| 1. |
Besides interest rates, what else
should I consider before applying for a personal
loan? |
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Besides interest rates, you should also take
the following factors into account:
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Read the terms & conditions carefully-check if there are any other costs and/or hidden fees; |
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Ease of application and approval turnaround time, |
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Convenience of the bank's branch network & application channels. |
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| 2. |
How long does it take for Hang Seng to approve and disburse a loan? |
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Generally, for applications for a Hang Seng Handy Cash Personal Instalment Loan made online, via the Hang Seng 24-hour Personal Loan Application Hotline or in person at a Hang Seng Bank branch, the customer can enjoy same-day approval and cash disbursement if Hang Seng receives all required documents by the designated time, (subject to the actual situation and circumstances at the time of application). For the related terms and conditions of the Hang Seng Handy Cash Personal Instalment Loan, please click
here. |
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| 3. |
Is it necessary to have a Hang Seng bank account before applying for a personal loan from Hang Seng? |
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A Hang Seng bank account is not a prerequisite when applying for a personal loan. If the customer does not have a Hang Seng bank account, he/she will be required to open one for loan disbursement and repayment upon loan approval. The customer can go to any Hang Seng Bank branch for account opening. |
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| 4. |
When applying for a loan, will the bank check my personal credit records in other banks with a credit reference agency (CRA)? |
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Generally, in order to assess the creditworthiness of the customers, banks will check with a CRA which collects information about individual's indebtedness and credit history. In the event that customers wish to access credit reports, the bank will provide the contact details of the relevant CRA. |
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| 5. |
Does borrowing mean that I am incompetent as regards financial management? |
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In general, no. Saving money from your monthly income is of course a good way to get accumulate sufficient cash to buy or do the things you want. However, this involves a "time cost" - you have to wait until you have saved enough money. What's more, you have to take inflation into account when purchasing things - for example, a car. In addition, this "time cost" may mean you sometimes miss something - for example, a timely investment opportunity or bargain sale season. And there may be times when emergencies arise and you need extra cash immediately. Sometimes, people let their budget out of control and they keep increasing their debts - in such cases, debt restructuring or refinancing debts may be needed.
So there are many good reasons for taking out a loan. There are many different kinds of loan to suit individual needs. The trick is to know which one is best for you. |
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| 6. |
What type of loan should I choose? |
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Click here to
choose the right loan product. |
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| 7. |
How much should I borrow? |
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Only borrow what you actually need, not what you might want. It is unwise to spend more than 30% of your gross monthly income on loan repayments (in the case of a home mortgage, this figure can be up to 50%). You must also calculate your other commitments and make sure you can afford to repay the loan without leaving yourself short of money each month. |
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| 8. |
How long should I choose to repay the loan? |
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You should balance the amount you borrow with
the period of the loan and the amount you can
afford to repay each month as the tenor affects
the monthly repayment amount. You must have enough
left of your income after loan repayments to live
and save some money. In most cases, you should
make sure that the period of your loan is not
longer than the duration of whatever you are buying
or doing. |
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| 9. |
Are there repayment methods other than fixed monthly payments? |
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Yes. A regular monthly income makes
repayments easy and allows you to plan your budget.
However, you may have an irregular income and
be unable to budget for a fixed monthly repayment,
or you may require a standby facility for use
only when you need it. In these cases, you can
choose a loan with flexible repayment options,
such as a revolving loan or an overdraft facility. |
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| 10. |
What is the difference between an instalment
loan, a revolving loan and an overdraft? |
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An instalment loan
requires you to repay the principal and interest
regularly, usually monthly. Interest is calculated
at a predetermined interest rate according to
the loan tenor you selected.
A revolving loan
or an overdraft is a credit limit granted to your
revolving or current account, usually for standby
purposes. Interest is calculated on the drawn amount
on a daily basis. The main difference between
the two is the money withdrawal method. A revolving
loan involves an ATM card or credit card to withdraw
cash at an ATM machine or make transactions at
merchants by EPS.
An unsecured overdraft
facility involves the current account and
the transactions made through this account. No
withdrawal fee will be charged for an unsecured
overdraft facility. |
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| 11. |
What is a secured overdraft facility? |
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If you have assets (e.g., deposits, shares,
bonds or investment funds) on hand, you can pledge
these assets against an overdraft facility. A credit
limit obtained in this way is called a secured
overdraft facility. This facility is usually
charged a lower interest rate than an unsecured
overdraft facility or a loan. |
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| 12. |
Am I free to sell my assets if I pledge them
for a secured overdaft facility? |
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Yes, you are free to sell providing that you
settle any outstanding balance with the sale proceeds. |
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| 13. |
I have a secured overdraft facility. Can I also
apply for an unsecured overdraft facility? |
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Yes, you can also apply for the unsecured overdraft
facility. |
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| 14. |
What is the difference between hire purchase
and leasing for a car loan? |
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Hire purchase finances the purchase of vehicles
and plant and equipment. The asset under finance
is purchased by the finance house and hired to
the customer. Its ownership is passed on to the
customer (the hirer) when the last instalment
is paid.
Leasing is another finance arrangement similar
to hire purchase. With a lower interest rate,
leasing requires customers to pay advance rentals
(usually equal to loan tenure + 1, ie customers
of a 4-year loan should pay 4+1=5 monthly instalments
in advance). Leasing is more attractive to customers
who have excess liquidity and would like to pay
advance rentals in exchange for a lower interest
rate. |
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| 15. |
Can I reborrow the money from my instalment
loan? |
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Yes, we have a top-up
arrangement which lets you reborrow your repaid
principal amount.
For a revolving loan or overdraft facility, if
you feel that the credit limit is not sufficient,
you can request an increase on your credit line. |
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| 16. |
What is a monthly flat rate? What's the difference
between that and the annualised percentage rate
(APR)? |
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Monthly flat rate is the common method adopted
by financial institutions to calculate the monthly
repayment amount for an instalment loan, as illustrated below:
Principal |
= |
Loan Amount + Handling Fee |
Handling Fee |
= |
Loan Amount x Handling Fee % p.a. x Tenor
/ 12 |
Interest |
= |
Principal x Monthly Flat Rate x Tenor |
Monthly Repayment
Amount |
= |
(Principal + Interest) / Tenor (up to
1 decimal) |
APR is calculated in accordance with the relevant
guidelines referred to in the Code of Banking
Practice. Interest is calculated on the basis
of a 365-day or 366-day year, including all payable
fees/charges such as the handling fee, premium
fee, etc.
APR is a tool for comparing interest rates, and
expressing the repayment amount and loan amount
ratio. |
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| 17. |
What other costs are involved in borrowing
money? |
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Some common additional costs include:
- Application fees
- Service fee
- Unauthorised overdraft penalty
- Special administration fee
- Overdue handling fee and interest
- Early repayment fee |
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| 18. |
What documents are required for a loan application? |
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Generally the bank needs the following for processing
a loan application:
- HKID card
- Income proof, e.g. bank account monthly statement/passbook
showing your latest one month’s salary
- Current residential address proof, e.g. utility
bills, bank statement
- Any other documents or certificates deemed appropriate |
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| For more tips and information, please consult
the Loan Process and Glossary
sections. |