4 Ways Government Programs Can Help With Your Debt Problems

Inflation and layoffs are quickly becoming a part of the post-pandemic landscape. Nations around the globe are aiming for economic recovery. According to a report by the Monetary Authority of Singapore in December 2022, the core inflation is at 5.1% with inflation of food prices at 7.5%. 

There’s also the fact that Singapore is ranked as one of the most expensive places to live in. Often, incurring debt is the only way to make ends meet. Everyone is just trying to make it to another day, another month. 

In fact, the Credit Bureau of Singapore has seen a 65% increase in loan increase during Q1 2023 and Q2 2023. The Bureau also reports that for unsecured personal loans, Singaporeans who are 30 to 34 year olds now have a higher delinquency rate. 

With the ever-present rising cost of living and inflation, it is easy to get overwhelmed by multiple debts, That means borrowing again from a legal money lender in Singapore is off the table.

To address this incoming problem of its citizens sinking deeper in debt and failing to make payments on time, the Singaporean government through the Monetary Authority of Singapore (MAS) has placed regulations on Balance-to-Income (BTI) ratio on credit facilities limit for credit products which do not have a collateral. 

The goal is to regulate and improve the lending practices of financial institutions. In short, the BTI will show if a prospective borrower can still manage to pay his existing obligations. The lower the BTI, the lower risks of default.

Available options for people deep in debt

For those who are already deep in the rabbit hole with multiple debts and still struggling to stay afloat, here is a list of options that the Singaporean government offers.

  • Debt Consolidation Plan (DCP)

Often, incurring multiple debts is a result of poor planning and inadequate financial education and awareness. It is normal to mistakenly think of a loan as a solution to money woes. Unfortunately, this is fast becoming the norm. 

Once funds from an existing loan run out, some would apply for another loan without considering a repayment strategy. Of course, there are times when there is really no other choice. One might find themselves in a situation where bills are piling up and yet income is slow or worse, loses his or her job so there is no income at all.

This is why the Association of Banks Singapore (ABS) has come up with the DCP. If a person has multiple loans from different banks and financial institutions, under the DCP, these can be consolidated by applying for a DCP in a participating financial institution. To know more about the plan and to determine whether or not your lender is a participating institution, visit ABS’ official website.

Take note however that the DCP only applies to unsecured loans. These are debts that do not require collateral such as unsecured personal loans and credit card debt.

  • Avail of Credit Counseling from Credit Counseling Singapore (CCS)

Incurring debt in itself is stressful. Finding yourself in a situation where you can no longer pay your bills on time or can no longer buy decent and nutritious foods can cause profound anxiety. This is further increased when you can no longer pay your debt or when demand letters start to pile up in your mailbox.

ABS recognizes the pressure and the mental turmoil that is caused by this prolonged stressful condition. That is why it recognizes the importance of the CCS’ credit counseling program, which is offered through various channels. One can submit a counseling request online through their website and complete a Debt Management Course or attend a Debt Management Webinar. Visit their official website and do not be scared of asking for assistance.

  • Research about Singapore’s Social Service agencies and ask for their Public Assistance Scheme and financial literacy programs

If you feel like you are in a quicksand of debt and can no longer see the light at the end of the tunnel, do not panic. Although upskilling is crucial in increasing your chances of finding higher income, it often takes time and money. Chances are, you can no longer spare a cent for a training or a certificate course.

This is where Singapore’s Social Service agencies can come in.  Read up and research about the Comcare Long Term Assistance program for the elderly and their families who are experiencing financial difficulties. This program is also known as Public Assistance. Coordinate with the Ministry of Social & Family Development to know if you can qualify for such assistance. If not, you can also ask the Ministry for their advice.

  • Legal Aid and Advice from Legal Aid Bureau of Singapore

If you have been ignoring demand letters from your lenders for quite some time, you should not be surprised if they sue you for breach of your loan contract or for collect the debt you owe them. As if it’s not bad enough that you can’t pay your debts on time, you now have to pay for a lawyer as well. 

It could feel like the end of the world, but thankfully, you still have an option. Visit the Legal Aid Bureau of Singapore and ask them for legal advice. It would be best if you bring a copy of your loan agreement as well as proof of previous payments. Try to be candid and disclose all important information so that the Bureau can effectively assist you in finding ways to avoid further harm. 

Be prepared to pass the Means and Merits Test. This is the Bureau’s way of evaluating whether or not you qualify for legal aid.


Do not be ashamed if you have to take out multiple loans to survive the rising price of cost of living or to support a sick family member. Asking for help is not a sign of weakness. In fact, you were simply responding to a financial need. 

At the same time, be honest and accept the wrong decisions you have made. Only with self-awareness can you move forward and improve. Ask for help early on. Do not get stuck in a vicious cycle of anxiety and passiveness.


Visit the official website of Singapore’s social service agencies and financial agencies. You can also visit their offices. Remember, help can only come to those who are willing to help themselves.