If you are strapped for cash, or if you have plans borrow periodically, a credit line could be an option for you have access to money when you need it.
Sometimes confused for a personal loan, a line of credit is a flexible loan option which serves as an emergency standby cash facility. Being an overdraft facility, you can withdraw cash via ATM, cheque, internet banking or the physical branch. You only get charged interest when you withdraw from the account, unlike personal loans in which you pay fixed monthly installments with the annual interest rate.
When you have paid the outstanding balance in full, the interest charges stop. A line of credit can also be beneficial when you need to borrow money incrementally. Some examples include paying contractors for your home renovations, or installments for your dream wedding.
The downside? There is an annual fee of between S$60 and S$120 to maintain this credit facility, although some banks may choose to waive it for a certain period of time.
Here’s a list of the best line of credit offerings in Singapore.
|Best For||Credit Line||Benefits|
|Lowest Interest Rate||HSBC Personal Line of Credit||As low as 12% interest to existing HSBC customers|
|Low Income||DBS Cashline||Eligible for annual income earners between S$20,000 and S$30,000|
|Short Term Loan||UOB CashPlus||0% interest rate for 3 months (new to bank customers).Annual fee waived for first year.|
Best for Low Interest Rate: HSBC Personal Line of Credit
If you are looking for the lowest prevailing interest rate, HSBC's personal line of credit is the cheapest option.
You can get a credit limit up to 4 times your monthly income (for those earning no more than S$120,000 per annum) or a maximum of S$200,000. Those earning more than S$120,000 annually can qualify for up to 8 times the monthly income.
Depending on your customer status, you can get an interest rate as low as 12% or 16.5% (Premier and Revolution/Advance members respectively) - the market average stands at about 19.8%. All other customers are tagged to an interest rate of 18.5%.
The annual fee of S$60 is waived for the first year and additional annual fee waivers are available for higher tiered customers.
While the HSBC Personal Line of Credit acts as an ‘on standby’ low-interest credit facility for you, you could consider HSBC’s Balance Transfer loan at 0% interest if your loan amount is S$10,000 and above, for a tenure of 6 months.
Best for Meeting Minimum Income: DBS Cashline
If you find yourself struggling to meet application requirements, consider a Credit Line account with DBS Cashline.
Unlike most other lines of credit that set the bar at S$30,000, DBS Cashline offers a credit line account of 2 times your monthly salary for those earning S$20,000 to S$30,000 per annum. On the flip side, high income earners of S$120,000 and above enjoy a bumper high of 10 times their salary. It also offers a low daily interest rate of 0.06%, based on the prevailing annual interest rate of 20.5%.
DBS Cashline is convenient and simple to use; you can use it to transfer funds, withdraw cash and pay bills via ATMs, internet banking, chequebook and AXS machines. Other than that, for the application process, you could easily pull personal details from MyInfo and save yourself the headache of preparing a stack of income documents.
DBS Cashline charges an annual fee of S$120 that is waived during the first year. There are no additional charges for early repayment.
Best for Short Term Loan: UOB CashPlus
If you are looking for a short term line of credit, UOB CashPlus is the way to go.
UOB’s new line of credit offer, UOB CashPlus, is offering a 0% interest loan for the first 3 months. If that sounds too good to be true, it can be - assuming you’re looking at a very short-term tenure and you’re a new customer. It also comes with a waived S$100 processing fee.
The maximum credit limit is up to 6 times your monthly income for those earning above S$10,000 (4 times if your monthly income is below S$10,000). Additionally, you will also receive a UOB CashPlus Visa Card, which entitles you to up to 10% cash rebate (capped at S$50 per month) on all spend, without any minimum spend.
That’s not all; you can get up to 10% SMART$ rebate at over 300 participating SMART$ merchants' outlets to contribute to your savings.
After the first three months, it reverts to the prevailing interest rate of 19.98% per annum (or 1.67% per month).
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