Besides being an affordable line of credit, your DBS Cashline account can access personal loans and 0% balance transfers too.
When you’re dealing with variable expenses coming from a medical condition, irregular payments from clients, or other unplanned situations, you’re going to need help paying the bills.
Credit card cash advances or quick loans can tide you over, but they literally come at a high price. Because they have such exorbitant interest rates and fees, these credit options might keep you in debt for longer than you’d like.
If you want a personal loan option that also minimizes interest payments, look into a credit line like DBS Cashline. Also known as a standby line of credit, this budget-friendly solution has lower interest rates than a credit card cash advance and gives you access to cash right when you need it.
We explain here how a credit line works and how to use DBS Cashline to get the best deal for yourself.
What is a Credit Line, and How Does It Work?
A credit line is a type of loan that lets you borrow any amount within a stated credit limit. Unlike a personal instalment loan, where a bank lends you a fixed amount that you must immediately start repaying through monthly instalments, a credit line only charges interest and fees on the cash you withdraw.
Once you have a credit line, you can access your cash through several methods, the most convenient of which is through an ATM. This is what makes it ideal for handling short-term expenses.
Think of a credit line as an emergency fund you can borrow from the bank. While it’s always better to have your own cash savings, sometimes we face ongoing, unplanned expenses that our emergency funds can’t handle. In these situations, a credit line can tide you over at interest rates you can afford.
Like a credit card, credit lines don’t have a fixed repayment scheme. You can pay as little as the minimum sum during a month when cash is tight, or pay everything off within the next due date. In general, it is good to pay off as much of what you owe as possible, to minimise interest.
DBS Cashline is More Than a Credit Line
DBS Cashline works exactly like a credit line, but it is also a lot more than that.
Besides giving you standby access to cash, DBS Cashline can also be used as an account to take up other unsecured loans. This means that if you need a personal loan or balance transfer from DBS, you can get it through your Cashline account, and borrow up to the credit limit assigned to you.
Because of these features, your Cashline account can help you with the following, without the risk of overspending on interest:
Short-Term Expenses (Days to Less Than 6 Months)
Credit lines are designed to deal with short-term financial needs. As such, you might find it helpful for making ends meet if you earn commissions or otherwise have irregular income.
At 19.8% p.a., withdrawing cash through your DBS Cashline will cost you less than taking a credit card cash advance.
Let’s say you need to withdraw S$1,000 and can only pay it back within 30 days. The interest you will accumulate from it is only S$16.20. On the other hand, a credit card cash advance has an interest rate of 28% p.a. Withdrawing this same amount will cost you S$23 in interest and a S$60 withdrawal fee.
Of course, the sooner you pay back what you withdrew from your Cashline account, the less you pay in interest.
If you need to take care of a big expense like medical bills or course fees for a new skill, you can pay for it with a personal loan through your Cashline account.
If, for example, your Cashline account has an unused credit limit of S$10,000, you can use this to pay for your expenses instead of applying for a different personal loan. All you need to do is fill up a form to get a DBS personal loan through your Cashline account – no need to submit income documents or do further paperwork.
Once you have the loan, you can repay it through fixed monthly instalments over a period of 1 to 5 years. You also enjoy a much lower interest rate (around 6.99% to 11% p.a.), and a small 2-4% processing fee. This makes bigger loans a lot easier to manage. As you repay what you’ve borrowed, the credit limit on your Cashline account gets restored.
Paying Off Credit Card Debt at 0% Interest
Got a credit card with outstanding balance you just can’t see to get rid of? A 0% balance transfer can help you pay it off and save you money on interest. With a balance transfer, you can move your credit card’s outstanding balance to a 0% interest rate loan for a fixed time period. If you can pay it off within the time period, you can avoid paying the high interest rate of 19 – 26% that would be charged to your credit card.
Your Cashline account can give you access to a 6- or 12-month 0% interest balance transfer. Just like the personal loan, all you need to do is fill up a form and pay a small admin fee of 2.5% – 4.5%. You then have 6 or 12 months to pay off your credit card debt.
Even if you have a balance left after the grace period, you will only be charged Cashline’s prevailing interest rate. At 19.8% p.a., this is significantly lower than a credit card’s interest rate (typically 24% p.a.). Still, we recommend paying off your whole balance within the 0% interest grace period.
Other Reasons to Use DBS Cashline
If you think a credit line can help you, consider using DBS Cashline. At 19.8% p.a., this option charges a lot less than the average cash advance from a credit card (around 28% p.a.). But there are other reasons to use Cashline as well:
1. Fast, Hassle-Free Application Process
If you are an existing DBS Customer and have a DBS Internet Banking (IB) account, you can apply for a DBS Cashline account by simply logging in using your DBS IB user ID and password. The application process only takes about 10 minutes online, and you’ll get approval quickly.
You can also download the DBS Quick Credit App on the App Store or Google Play. Use this to apply and receive approval-in-principle within minutes.
Once your Cashline account has been approved, you can log on to your IB account to transfer cash, top up your Cashline, and request for an IB e-cheque online.
2. Borrow Up to 4 Times Your Monthly Salary
Your credit limit depends on several factors like your annual income and credit score. In general, however, DBS Cashline lets you borrow as much as 4 times your monthly income. If your annual income is S$120,000 and above, you can borrow up to 10 times your monthly income.
3. Up to S$180 Cashback When You Apply Online
If you’ve decided DBS Cashline is for you, make sure to apply online before 31 May 2017. If you do so, you receive S$180 cashback when you sign up successfully!
You also get an additional S$60 cashback when you withdraw at least S$500 from your credit line within the first 2 months.
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By Lauren Dado
Lauren has been a content strategist and digital marketer since 2007. As SingSaver.com.sg’s Content Manager, Lauren edits and publishes personal finance stories to help Singaporeans save money. Her work has appeared in publications like Her World, Asia One, and Women’s Weekly.