Are you paying exorbitant rates of interest on multiple credit cards? You may be able to enjoy greater freedom, convenience, and certainly savings if you consolidate the debt on your cards under a personal line of credit from HSBC. Think what you can do with the savings! Gifting your family an expensive overseas holiday package, starting a new endowment plan for your child’s education, or buying yourself a smartphone that can turn a few heads - the possibilities are endless.
Currently, the bank is running a promotional offer. If you apply now for the 12-month balance transfer option, you’ll enjoy a full waiver on the one-time processing fee of S$88 otherwise applicable. If you choose a 6-month tenure, you’ll enjoy a flat rate of 0% p.a. on your borrowing. After the promotion period ends, however, the interest charged on the outstanding balance would revert to the prevailing rate. See the illustration scrawled below to get a rough estimate of the potential savings.
Interest would be charged at the following rate depending on the tenure of your loan and whether you’re enjoying promotional rates or not:
|Tenure||Nominal Interest Rate (Flat)||Effective Interest Rate (Promotional)||Effective Interest Rate (Prevailing)|
|6 months||0% p.a.||3% p.a.||18.5% p.a.|
|12 months||4.88% p.a.||4.88% p.a.||18.5% p.a.|
Let’s say that the amount borrowed is S$7,500. Assuming that the EIR on the outstanding balance of a credit card is charged at 25% p.a., interest payable is S$1,875 (=25/100x7,500). If you’re using the 12-month HSBC credit line balance transfer facility, you’ll enjoy an EIR of 4.88% p.a. (provided the promotional rate applies). Interest payable on your dues will be S$366 (4.88/100x7,500). Since you’ll enjoy a processing-fee waiver during the promotion period, your interest charges are S$366. Hence, you’re saving S$1,509 (or 80% approximately).
Even after the promotion period ends, your savings could still be significant. Let’s see how. If the EIR on a card with an outstanding balance of S$7,500, is 25% p.a., you’ll have to pay an interest of S$1,875. After the promotion period, an EIR of 18.5% p.a. would apply on your HSBC credit facility. A processing fee of S$88 would also apply. Provided you make payments on time, the interest payable will be S$1,475.5 (=18.5/100x7,500+88). You would be saving S$399.5 (or 21% approximately).
Here are the most important fees and charges that would apply on your line of credit balance transfer:
|Minimum monthly payment||3% of the outstanding balance|
|Upfront processing fee for 6-month loan||1.38%|
|Upfront processing fee for 12-month loan||S$88|
|Minimum interest charge||S$10 per month|
The benefits of this HSBC personal credit facility are for you to see. Nevertheless, you should consider a few things first:
Before you apply, make sure that you’re well-versed with the eligibility criteria applicable for this loan product and the full list of documents required. Click here for updated information.
Ease of application is one of the most important consideration factors for personal loans. While the attractiveness of a loan may well be determined by low interest rates, low fees, and flexible tenures, ease of application has its own appeal. You may apply for this balance transfer product in a hassle-free and secure manner through one of the following channels:
Q. I applied for a higher amount. The bank gave me a lower one. Why?
A. The bank reserves the right to decide whether to approve your application, even if you apparently meet the eligibility conditions and has the final say on the loan amount approved. The bank’s decision is absolute.
Q. Can I apply for this HSBC balance transfer facility if I already have another balance transfer facility?
A. No. If you’re already enrolled in a balance transfer programme or enjoying special interest rates, you may not be eligible.
Q. Can I terminate this facility while I am still enjoying promotional rates? Will penalties apply?
A. Yes, you can terminate your account. However, HSBC reserves the right to charge you the full interest payable during this period had the prevailing interest rate been applied. You’ll have to settle the debt in full before you cancel the account.
Q. Can I use my borrowings from this credit facility to pay down the outstanding debt on my HSBC credit card or another HSBC credit line?
A. No. You won’t be able to use money from this credit facility to settle debt on a card/personal line of credit from HSBC.
Q. What is an enrolment form? Why do I have to fill it up?
A. You’ll have to fill up an enrolment form only if you don’t have internet banking credentials. This form has to be filled up and submitted along with your supporting documents, if you’re applying online.