You can opt for a personal loan when you are in need of additional funds for various purposes like home renovation, wedding, medical expenses, vacation, and educational costs. In a personal loan, your monthly instalment will comprise your principal repayment and also the applied interest rate charges. Sometimes, you might find it difficult to repay your loan because of the high interest rates and huge monthly instalment payments.
When you opt for a personal loan balance transfer, you can lessen the burden of your current loan by transferring your pending loan amount from one or more financial institutions to another. Low interest rates, one-time processing fee, and minimum monthly repayments are the key features of a personal loan balance transfer.
With this facility, you’ll be able to move all your outstanding debts from multiple credit lines to a single account at a lower interest rate. Take a look at how this option works:
Here is a list of banks in Singapore that allows you to transfer your loan from another institution:
|Bank name||Interest Rate||Processing fee||Tenures available||Special benefits|
|OCBC||Starts from 7.22% p.a.||Starts from 1.80%||3, 6, and 12 months||The minimum monthly repayment needed is the greater of 3% of total pending balance or S$50.|
|Citibank||Starts from 3.60% p.a.||Starts from 1.58%||3, 6, and 12 months||The minimum monthly repayment is 3% of the transferred amount or S$45, whichever amount is higher.|
|POSB||Starts from 5.06%||Starts from 2.5%||6 and 12 months||Apply for POSB Balance Transfer online to enjoy preferential rates.|
|DBS||Starts from 5.06%||Starts from 2.5%||6 and 12 months||Apply for DBS Balance Transfer online to enjoy preferential rates.|
|Standard Chartered||Starts from 4.12% p.a.||Starts from 1.99%||6 and 12 months||-|
|HSBC||Starts from 3% p.a.||Starts from 1.38%||6 and 12 months||Processing fee will be waived for 12-month tenure.|
|UOB||Starts from 3.92%||Starts from 1.49%||3, 6, 12, and 18 months||-|
|Maybank||Starts from 2.96%||Starts from 1.38%||6 and 12 months||-|
The promotional interest rates are applicable only for a specific period. Most banks provide you with an interest-free period that ranges from 3 to 12 months after which a prevailing interest rate will be applicable. Hence, when you intend to use the balance transfer option, make sure to repay your debt within the 0% interest period, or you will not save much.
You will be charged a processing fee when you choose to use the balance transfer option. It will vary depending on the tenure and bank you opt for.
You will be charged a late payment fee if you fail to make your minimum repayment that is applicable to your credit line.
You need to pay a minimum amount on a monthly basis depending on the amount you’ve transferred. This amount will vary from bank to bank. If you don’t take care, all these charges will mount and in the end the purpose of a balance transfer – saving on interest payments and total repayments – will be defeated.