SINGAPORE - About 3 per cent of borrowers with unsecured loans have debts that exceed their annual income, Deputy Prime Minister Tharman Shanmugaratnam said on Tuesday.

Speaking at an event to mark the 10th anniversary of Credit Counselling Singapore (CCS), Mr Tharman, also Finance Minister, said nearly two-thirds of borrowers who get into trouble have incomes above the median and more than half have tertiary educational qualifications.

"As CCS has found, people fall into debt problems for various reasons. Over-spending, such as on travel and cars, and job-related changes, are the two most common reasons,'' he said.

Here are five commonly cited reasons:

1. Splurging

Top of the list, said the CCS, is simply splurging. Nearly half of all debtors helped by the non-profit service blame overspending.

2. Job woes

Not far behind are job woes. People who have been retrenched or suffered a pay cut made up 46 per cent of debtors at CCS.

3. Business troubles

Next came business operators who ran into trouble. They used unsecured credit such as credit cards to get themselves back on track - but only wound up with more money woes. CCS said 22 per cent blame business troubles for debt.

4. Medical bills

Another big headache: unexpected medical bills - either for the debtor themselves or someone they know, with 22 per cent citing this factor.

5. Gambling

Gambling is a serious problem too. Just 2 per cent of CCS debtors were dragged into the red by gambling in 2004 - but now the figure has shot up to 17 per cent in the first eight months of this year. But that is down from 31 per cent last year.