You will be able to contact a lender before a missed payment and know what to ask for.
Most people who know they can't make a debt payment do nothing, hope something turns up, and then miss the payment. Calling the lender before the due date feels uncomfortable, but it's almost always the better choice. Start as soon as you see a shortfall coming. Work out what is due, and what you can actually pay.
A missed payment costs more than a late payment would. It usually brings a late fee, and interest keeps running on the full balance. On a credit card, a missed payment may also cost you the interest-free period until the balance is cleared. Your statement and the card's terms list the exact charges.
A missed payment also goes on your record. In Singapore, lenders report repayment history to a credit bureau, which is an organisation that keeps those records. Credit Bureau Singapore is one example. A missed or late payment shows up on your credit report. Future lenders see that report when you apply for a card, a loan or a home loan. For what the report shows and how long things stay on it, see lesson 1.1, "Your credit report is the lender's memory of you", in the course "Credit and debt: scores, cards, loans and BNPL".
Before the due date, the lender treats you as a customer with a problem. After it, your account is in arrears, meaning it has passed its due date unpaid. A different team handles arrears, and that team works to different rules. Lenders usually have more room to help someone who calls early, because nothing has gone wrong yet. They would rather agree on something than chase a missed payment. The best time to call is as soon as you know a payment is at risk.
Only use the lender's official contact channels: the phone number on the back of the card, the bank's official app, or the bank's official website. Never use a phone number from a message, from a social media advert, or from someone offering to "settle your debts" for a fee. Debt is a common hook for scams, and the lender's own channels are the only safe place to have this conversation.
Before you call, decide exactly what you can pay and what you will ask for. A lender can't do anything with a vague statement that you are struggling. A lender can respond to a specific offer: an amount you can pay now and a date when full payments resume.
Farhan earns most of his pay from commission on car sales. In one slow month he sold only two cars. Two weeks before payday, he worked out that his take-home pay would be about S$2,600 instead of his usual lowest of S$3,400. These are example figures. His rent, his family contribution and his two card minimums all fell due in the same week. He did the sums three times. He could cover the S$50 minimum on his smaller card, but only S$30 of the S$135 minimum on his larger card.
He called the lender that same day, two weeks before the due date. These calls are stressful, and stress makes people ramble or agree to things they can't afford. A few lines written down beforehand help, so Farhan wrote a short script with four parts.
First, who he was and why he was calling. He identified his card by its last four digits, 1234. He said he wouldn't be able to pay the full minimum this month and wanted to sort it out before the due date.
Second, what happened, in one or two sentences. His income is commission-based, sales were low this month, and it is a one-month drop.
Third, what he could pay. He offered S$30 on the due date and to make up the rest over the next two months.
Fourth, what he was asking for. He asked whether a payment arrangement was available, and whether the late fee could be waived if he kept to it.
His bank agreed to a reduced payment that month, with the balance spread over the next two months. It emailed him the terms that afternoon.
What a lender can offer depends on the lender and on your situation. Options may include:
a lower payment for a month or two a short payment plan that spreads the shortfall over several months waiving a late fee when a payment is a few days late converting part of a card balance into an instalment plan
Ask what the lender can offer, and don't assume the first answer is the only one.
Get whatever you agree in writing, by email or letter, either before the call ends or within a day or two. Note the date and time of the call and the name of the person you spoke to. If something goes wrong later, the written confirmation settles it.
A call like Farhan's fixes one bad month. If you are short every month, or you have several debts you can't keep up with, the problem is bigger than any one lender can solve. In that case, contact Credit Counselling Singapore (CCS) instead of making single calls to lenders. CCS is a non-profit that helps people with unmanageable unsecured debt look at their whole situation. Where it fits, it arranges a repayment plan with the banks they owe. Its website, ccs.org.sg, explains how to make an appointment. For when to call CCS and what to expect, see lesson 7.3, "When to call a credit counsellor, and what they can do", in the same course.
Think about the debt payment you would find hardest to make if your income dipped next month, and what you would say to that lender.
Write a short script for a call to your lender covering your situation, what you can pay and what you are asking for.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).