• DBS Personal Loan Interest Rates

    Personal Loan BYTES FROM OUR KITCHEN

    DBS offers a wide range of financial products including personal loans. A personal loan scheme is aimed to offer financial aid to fund one’s personal expenses. A personal loan is usually repaid in fixed installments within a fixed period. The personal loan scheme offered by DBS comes at a certain rate of interest. Read on to know more about DBS personal loan interest rates.

    Types of personal loan interest rates

    There are two typically two main types of personal loan interest rates offered by any bank:

    • Flat Interest Rate - Flat rate of interest is one of the two kinds of interest rates offered by the bank on it’s personal loan schemes. It is a simple rate of interest calculated on the entire loan amount without considering the amount already repaid by borrowers. The calculation of a flat rate loan is based on the total principal of the loan itself and the interest rate calculated for each individual pay period.
    • Effective Interest Rate (EIR) - The effective annual interest rate is the rate that is paid on a loan or as a result of compounding over a given time period. It is also known as the effective interest rate, the effective rate or the annual equivalent rate. EIR is subject to compounding if the monthly instalment amount is not paid in full.

    DBS offers EIR interest rates on its personal loan schemes.

    DBS personal loan interest rates

    The rate of interest offered on a loan scheme depends on a lot of factors out of which, the annual income of an individual is an important factor.

    Given below is a list of terms that you need to be aware of in order to understand the interest rate:

    • AIR- AIR or Annual is the rate of interest a lender uses to calculate how much you owe.
    • Processing fee- Processing fee is a fee charged by the bank to process a loan application.

    The table shows interest rates offered for borrowers who earn a minimum annual income of S$30,000 and above.

    Loan tenure (months) AIR (per annum) Processing fee Effective interest rate (p.a.) Monthly installment amount for loan of S$5,000
    12 months 7.99% 3% 19.70% p.a. S$450
    24 months 7.99% 3% 17.28% p.a. S$242
    36 months 5.88% 2% 12.04% p.a. S$164
    48 months 5.88% 2% 11.62% p.a. S$129
    60 months 5.88% 2% 11.32% p.a. S$108

    Example: Let us consider an example where you own a credit card that has a credit limit of S$8,000. You take a personal loan of S$5,000 for a tenure of 60 months on your credit card. Let’s look at the break down:

    • Applied interest rate: 5.88% p.a.
    • Processing fee (charged separate from the loan amount): S$100
    • Effective interest rate: 11.32% p.a.
    • S$108 will be reflected in your account every month as installment amount.
    • Total cost of loan: $5,000 (loan amount) + $100 (processing fee) + ($294 x 60/12) (interest x no of years) = $6,570

    The table shows interest rates offered for borrowers who earn a minimum annual income between S$20,000 and S$29,999.

    Loan tenure (months) AIR (per annum) Processing fee Effective interest rate (p.a.) Monthly installment amount for loan of S$5,000
    12 months 11.00% 4% 26.52% p.a. S$278
    24 months 11.00% 4% 23.23% p.a. S$153
    36 months 11.00% 4% 21.74% p.a. S$111
    48 months 11.00% 4% 20.05% p.a. S$90
    60 months 11.00% 4% 20.01% p.a. S$78

    Example: Let us consider an example where you have a cashline with an eligible credit limit of S$4,000 and you take a personal loan of S$3,000 for a tenure of 60 months. This will be the break-up of your loan in case your loan is approved:

    • Applied interest rate: 11.00% p.a.
    • Processing fee (charged separate from the loan amount): S$120
    • Effective interest rate: 20.01% p.a.
    • S$108 will be reflected in your account every month as installment amount.
    • Total cost of loan: $3,000 (loan amount) + $120 (processing fee) + ($330 x 60/12) (interest x no of years) = $4,770.
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