loans

According to the definition by the Hong Kong Monetary Authority, a virtual bank is a bank that primarily offers retail banking services through the internet or other electronic channels instead of physical branches. The HKMA believes virtual banks can promote fintech and innovation in Hong Kong and provide customers with new experiences.

What is a virtual bank?

Licensed virtual banks in Hong Kong include ZA Bank, Airstar Bank, MOX Bank, livi bank, WeLab Bank, Ant Bank, PAO Bank, and Fusion Bank.

Which virtual banks are there in Hong Kong?

The eligibility criteria for opening a virtual bank account vary slightly depending on each bank but mainly require the following:<br/><br/>- Being at least 18 years old<br/>- Holding a valid Hong Kong identity card<br/>- Having a Hong Kong mobile number for receiving SMS<br/>- Having a valid Hong Kong residential address

What are the eligibility criteria for opening a virtual bank account?

Deposits to virtual bank accounts can mainly be made through Faster Payment System (FPS), electronic Direct Debit Authorization (eDDA), and account number transfer.

How can the money be deposited into a virtual bank account?

Some virtual banks allow customers can withdraw cash through ATMs. Otherwise, customers have to transfer money to another bank account to withdraw cash.

How can virtual bank customer withdraw their money?

Like traditional retail banks, all virtual banks participate in Deposit Protection Scheme, and depositors are eligible for up to HK$ 500,000 in deposit protection.

Do virtual banks participate in the Deposit Protection Scheme?

 Virtual banks are neobanks that do not have physical retail presence. Their services are 100% digital and the services can range from deposit, personal loan, debit/credit card or even insurance. Learn more about the welcome offers of Hong Kong virtual banks. 

Virtual Bank Hong Kong: Comparison, Promo Codes & Welcome Offers


<p>Can you get a loan without income proof? Anyone can experience financial difficulties, but for those with an unstable income, self-employed individuals, or unemployed individuals such as students and homemakers, it can be challenging to provide income proof when applying for a personal loan.</p>



<p>Fortunately, banks and financial institutions now offer &#8220;no document loans&#8221; or &#8220;no income proof loans&#8221; that allow borrowers to apply without providing income verification or specific documents, making the loan application process more convenient and efficient.</p>



<p>Learn more about no-doc loans.</p>



<h2>What are No-Documentation Loans or Loans without Income Proof?</h2>



<p>When applying for a personal loan, at least three specific documents are required as proof for approval, namely income proof, address proof, and identity proof. Loan institutions evaluate a borrower&#8217;s repayment ability based on these documents and check their credit score before approving the loan amount, actual annual interest rate, and other terms.</p>



<p>The term &#8220;no-documentation loan&#8221; does not always mean that no documents are required for application. In a broader sense, it refers to the situation where one of the three specific documents does not need to be provided, which can also be called a &#8220;no-documentation&#8221; loan. </p>



<p>The most common situation is when the applicant cannot provide income proof, and banks and financial institutions offer them &#8220;loans without income proof&#8221; or &#8220;no income verification loan.&#8221; Although some documents can be waived, identity proof is still required.</p>



<loan-table> language=&#8221;en&#8221; </loan-table>



<h2>No-Doc Loans Offered by Banks and Financial Institutions</h2>



<p>In the past, no-doc or no-income proof loans were mostly provided by lending companies. However, in 2018, the Hong Kong Monetary Authority issued new guidelines for credit risk management in personal loan businesses to banks. The guidelines allowed banks to establish a &#8220;New Personal-Lending Portfolio&#8221; and offer online no-documentation loan services, with loan amounts recommended to be lower than traditional <a href="https://www.planto.hk/en/blog/personal-loan-APR-comparison/">personal loans</a>.</p>



<p>Banks no longer need to strictly follow traditional personal loan approval methods when approving no-doc loans, such as collecting customers&#8217; income proof. Instead, they can use big data and behavioral pattern analysis to assess customers&#8217; repayment ability and loan risk as the basis for approval and loan amount.</p>



<p>Besides traditional banks, more virtual banks and financial institutions are entering the personal loan market. The advancement of technology has simplified loan applications further. The most common type of loan on the market now is the so-called &#8220;loan without income proof,&#8221; which eliminates income proof, such as pay stubs and tax forms, and only requires identity and address proof. In some cases, even address proof can be waived.</p>



<h2>Characteristics of No-Doc Loan/No-Income Proof Loan</h2>



<ul>
<li><strong>Quick and easy application process:</strong> Banks and financial institutions that offer no-doc loan products often provide online application services, allowing applicants to submit supporting documents online. Approval time can be as fast as 30 minutes.</li>



<li><strong>Lower loan amount:</strong> Because some supporting documents are waived, the upper limit of the approved loan amount ranges from HK$10,000 to $150,000. If you want to get a higher loan amount, you may need to submit complete documents for the application.</li>



<li><strong>Higher interest rates:</strong> As the requirements for documents are more relaxed, the risk for lending institutions is higher. Therefore, interest rates may be higher than those for regular personal loans. The actual interest rate depends on factors such as the applicant&#8217;s credit score and past repayment records.</li>



