Personal Loans can be used for a number of things including
Generally, it is advisable to limit the amount of your loan that you require. The general rule of thumb is to limit you total loan repayments (including mortgages and credit cards) to not more than 30% to 40% of your gross monthly income.
Please check if you meet the bank's eligibility criteria. It varies by banks, but in general you should be a Hong Kong permanent resident aged 18 or above with a minimum monthly income of around HKD$5,000.00
Make sure all your application documentation is in order. A typical personal loan application in Hong Kong would require the following documents:
Note that banks have access to your credit history report from credit reference agencies such as TransUnion as part of their evaluation process. Therefore, maintaining a good credit history and demonstrating an ability to repay the loan would be an important factor in ensuring successful application.
Expatriates that have been living long in Hong Kong or holders of a Hong Kong Permanent Identity Card can easily apply for personal loans from the banks. If you're new in Hong Kong though, you should be realistic with your expectations in getting quick approval for personal bank loans after you've only been in Hong Kong for a while and have a limited credit history.
Since personal loans are unsecured lines of credit, local banks will carefully evaluate your assessment in terms of being financially responsible even if you have a stable job and a monthly income. Local banks generally prefer to deal with people that have prior banking relationships and have proven to be trustworthy. As such you should work on establishing and maintaining a good relationship with your local banks before applying for loans.
Alternatively, new expatriates could try applying for personal loans with consumer finance companies or registered private lenders that have higher risk appetites and specialize in personal loans to foreigners.
No, it is not. It is only a reference point. The final interest rate varies due to several reasons. Before banks decide the final quote for each customer, they will first examine their past credit records and current cash flow.
If the customer has a good credit record, they may qualify for a lower rate. At the same time, banks can charge a higher interest rate to the customers with tarnished credit records. Since these customers are perceived as a higher risk investment, they are charged comparatively higher. Therefore, a healthy credit record puts you at a great advantage and makes you more likely to get a lower interest rate on a loan.
The formula for total interest amount:
Principal x Monthly Flat Rate x Tenor (months)
In Hong Kong, the monthly flat rate is the common method used by constitutes in computing the total interest expenses for an instalment loan.
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