How would you react if you were told that you could convert unused credit on your credit card or credit line into extra cash and enjoy interest savings? Well, with this OCBC loan, you’ll not only enjoy this benefit but also have the option to make fixed monthly repayments. The tenure can go up to 5 years and the flat rate of interest starts from 5.8% p.a. We’re going to take a closer look at these features in the following section.
Take a look at the features that you would enjoy with this loan and see how much you could benefit from them:
High Maximum Borrowing Amount: In general, if you want to take this loan on an eligible OCBC card, you may not be able to borrow more than 90% of the credit limit available on the card. The limit will be decided after deducting the processing fee upfront from the loan amount upon approval of your loan application. If you want to draw this loan on your EasiCredit account, you may be eligible for a loan up to the approved credit limit minus the processing fee.
Low Minimum Borrowing Amount: Under this facility, you may not be able to borrow any amount less than S$1,000. This applies to both OCBC cards and EasiCredit credit line.
Affordable Interest Charges: The nominal rate on this loan can be as low as 5.8% p.a. and the effective rate of interest can be as low as 11.38% p.a. With lower interest rates, you can expect savings on your borrowing.
Fixed Monthly Repayments: As you’ll have to make fixed repayments for the entire duration of the loan, you may find it easier to manage your finances. This could make your life easier when budgeting for expenses because you would know the exact instalment amount that you’ll have to make allocations for every month.
Fast Disbursal of Funds: Upon approval of your application, OCBC will credit the loan amount directly to a bank account designated by you.
If you’re a new OCBC card or EasiCredit customer, you may be eligible for one of the lowest interest rates in Singapore when you apply for this loan. However, the offer is valid only until 31 January 2019. Under this special offer, you’ll enjoy a flat rate of interest of 3.5% p.a. The effective interest rate on this loan will start from 6.96% p.a.
Interest charges, to a large extent, determine how economical a loan really is. Take a look at the rates below and decide for yourself how cost-effective this loan is:
|Loan Tenures||Applied Interest Rate||Effective Interest Rate|
|1 year||5.8% p.a.||14.33% p.a.|
|2 years||5.8% p.a.||12.80% p.a.|
|3 years||5.8% p.a.||12.11% p.a.|
|4 years||5.8% p.a.||11.71% p.a.|
|5 years||5.8% p.a.||11.38% p.a.|
Go through the following illustration. We’ll compare the monthly instalment you will pay for this loan vis-a-vis another generic instalment loan and analyse the savings on the two.
Let us assume that you have borrowed S$10,000 through the Cash-on-Instalments facility. Let us say that you have chosen the 2-year tenure for settling the loan. A nominal rate of 5.8% p.a. will be charged on the loan after the processing fee of S$200 (at the rate of 2%) has been deducted from the approved loan amount. That means that interest will be charged on the balance amount of S$9,800 (=10,000-2/100x10,000).
So, your monthly instalment amounts for the entire duration of the loan would be approximately S$465.
To make things easy, let’s name the generic term loan as X. Also, to keep the plane of reference uniform, let us keep the loan amount and tenure same as above. Let’s say that the lender charges a flat rate of 12% p.a. on this loan and the processing fee is 5%. In this case also, the processing fee of S$500 is charged upfront. Therefore, interest would be charged on S$9,500 (=10,000-500) only.
Your monthly instalment in this case would be around S$512 (=10,000/24+12/100x9,500/12).
So, compared to X, you can save S$48 or approximately 10% [=(512-464)/512x100%] more with this OCBC loan facility.
Your savings could be much more if you were to compare it with a credit card or other expensive debt instruments.
[Disclaimer: The numbers used in the example above may bear no resemblance to actual values. They serve no purpose other than illustrative.]
Are you afraid thinking that the interest savings could be eroded to an extent by high fees and charges? That may not be the case with this loan. The following are the types of fees that you need to be aware of:
Here are some points that you may want to consider, analyse, and remember before you apply:
You may be eligible for this loan if:
To check the supporting documents that OCBC might ask for, please click here.
The following are the modes available for submitting your application:
Term loans are convenient. But, if you already have multiple open credit facilities, making a new enquiry could lead to a possible lowering of your credit score. However, in this case, you don’t have to open a new account. You’re simply converting unutilised credit to an instalment loan.The right loan at the right time can often inject you with optimism in addition to solving your money woes. This OCBC product could be such a loan for you. If you have an OCBC card or EasiCredit account and need fresh funds, you could consider it as an option.