determine if the savings will cover the processing fees as well.

Read more: What Is the Debt Repayment Scheme (DSR) in Singapore?


4. Consolidate your debt with a personal loan

Another way to pay off your credit card debt in Singapore is by taking out a personal loan. This method is known as debt consolidation.

Debt consolidation involves taking out a new loan to pay off other debts. By taking out a personal loan, you’ll have available funds that you can use to pay off your balance. Then, you’ll have to repay the bank or licensed moneylender in installments.


  • Flexibility in deciding the loan amount
  • Fixed interest rate
  • Lower interest rate than credit cards
  • Loan tenure is usually 6 to 12 months so you’ll have plenty of time to pay off the loan
  • Flexible repayment period


  • Loan providers usually charge a processing fee
  • If you have a bad credit rating or have a low income, it’s hard to get approved
  • May involve other charges like application fees, yearly fees, and more.
  • You may be tempted to borrow more than what you need to clear your balance

If you are thinking of taking out a personal loan, look into your options first. Compare rates, ask about the repayment schedule, and more. You can also find the best personal loan through Moneylender Review.


5. Refinance Your Home Loan

Refinancing is another debt consolidation plan where you’ll clear the existing high-interest debt with a new, lower interest rate debt.

With this debt repayment scheme, you can pay your balances faster. And in the long run, you’ll spend significantly less on interest rate. By refinancing your home loan, you’ll free up funds to consolidate your debt.

You have two refinancing options:

  • Cash-out Refinance: You can borrow up to 75% of your property value minus your outstanding loan amount. You can use the lump sum to pay off your other financial obligations.
  • Rate and Term Refinance: Change your loan term and/or interest rate. For example, taking a longer term or lowering your interest rate will lower your monthly payments. This means you’re freeing up funds to pay for other balances.


  • Lower monthly payments on home loans
  • Have funds for credit card debt repayments


  • Additional costs such as legal and valuation fees
  • Cause you to pay more interest in the long run
  • With a cash-out refinance, your property will become collateral


Types Of Loans To Clear Your Debt:

1. Personal Loan

A personal loan is a type of loan with a fixed interest rate and loan term. You can take out a personal loan when you’re short on funds. In fact, individuals choose this option for a variety of reasons.

Unlike a home or car loan where you need to use the money to finance your property or vehicle, a personal loan can be used for anything. That said, if you need to clear off your debt, you can consider this debt repayment scheme.

With a personal loan, you can borrow a lump sum of money quickly. You can then use the proceeds to pay off your balance while eliminating multiple monthly high interest rates. You’ll then repay the bank or licensed moneylender in installments.

Here are the benefits of using a personal loan for debt repayments:

Earn low interest rates: In Singapore, the highest credit card interest rate is 25%. The lowest rate was about 15%. Compared to the average interest rate for personal loans which ranges between 11% and 14%, personal loans are considered cheaper. This means you can lower your total interest paid by consolidating your debt.

Streamline payment: When you’re using different credit cards, it’s difficult to keep track of the due dates and balances. And if you miss a payment, it could lead to more fees. Consolidating debt with a personal loan can make debt repayment easier to keep track of.

If you’re thinking of taking out a loan, checkout MoneyLender Review‘s comparison for different personal loan options.

2. Line of Credit

With a line of credit, you can withdraw any amount as long as it is within the credit limit. This means you can get a lump sum of cash to clear your debt in Singapore. Banks usually offer this type of personal loan.

So how does it work?

The bank will approve a set amount and you can withdraw from it anytime. You will pay the interest based on how much you withdrew instead of the pre-approved amount. Line of credit also offers lower rates than credit cards. The yearly interest rate ranges between 18% and 22%.

With a personal loan, you’ll pay a one-time processing fee. But with line of credit, you have to pay an annual fee which could range from $60 to $120.

3. Balance transfer

Balance transfer is another option to consider when paying off debt. With this option, you can transfer your existing debt to a 0% credit card. Simply apply for a balance transfer with your credit card issuer. But you’ll have to pay a processing fee.

Make sure to clear your balance within the 0% interest period. Or else, you’ll be paying higher rates. So why consider this option?

Consolidating debt onto one credit card means you’ll save on account and annual fees. Additionally, you’ll enjoy interest savings within the introductory period.

To make the most of balance transfer, divide your balance by the number of 0% months. Make sure to pay that amount each month. In doing so, you can clear off your debt within the zero percent months.

4. Debt Consolidation

A debt consolidation plan is a type of personal loan offered to Singaporean citizens and permanent residents who are deep in debt. It’s a special financial relief programme that allows individuals to consolidate their unsecured credit facilities. This includes consolidating their debt into one account.

Additionally, this plan is perfect if you have other unsecured debts to pay off on top of your credit card bills.

Benefits of debt consolidation plans:

  • Pay a fixed monthly payment
  • Fixed payment period

All Singapore banks that issue credit cards usually provide a debt consolidation plan. So ask the financial institution about this option.

How do you qualify for this scheme?


  • Must be 21 years old 
  • Be a Singapore citizen or permanent resident
  • Must be heavily in debt. Your outstanding unsecured/credit card debt amounts to more than 12 times your monthly income
  • Earn between $20,000 and $120,000 per year with net personal assets of less than $2 million.


Moneylenders’ personal loan can be used for any personal reasons, including debt consolidation. Requirements are minimal and eligibility is more lenient than banks.

  • Must be 18 years old 
  • Be a Singapore citizen or permanent resident; foreigner loan is also available for foreigners
  • Must earn a minimum of $1,500 monthly; $2,000 for foreigners


In Conclusion

Credit cards offer a lot of conveniences. But failing to make payments can lead to bigger financial problems. There are various reasons as to why an individual is unable to repay their debts. It could be because of losing a job or due to the use of emergency funds.

Unfortunately, if you continually put off debt repayment, you’ll find yourself deep in credit card debt. That said, take the necessary steps to curb your spending. 

More importantly, consider the options listed above to help you pay off your debt. If you’re thinking of taking out a personal loan for a debt consolidation plan, request free quotes from MoneyLender Review to compare your personal loan options from Singapore’s top licensed moneylenders.