Need money to pay a contractor who is working on your home refurbishing project? If you need cash to make incremental payments like you would, in this case, then taking a personal line of credit is the best way to go.
The easiest way to understand what a personal line of credit is to think of it as a loan that is used in much the same way as a credit card. The bank approves the entire loan amount at once, but you can withdraw only the amount you need for the moment. Moreover, the interest that you pay is on the amount that you have used and not on the entire amount that the bank has allowed you to use.
These loans are unsecured loans, which mean that they do not require any collateral to be pledged to the bank. A personal line of credit comes in especially handy for people whose income may not be regular. To ensure that you make the right decision, here are the best personal line of credit products offered by banks in Singapore.
Personal Lines of Credit with Low Rates of Interest
As mentioned earlier, the interest that you pay on your personal line of credit is only on the amount that you use. Banks, however, will charge you an annual fee to provide you this facility. The following personal credit lines not only have low annual fees but also charge low rates of interest.
1. Maybank CreditAble
If you are looking for a personal line of credit for a short period of time, then Maybank’s CreditAble is a good option. This line of credit provides you with a loan amount that is up to 4 times your monthly income. The interest rate that is charged for the first year is 9% per year, while the effective rate of interest is 19.8% annually.
If you aren’t able to pay the interest on the entire amount, then the minimum amount that needs to be paid is just 3% of your outstanding balance. What’s more, you also get your annual fee of S$80 waived for the first 2 years. As per their current promotional offer, if you apply for a line of credit online, you can also enjoy a S$120 cash credit. However, if you are looking for an amount higher than 4 times your monthly salary, you are better off taking a line of credit from another bank.
2. HSBC Personal Line of Credit
If you are looking for a personal line of credit that you will need to use across a few years at least, then HSBC’s personal line of credit is the product that you should opt for. The biggest advantage of this product is that its effective rate of interest is 18.5% each year. This is lower than what most banks offer for lines of credit with longer tenures. The interest rate is even lower for HSBC Premier customers and for Advance and Revolution customers, at 12% and 16.5% p.a. respectively.
The annual fee of S$60 is waived for the first year for all customers, and loyal HSBC customers get the fee waiver for the first 2 years. HSBC also provides credit lines up to 6 times your monthly income if you earn S$120,000 and above annually.
3. DBS Cashline
DBS Cashline is the ideal option if you are looking for a large credit line. If your annual income is S$120,000 then you will be able to borrow 10 times the income you earn every month. While its effective interest rate of 19.8% p.a. is similar to other banks, its annual fee of S$100 is waived for the first year. If, however, your annual income is between S$20,000 and S$30,000, then your credit limit is only 4 times your monthly income and the effective interest rate charged is higher than most other banks at 29.8% p.a.
4. OCBC EasiCredit
OCBC is another bank that provides you with a monthly credit limit up to 6 times the income you earn every month if your salary is S$120,000 and above. The annual fee of S$80 for OCBC EasiCredit is waived for the first year if you earn a minimum of S$30,000 each year. It also has a low minimum interest charge of S$5. The EIR is 19.8% per year for those with annual income of S$30,000 or more, and 29.8% annually for those who earn lower than that.
5. UOB CashPlus
UOB CashPlus allows you to borrow cash up to S$200,000. Unlike other personal line of credit offerings, UOB CashPlus gives you two repayment options. The flexible repayment option allows you to pay as little as S$30 every month, while the fixed payment option requires you to pay fixed monthly instalments for up to 60 months. Along with this, you can also enjoy the benefits of the UOB CashPlus Visa Card. The interest rates start at 1.65% per month.
6. Citibank Ready Credit
If you are looking for a credit line for a tenure of 12, 24 or 36 months, then Citibank Ready Credit is a good option. New customers who apply for a Citibank Ready Credit account can also enjoy Citibank Ready Credit PayLite at a promotional effective rate of interest of 8.50% p.a. Moreover, when your line of credit is approved, you will also be given Citibank’s Ready Credit Card which can be used to get a cash rebate of 1% on all retail and online shopping.
Best Personal Credit Line Comparison
The best personal line of credit offerings in Singapore are summarised in the following table:
|Bank||Annual Income Required||Maximum Credit Limit (S$)||Effective Interest Rate (p.a.)||Annual Fee|
|Maybank CreditAble||S$30,000||4x monthly income||Year 1: 9% |
Year 2 onwards: 19.8%
|S$80, waived for the first 2 years|
|HSBC Personal Line of Credit||S$30,000 |
(For foreigners, S$40,000)
|2x monthly income||18.5%||S$60, waived for the first year|
|Revolution and Advance Customers||2x monthly income||16.5%||S$60, waived for the first 2 years|
|Premier Customers||2x monthly income||12%||No annual fee|
|DBS Cashline||S$20,000||4x monthly income||29.8%||S$100, waived for the first year|
|S$30,000||4x monthly income||19.8%||S$100, waived for the first year|
|S$120,000||10x monthly income||19.8%||S$100, waived for the first year|
|OCBC EasiCredit||S$20,000||2x monthly income||29.8%||S$80|
(S$45,000 for foreign nationals)
|4x monthly income||19.98%||S$80, waived for the first year.|
(For Citizens and foreign nationals)
|6x monthly income||19.98%||S$80 |
Waived for the first year.
|UOB CashPlus||S$30,000||4x monthly income||19.8%||S$80|
|S$120,000||6x monthly income||19.8%||S$80|
|Citibank Ready Credit||S$30,000 |
(S$42,000 for foreign nationals)
|4x monthly income||8.50% (Promotional offer for Citibank Ready Credit PayLite)||S$80, waived for the first year|
A personal line of credit, as stated earlier, is an unsecured borrowing. As such, your credit score plays a huge role in determining if the bank will give you a line of credit or not. One thing to keep in mind before applying is whether you really need to borrow this money and more importantly if you will be able to repay it.
Credit lines, like credit cards, do offer low minimum monthly payments, but just like with credit cards, only paying the minimum amount will not help you clear your debt and the amount that you have to pay will only increase. If you are thinking of applying for a personal line of credit, though, this page can help you make the right decision.