SINGAPORE: More young people in Singapore are reportedly facing debt problems, with data from the Singapore Credit Center showing that the average amount of unsecured loans owed by Singaporeans aged 21 to 29 increased by 15 per cent in the third quarter of last year.
Accompanied by a parallel rise in credit card debt, the recent data paints a worrisome financial landscape for Singapore youths, such as Gina, a 29-year-old Singaporean, who currently owes nearly $80,000 in bank debt, prompting her to seek credit counselling. She expressed regret, saying, “The debt makes me feel uncomfortable. I am trying to save money to ensure that I have an adequate budget.”
According to the Singapore Credit Center, the average arrears on unsecured loans for individuals aged 21 to 29 reached $4,202 in the previous year’s third quarter, marking a 15 per cent increase compared to the previous quarter’s $3,666.
This surge is reported to be the highest among all age groups, signalling a concerning financial strain on the younger demographic.
Simultaneously, credit card debt among this age group is escalating, with the average monthly credit card debt in arrears reaching $2,445 – a 4.5 per cent increase from the preceding month.
Disturbingly, young Singaporeans are struggling to meet their credit card repayments, earning them the dubious distinction of having the highest bad debt ratio.
Data highlights that while the default rate in various age groups had decreased after peaking in the first half of the previous year, those aged 21 to 29 continued to experience a rising trend, reaching a troubling 0.12 per cent.
The Singapore Credit Counselling Service has noted a concerning trend in the age demographics seeking help for debt-related issues. Last year, 12 per cent of the 1,582 individuals seeking assistance from SCCS were between the ages of 21 and 29.
A spokesperson from the organisation highlighted the common theme among this demographic, saying, “Some of them spend too much. Many times, they just repay the minimum repayment amount because they have no way to repay more.”
Gina, currently working with a credit counselling service to manage her debt, emphasizes the impact financial struggles have on one’s life and work.
She urges young people to think twice before borrowing money and emphasizes the importance of prudent financial management to avoid finding oneself in a situation where borrowing becomes a necessity.
Financial experts advise consumers to prioritize timely credit card debt repayment to avoid accruing high-interest rates and late fees.
The rising debt among Singapore’s youth highlights the need for enhanced financial literacy and responsible borrowing practices to secure a stable financial future.