Cash woes? A personal loan to the rescue!
  • HSBC Term Loan Review: Suitable for Those With High Borrowing Needs

    HSBC Term Loan Review: Suitable for Those With High Borrowing Needs

    Planned a big-ticket purchase without managing to arrange for the necessary funds? The HSBC Personal Loan, which is basically a term loan, could be a suitable option for you. You can make fixed monthly payments, which could make budgeting and maintaining a stable cash flow easier. In addition, you may enjoy nominal interest rates as low as 3.7% p.a. You may be able to get a loan up to 8 times your monthly income and stretch payments up to 7 years. Let us now learn more about these features in the following section:

    Fast In-Principle Approval, High Borrowing Limit: Can the Loan Fully Meet Your Expectations?

    Here are the most attractive features and benefits of this loan:

    High Borrowing Limit: You can borrow up to 8x your monthly income, subject to a cap of S$200,000 with this loan. However, the actual loan amount will depend on:

    • Your annual income.
    • The maximum credit limit that has been approved by HSBC for all your unsecured credit facilities.

    There could be other terms and conditions also.

    Minimum Borrowing Limit: With this loan, you can borrow an amount starting from S$5,000.

    Provision to Redraw From Existing Loan Account: If you wish to, you can redraw a minimum amount of S$1,000 from your existing HSBC loan account. This is a unique feature and it isn’t offered by many other banks. If your application for loan redraw is approved, a new loan account would be created. You’ll be informed of the approval via a notification letter. Once the account is set up, instalment amounts for the new loan will be deducted directly from your repayment account. You may have to submit your updated income documents for loan processing.

    Affordable Borrowing Cost: Your borrowing cost could be low thanks to low interest rates. The nominal interest rate on this loan starts from 3.7% p.a. and the effective interest rate starts from 7% p.a.

    Long Loan Tenure: There are multiple loan tenure options, starting from 1 year and going up to 7 years. Due to this flexibility, you can choose a repayment period that you’re comfortable managing. This could also ensure that you can plan better and keep your monthly cash flow stable.

    Fast Approval: You may get an in-principle approval as soon as you apply online. It could happen in a matter of minutes. This could, however, be subject to conditions. Also, the in-principle approval will only be valid for 14 days from the time of such approval. You must send the relevant documents to the bank by then for processing.

    Fast Cash Disbursal: If you submit a complete application with valid documents and if your application is approved, your loan funds may be released by the next day. This feature is only available for loan amounts not exceeding S$100,000.

    Easy Access to Funds: You can withdraw funds using any of the following modes:

    • Withdraw funds via ATM (using the debit card given to you by the bank).
    • A repayment account will be set up by HSBC along with your loan account. You can then visit an HSBC branch and withdraw funds over the counter.

    Multiple Loan Repayment Modes: You can transfer funds to your repayment savings account held with HSBC using any of the following channels:

    • Electronic bank transfer methods.
    • By cash.
    • By issuing crossed cheques.

    Account Statements, Which Make Monitoring of Account Easy: The bank will send you a loan statement every year containing details of your transactions and outstanding balances. You’ll also receive a composite statement every month that will contain transactions details of all the loan accounts you hold with HSBC, except for the bank’s personal line of credit facility.

    Enjoy Attractive Promotional Rates of Interest and Incentives

    Subject to the following conditions, you may be eligible for promotional rates of interest and other offers:

    • You have applied for this loan online by 30 November 2018 and your application has been approved by HSBC by 31 December 2018.
    • You have agreed to receive promotional messages and materials from the bank. You’ll have to indicate your consent on the application form.

    Provided you have applied successfully for this loan online during the period of promotion, you can enjoy the following offers:

    • Get cashback of S$50 within 3 months of loan approval. This cashback will be credited to your Statement Savings Account held with HSBC.
    • You’ll also enjoy a processing fee waiver of S$88.
    • You’ll also enjoy the following special effective rates of interest (EIR):
      • An EIR of 13% p.a. if the loan tenure doesn’t exceed 2 years.
      • An EIR of 9% p.a. if the loan tenure is 3 years or more and your annual income is between S$30,000 and S$80,000.
      • An EIR of 7% p.a. if the loan tenure is 3 years or more and your annual income exceeds S$80,000.

