Read the latest news about financial products in Hong Kong and the best money saving tips.
Tax loans are special loans that usually offered from during tax season from October through April of each year while customers can borrow personal loans any time of the year. Tax loans generally offers lower interest rates with smaller loan amount and shorter repayment period. In Hong Kong, banks like BEA, Bank of China, Standard Chartered, Citibank and Fubon bank will provide tax loans starting from mid-October to help customers.
The repayment period for tax loans is usually 12-24 months and some banks even offer loan tenor of six months. The maximum loan amount that applicants can borrow can be up to 10-12 times of their monthly salary.
In general, there is not much difference in the procedure of applying for a personal loan and a tax loan, but you have to submit your salaries tax assessment demand notes during application for tax loans. You should also check if the bank will charge you handling fee and early repayment fee, or provide special offers such as cash rebate and handling fee wavier. Compare annualized percentage rate (APR), interest rates, total repayment amount and tenor at MoneyHero now to find the tax loan that best suits your needs.
The application requirements of tax loans are usually similar to those of personal loans, and the application processes are simple and convenient. Generally, all applicants can apply online or by phone, or visit any branch for inquiry. Supporting documents include Hong Kong Identity card, tax demand note, income proof and residential address proof. After completing the application, the bank or financial institution will inform the borrower of the approval result.
The nature of tax loans and personal loans are actually rather similar, but since the interest rates of tax loans are usually lower, some applicants may spend the loan money on specific purposes other than tax payment, such as investment and credit card payment. Please keep in mind that tax loans are short-term loans with the maximum repayment period of two years; and the late payment interest penalties could be very costly, which means you have to bear high risks if you spend the tax loan money on long-term investment.
Interest rates charged on tax loans are generally lower than for personal loans. Nevertheless, the usual repayment period of a tax loan is much shorter than other types of loans, and the max. loan amount is relative lower than other loans. The actual interest rate of a tax loan is affected by loan amount and repayment period.
You should compare tax loans offered by different providers using the APR, an annual rate that shows the total yearly cost of borrowing, including any fees and additional charges associated with the loan. This gives you a much better idea of which tax loan costs you the least.
Generally, you can apply for tax loans from October through April of each year.
Intense competition appears in the tax loan market every year during the tax season in Hong Kong. In that period, every bank launch new tax loan offers to attract customers with the wording of "lowest interest rate", making it hard for consumers to make a wise decision. MoneyHero is a free financial comparison platform that provide the latest information on tax loan products. We keep the list updated in order to help consumers to compare tax loan products at one glance.
Some banks offer additional discounts for online applicants no matter they are new or existing customers. To maximize your savings, find out which lenders offer these promotions through MoneyHero!