Loan

Why do I need a loan?

Below are the most common purposes to apply for a loan:

Ø Pay off credit card debts

Ø Wealth planning

Ø Wedding expenses

Ø New parent expenses

Ø Home furnishing or renovation expenses

Ø Further education

Ø Emergency medical expenses

Ø Unanticipated cash needs, etc.

How much should I borrow?

You should borrow the amount that you need and take into consideration your ability to repay the loan, on top of your necessary living expenses.

What repayment term should I choose?

The repayment term will directly affect your monthly repayment amount. You should balance the loan repayment term and the monthly repayment amount you can afford to ensure sufficient liquidity for your living expenses. A longer repayment term will lower your monthly repayment amount, however, the total interest paid will be higher. You should carefully determine your loan repayment term according to your financial capabilities.

What are the required documents for the loan application?

Applicants should provide the following documents for loan application:

Ø Latest 1-3 months income proof, e.g. payroll slip, salary tax demand note, payroll account bank statement/account passbook (with first page showing your name and account number)

Ø Latest 3 months residential address proof, e.g. utility bill or bank statement

Ø Any other documents or certificates our Bank deems appropriate

The Bank reserves the right to request additional documents for application approval.

What is "Rule of 78"?

Monthly instalment amount consists of principal and interest payable. Under the “Rule of 78”, the proportion of interest will be more in earlier instalments comparing to the later ones. Below is an example to demonstrate the calculation of interest fee under the “Rule of 78”. Please note that the Bank may at its discretion apportion the monthly repayments between payment of interest and repayment of principal.

For example, if a loan is to be repaid over 12 instalments, the total interest will be divided into 78 portions (12 + 11 + 10 + … + 1 = 78). 12/78th of the total interest is allocated as the first instalment’s portion of the interest payable, 11/78th of the total interest is allocated as the second instalment’s portion and so on until the twelfth instalment, at which 1/78th of the total interest is allocated as that instalment’s portion of the interest payable.

What is annualized percentage rate (APR)?

Differences between monthly flat rate and annualised percentage rate (APR)?

Monthly flat rate is the method to calculate the total interest expense for an instalment loan：

Total interest amount = Principal Amount x Monthly Flat Rate x Tenor

Annualized Percentage Rate (APR) is calculated using the method specified in relevant guidelines issued by The Hong Kong Association of Banks. APR is a reference rate, which includes all applicable interest rate, fees and charges of the product, expressed as an annualized rate. Please take note that the principal and interest payable for each instalment is uneven. Interest payable is calculated on the basis of the “Rule of 78”. More interest will, in general, be included in earlier instalments, and less on principal.

Why the approved loan amount and interest rate are different from expectation?

The initial approval result is preliminary. The final approved loan amount and interest rate are subject to the individual circumstances and the Bank’s final approval.

Will my loan information appear on my credit report?

Yes, the approved loan information will be reflected in your Credit Report.

How can I repay my loan?

The monthly repayment amount will be debited from your savings account maintained with the Bank on your repayment date.

Do I pay less interest by settling my loan earlier?

It depends. You should consider the fees and charges involved in early settlement before deciding whether to pay off the loan early or not.

You should compare the fees and charges involved in early settlement (including early settlement fee and other charges) and the amount of unpaid interest in the remaining instalments, before making any decision of early settlement. Early settlement fee is charged on the entire principal amount at 1.5% per year according to the remaining tenor rounded up on a yearly basis.

Partial prepayment of the loan is not permitted.

Can I change my repayment period after the loan drawdown?

The loan repayment term selected at drawdown is final and may not be changed. Please ensure that you have carefully read through the loan details before confirming to drawdown.

What should I do if I have any difficulty in repaying the loan over the repayment period?

You should inform the Bank as soon as possible if you have any difficulty in repaying the ln over the repayment period.

How to delete my loan account information from the credit report?

If your account has no payment default in excess of 60 days within the 5 years immediately before account termination, you may submit a written request to the Bank for your account data to be deleted from your credit record maintained with the credit reference agency upon full settlement and termination of your account. On the contrary, if your account has defaulted in excess of 60 days within the aforementioned time period, the credit reference agency may maintain the default payment record beginning from the date of full settlement of your account for 5 years.

Why I cannot early settle my loan / drawdown a loan during 11pm to 1am?

The early settlement and drawdown of loan is not available during 11pm to 1am each day, you may try again after the said period.

Is there any cooling off period for me to cancel the loan after drawdown?

Cooling off period of 8 days (include the date of drawdown) is available for the loan after drawdown:

1. 1-3 day include the drawdown day, no interest & early settlement fee will be charged;

2. 4-8 day include the drawdown day, no early settlement fee will be charged