<li><strong>Suitable for people with no fixed income: </strong>Generally, no-income proof loan products waive income-proof documents, making it easier for people with an unstable income, cash income, or no income proof, such as self-employed or freelancers, to apply.</li>
</ul>



<h3>FAQ About No-Doc Loans</h3>



<div class="schema-faq wp-block-yoast-faq-block"><div class="schema-faq-section" id="faq-question-1681700354766"><strong class="schema-faq-question">Can you get a no-doc loan if unemployed?</strong> <p class="schema-faq-answer">No, even though income proof is not required for these loans, borrowers still need to demonstrate a certain level of repayment ability. When filling out personal information, you will need to provide your occupation and monthly income. If you indicate that you are unemployed or have no income, you may not qualify for the loan or be approved during the final review.</p> </div> <div class="schema-faq-section" id="faq-question-1681700412648"><strong class="schema-faq-question">How can I obtain a better loan interest rate?</strong> <p class="schema-faq-answer">Assuming you have no income proof, your credit report will affect the loan interest rate. Different lenders may offer different rates, so it is important to compare the actual annual percentage rate (APR) before making a decision.</p> </div> <div class="schema-faq-section" id="faq-question-1681700427660"><strong class="schema-faq-question">What financial fees should I pay attention to?</strong> <p class="schema-faq-answer">Before applying for a personal loan, pay attention to whether the lender will charge administrative fees, prepayment fees, etc. Additionally, if you fail to repay the loan on time and are charged a penalty fee, remember the government&#8217;s call to &#8220;borrow responsibly and avoid using loan sharks&#8221;.</p> </div> </div>



<p><em>To borrow or not to borrow?&nbsp;Borrow only if you can repay!</em></p>


No, even though income proof is not required for these loans, borrowers still need to demonstrate a certain level of repayment ability. When filling out personal information, you will need to provide your occupation and monthly income. If you indicate that you are unemployed or have no income, you may not qualify for the loan or be approved during the final review.

Can you get a no-doc loan if unemployed?

Assuming you have no income proof, your credit report will affect the loan interest rate. Different lenders may offer different rates, so it is important to compare the actual annual percentage rate (APR) before making a decision.

How can I obtain a better loan interest rate?

Before applying for a personal loan, pay attention to whether the lender will charge administrative fees, prepayment fees, etc. Additionally, if you fail to repay the loan on time and are charged a penalty fee, remember the government's call to "borrow responsibly and avoid using loan sharks".

What financial fees should I pay attention to?

Looking for a loan without income proof? It can be tough for self-employed, unemployed, or those with unstable income. Learn more about no doc loans.





No-Doc Loan: Borrow Cash Without Income Proof/Verification


<p>While it is always better to prepare early when it comes to borrowing money, life often presents unexpected situations, and we may not be able to predict when we will need a loan. When traditional banks or lending companies are closed during late-night hours, Sundays, or on public holidays, 24-hour personal loans can provide immediate cash access.</p>



<h2>What are 24-hour personal loans?&nbsp;</h2>



<p>Traditional banks and lending companies typically operate from Monday to Saturday during regular office hours. Their staff processes loan applications and approvals during this time.</p>



<p>This limited availability may cause inconvenience for some borrowers who may be unable to apply during regular working hours or who urgently need a loan outside these hours. Some financial institutions offer 24-hour loans to address this issue, accepting applications and processing approvals anytime, even on Sundays and public holidays.</p>



<h2>Find the Best Personal Loan Online 24/7</h2>



<loan-table> language=&#8221;en&#8221; </loan-table>



<h2>Comparing Virtual banks and lending companies&#8217; 24-hour loans&nbsp;</h2>



<p>Traditionally, most 24-hour <a href="https://www.planto.hk/en/blog/personal-loan-APR-comparison/">personal loans</a> are provided by lending companies. However, virtual banks have also started offering similar online lending services in recent years.</p>



<ul>
<li><strong>24-hour loans by lending companies:</strong>&nbsp;Some lending companies offer 24-hour personal loans that can be applied for over the phone or online. Customers do not need to visit in person and can submit required documents online. Approval may be faster if applying for a loan without proof of income, but the loan amount will likely be lower.&nbsp;</li>



<li><strong>24-hour loans by virtual banks:&nbsp;</strong>In Hong Kong, virtual banks such as Airstar Bank and ZA Bank offer 24-hour personal loans. Customers can submit applications and upload necessary documents via mobile apps. Approvals are processed immediately, and customers can receive loans as fast as one hour.</li>
</ul>



<h2>Features of 24-hour personal loans&nbsp;</h2>



<p>24-hour personal loans are flexible and designed to provide convenience for those needing funds. Their main features include the following:</p>



<ul>
<li><strong>All-weather application and approval:&nbsp;</strong>Customers can apply for 24-hour loans at any time, including Sundays, public holidays, or outside regular office hours, via mobile apps, websites, or phone calls. However, some institutions may only accept applications 24/7 but process approvals during regular office hours, so inquire before applying.&nbsp;</li>



