Interest rates

OCBC Personal Loan Review: Interest Rates, Approval Times and Loan Amounts, Money News

Being in debt is no fun, and you definitely shouldn’t take out personal loans for fun.

But in some cases, it can be a smart financial decision – when you’re struggling with high-interest debt, like credit card debt, and want to consolidate your loans to lower your interest payments. .

Many banks in Singapore offer personal loans. Let’s see how the OCBC personal loan is measured.

OCBC Personal Loan Eligibility

To apply for an OCBC personal loan, you must be at least 21 years old. You must earn at least $20,000 in annual income if you are a Singaporean/PR or $45,000 if you are a foreigner.

OCBC Personal Loan Interest Rates (2022)

OCBC offers several different ways to borrow money. Their standard personal loan is called OCBC ExtraCash Loan, which gives you a loan amount of two to six times your monthly income. wowsix times leh!

Take note, you can only take out a 6x loan if your annual income is over $120,000 – earn that much and still take a loan for what, right?

Current OCBC ExtraCash Personal Loan interest rates range from 5.42% to 5.54% (EIR from 10.96% to 13.92%).

It is significantly higher when you compare it to the current rates offered by other banks, such as 3.88% for POSB and DBS personal loans, 3.2% for HSBC personal loans and 3.4% for personal loans. UOB staff.

Other costs you need to consider include a processing fee of 2% (or $200 maximum) that will be deducted from the loan amount you receive.

Does OCBC offer a line of credit?

Yes, it’s called OCBC Cash-on-Instalments.

If you really need cash, it is better to get it by installment payment rather than just paying directly with your credit card because the interest rate is lower.

You can borrow money for one to five years at an interest rate of 3.5% per year and pay a $100 processing fee.

The effective interest rate (EIR) is approximately 7.27% per year for the $10,000/3 year example.

Note that OCBC Cash-on-Installation also comes with a 1% processing fee! So shop around and consider other personal loans in Singapore if you are looking for a good deal.

ALSO READ: American Express True Cashback Card review: A low effort card with no cashback limit

Other OCBC Personal Loan Options

We’ve covered OCBC Cash-on-Instalments (the best OCBC personal loan option, but not the best on the market) and OCBC ExtraCash Loan (the more expensive of the two), but there are two other OCBC products that promise “easy cash “.

The first is an emergency line of credit called OCBC EasiCredit. It’s like a credit card, except for cash (if that makes sense). Once approved, you can withdraw money how and when you want using an ATM card.

The interest rate for those with an annual income of at least $30,000 is 20.90%. Earn less than that and you’ll pay 29.8%, which is basically as bad as going into debt on a credit card.

There’s also OCBC Balance Transfer, which is a different product that lets you consolidate your outstanding credit card debt into a structured repayment plan. You can learn more about balance transfers here.

OCBC Personal Loan Promotions

Through June 30, 2022, you can receive 1.2% cash back and $100 cash back when you apply online for an OCBC Cash-on-Installments line of credit for new customers who take out a loan of $10,000 or more.

We hope you are sane enough NOT to overborrow in order to get a higher repayment amount. That would be silly, considering you’ll always end up paying more interest.

How to Use the OCBC Personal Loan Calculator

Scroll down the OCBC page on Cash-on-Installment (fixed redemption) and you will find the OCBC Personal Loan Calculator for their installment loan.

Enter the amount you want to borrow and the length of time you want to pay it back, and the calculator will display your monthly payment, processing fee, interest rate, and EIR.

OCBC Debt Consolidation Plan

If you have high-interest debt, such as an unpaid credit card balance, OCBC Debt Consolidation Plan is another option.

Transfer your existing debt to OCBC and you’ll pay a relatively low interest rate compared to a credit card (although it’s usually higher than a personal loan).

Why opt for this one rather than for the installment loan? Well, if you’ve already gone over your credit limit with OCBC, you won’t be eligible for cash payouts.

Cash installments also offer a maximum term of five years, while the debt consolidation plan offers up to eight years.

However, debt consolidation plans are for Singaporeans/PRs with at least one year of debt income only.

How long does approval take for OCBC personal loans?

To apply for an OCBC Cash-on-Installment loan, you must be an existing user of an OCBC online banking account.

If not, you will need to go through the entire process of setting up an OCBC online banking account.

Later, the approval will be instant and the money will be transferred to a bank account chosen by you.

A word of warning about personal loans

There are so many loans on offer, you’re in luck…right? Not really! Although the OCBC Cash-on-Installation personal loan certainly charges lower interest rates than a credit card, it is still a high-interest form of debt.

This means that personal loans should only be used as a last resort to avoid incurring credit card debt or consolidating existing debt.

If you regularly use personal loans, it’s time to take a look at your finances. Chances are, you need to constantly reduce your expenses and/or find ways to increase your income in order to stay out of debt.

You will also need to build an emergency fund, which you can turn to when unexpected expenses arise instead of going into debt.

READ ALSO : 7 Best Personal Accident Insurance Plans Under $150 in Singapore (2022)

This article was first published in MoneySmart.