One repayment plan, several balances
When several debts are due each month, it can be tempting to divide extra cash evenly across them or focus on the smallest balance first. MoneySense’s debt guidance recommends prioritising the debt with the highest interest rate first, while continuing to meet the required payments on the others.
The reason is arithmetic: an additional dollar paid toward a higher-rate balance generally avoids more future interest than the same dollar paid toward a lower-rate balance, assuming no prepayment fee or special loan terms change the comparison. This is commonly called the “highest-interest-first” or debt-avalanche approach.
Make a clear order
Write down each balance, interest rate, minimum payment, due date and any early-repayment penalty. Then:
- Pay at least the required amount on every account by its due date.
- Direct available extra money to the balance with the highest interest rate.
- When that balance is cleared, roll the freed-up payment into the next-highest rate.
- Repeat until the remaining balances are paid.
MoneySense advises checking for penalties or notice requirements before making a lump-sum repayment. A lower-rate home loan with a large early-repayment charge may not be comparable to a credit-card balance without checking the actual terms. The order should use the effective cost you truly pay, not an assumption based on an advertised rate alone.
Keep new borrowing from undoing progress
While repaying, try to stop adding to the balances. MoneySense suggests refraining from further card charges or drawing on unsecured lines where possible, and reviewing the number of credit facilities. A budget can identify expenses to trim and show what payment is sustainable without missing rent, food or other essential bills.
If minimums are becoming hard to meet, contact the lender promptly. MoneySense says a financial institution may discuss payment restructuring. Do not take another loan to repay old debt until you have compared all interest charges and fees; consolidation can simplify payments, but it does not automatically make debt cheaper.
When a Debt Consolidation Plan might be relevant
MoneySense says Singaporeans or Permanent Residents may apply for an industry Debt Consolidation Plan if they meet the programme’s criteria, which include unsecured debts exceeding 12 times monthly income. The programme moves eligible unsecured balances from participating financial institutions to one institution with a fixed repayment plan. Eligibility and terms are specific; check current criteria with the participating bank or Credit Counselling Singapore rather than assuming you qualify.
MoneySense also identifies Credit Counselling Singapore as a source of free counselling and debt advisory services. Asking for help early is a financial action, not a failure. A counsellor can help review the full situation and discuss options before missed payments multiply.
Measure progress by the balance and the behaviour
Check statements each month to confirm that payments were credited and balances are falling. If an account’s rate changes, revise the repayment order. If income falls, contact creditors and rebuild a realistic budget before the shortfall becomes a missed-payment pattern.
The method is straightforward: protect on-time payments across all debts, send extra money to the costliest balance, and avoid creating new balances while old ones shrink. The exact schedule depends on your contracts and cash flow, so verify fees and penalties before accelerating any loan.
Sources
- MoneySense: Managing debt—what can you do? — repayment order, lender contact and Debt Consolidation Plan guidance; verified 15 Oct 2026.