    The bank runs promotions targeting new and existing customers from time to time. Hence, keep an eye out for these offers to get more value for money.

    Save More Money on Your Loan Courtesy Low Interest Rates

    Depending on your annual income and the loan tenure that you have chosen, you may enjoy the following interest rates:

    For Annual Income in Excess of S$80,000

    The following interest rates apply currently:

    Loan Tenure Flat Rate of Interest Effective Rate of Interest
    1 year 7.2% p.a. 13% p.a.
    2 years 7.1% p.a. 13% p.a.
    3 to 4 years 3.7% p.a. 7% p.a.
    5 to 7 years 3.8% p.a. 7% p.a.

    For Annual Income Between S$30,000 and S$80,000

    The following interest rates apply currently:

    Loan Tenure Flat Rate of Interest Effective Rate of Interest
    1 year 7.2% p.a. 13% p.a.
    2 years 7.1% p.a. 13% p.a.
    3 years 4.8% p.a. 9% p.a.
    4 to 5 years 4.9% p.a. 9% p.a.
    6 to 7 years 5% p.a. 9% p.a.

    To help you understand how much you save on interest payments, we’ll make an illustration below:

    Check this page to learn more about interest rates on other types of HSBC loans.

    What Are the Fees and Charges on This Loan?

    Here are some of the most common charges that you may encounter:

    • A processing fee of S$88 (currently waived).
    • A late payment fee of S$75.
    • An overdue interest, which is 2.5% above the prevailing interest rate. This rate will apply to the outstanding loan balance.
    • An early repayment fee, which is 2.5% of the amount redeemed.
    • A default interest rate, which is 3% above the personal loan rate of interest.
    • S$20 per copy, if you wish to retrieve past statements.

    Examine the Following Points Closely: Promotional Offers May Not Be Available for Redraw

    Before you apply, think about the following points long and hard:

    • The loan amount can’t exceed S$200,000.
    • The loan amount for those earning less than S$120,000 won’t exceed 4x their income. In any case, the loan amount will be subject to the combined credit limit available for all the unsecured credit facilities you hold with the bank.
    • If you apply for a loan amount less than S$5,000, your application may be rejected.
    • If you’re an existing customer who is applying for a loan redraw, you may not be eligible for the special offers and deals.
    • You can’t redraw any amount less than S$1,000.
    • If you cancel your loan account or make a full/partial prepayment within a year of signing up for which you had received cashback, you’ll have to refund the amount in full.
    • The next-day-loan-disbursal facility is not available on loan redraw.
    • Interest is calculated using the reducing balance method on a 365-days-per-year basis.
    • If you wish to prepay the loan in full or part, you’ll have to intimate the bank in writing at least a month before the actual settlement date. The bank will send you details such as the repayment date and amount, accordingly.
    • The first repayment due date will usually be one month after the loan approval date. Every subsequent repayment will usually be the first date of the following month. You may find out more about the due date on your letter of notification.
    • If you’re receiving staff-eligible preferential rates, you may not be eligible for a redraw unless stated otherwise by the bank.
    • The loan tenures of 6 years and 7 years are available only to salaried employees.
    • The loan tenure for foreign applicants won’t exceed the validity remaining on their employment passes. However, it will be rounded off to the nearest whole year.

    Ready to Submit Your Application? Check the Eligibility Conditions Here Before You Do So

    You’ll be eligible if:

    • You’re aged between 21 years and 65 years.
    • Your annual income is at least S$30,000, if you’re a Singaporean or PR, and S$40,000 if you’re a foreigner. Foreigners can apply only if they have an employment pass which is valid for at least 1 year from the time of application.

    To learn more about the general HSBC loan eligibility requirements and supporting documents, click here.

    Submit Your Application in a Painless Manner

    Wish to go forward with the loan application? Do it in a hassle-free manner using any of the following modes:

    • Apply through the bank’s website.
    • Complete the process at an HSBC branch.
    • Call the bank’s 24-hour customer service hotline.

    Click here to learn more about the application process of HSBC loans.

    Do you sometimes hope that you could have just wished away your heavy-duty financial commitments? Well, you probably know it well enough that it may not be possible. However, if you can’t wiggle out of such a tight financial corner on your own, you could consider this loan as an option.

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