<li><strong>Simple application process:&nbsp;</strong>In many cases, 24-hour personal loans are designed for quick approval, and the document requirements are more relaxed. Some even offer loans without requiring proof of income or address.&nbsp;</li>



<li><strong>Lower loan amounts:&nbsp;</strong>Loans without proof of income or address typically have higher risks for lenders, so the approved loan amounts are usually lower.&nbsp;</li>



<li><strong>Higher interest rates from lending companies:&nbsp;</strong>Many 24-hour loans are provided by lending companies, which generally charge higher interest rates than virtual banks.</li>
</ul>



<h2>24-hour cash loan application process&nbsp;</h2>



<p>The application process for 24-hour personal loans is similar to standard loans. Required documents usually include an ID card, proof of address, and proof of income. The specific steps and required documents vary depending on the lending institution and the borrower&#8217;s financial situation, but the main application process includes the following:</p>



<ul>
<li><strong>Applying:&nbsp;</strong>Applicants can submit their 24-hour personal loan applications online, via phone, or mobile. Lending companies typically require applicants to provide their name, ID number, phone number, address, desired loan amount, occupation, and income status.&nbsp;</li>



<li><strong>Preliminary approval:&nbsp;</strong>Applicants usually receive an almost immediate preliminary decision on their 24-hour personal loan. They can confirm the loan if satisfied with the approved loan amount and annual interest rate. The lender may request additional documents to finalize the approval process.&nbsp;</li>



<li><strong>Loan disbursement:&nbsp;</strong>After final approval, applicants can confirm and withdraw the loan from the designated account.</li>
</ul>



<h3>FAQs for applying for a 24-hour personal loan</h3>



<p>Regardless of how urgently you need to borrow money when using a 24-hour cash turnover loan product, you must be cautious. Here are some common questions:</p>



<div class="schema-faq wp-block-yoast-faq-block"><div class="schema-faq-section" id="faq-question-1681274752397"><strong class="schema-faq-question">How can I obtain a better loan interest rate?</strong> <p class="schema-faq-answer">Virtual bank loans generally have lower annual interest rates than financial companies. Of course, many factors affect the loan interest rate. Borrowers should compare the actual annual interest rate (APR) before deciding.</p> </div> <div class="schema-faq-section" id="faq-question-1681274762025"><strong class="schema-faq-question">Can I really get a loan within 24 hours? </strong> <p class="schema-faq-answer">A 24-hour personal loan means that the application is accepted within 24 hours, and it does not promise approval and disbursement of the loan within 24 hours. Applicants may not be guaranteed to obtain the cash within 24 hours. Generally speaking, if the loan institution indicates that it is approved through big data or intelligent systems, the approval time will be shorter due to reduced manual operations. If time is tight, consider borrowing money from virtual banks such as <a href="https://www.planto.hk/zh/blog/ZA-bank-loan/">ZA Bank</a> and <a href="https://www.planto.hk/en/airstar/">Airstar</a>, or lenders such as <a href="https://www.planto.hk/zh/blog/grantit-review/">Grantit</a> and <a href="https://www.planto.hk/zh/blog/x-wallet-loan/">X Wallet,</a> which usually provide quick results.</p> </div> <div class="schema-faq-section" id="faq-question-1681274851352"><strong class="schema-faq-question">Can I borrow money on Saturdays, Sundays, public holidays, or late at night? </strong> <p class="schema-faq-answer">24-hour personal loans provide uninterrupted services so that money can be borrowed on Saturdays, Sundays, public holidays, or late at night. However, as mentioned above, some institutions only accept applications within 24 hours, but approval and disbursement can only be completed during office hours. Therefore, applicants should carefully check the details before applying.</p> </div> <div class="schema-faq-section" id="faq-question-1681274860910"><strong class="schema-faq-question">What financial fees should I pay attention to? </strong> <p class="schema-faq-answer">Before applying for a personal loan, you must consider whether the loan institution will charge administrative fees, prepayment fees, etc. In addition, if the borrower fails to repay the loan on time, a penalty may be charged. Remembering the government&#8217;s call is also important: &#8220;You have to repay your loans. Don&#8217;t pay any intermediaries.&#8221;</p> </div> </div>



<p><em>To borrow or not to borrow? Borrow only if you can repay!</em></p>


Virtual bank loans generally have lower annual interest rates than financial companies. Of course, many factors affect the loan interest rate. Borrowers should compare the actual annual interest rate (APR) before deciding.

A 24-hour personal loan means that the application is accepted within 24 hours, and it does not promise approval and disbursement of the loan within 24 hours. Applicants may not be guaranteed to obtain the cash within 24 hours. Generally speaking, if the loan institution indicates that it is approved through big data or intelligent systems, the approval time will be shorter due to reduced manual operations. If time is tight, consider borrowing money from virtual banks such as <a href="https://www.planto.hk/zh/blog/ZA-bank-loan/">ZA Bank</a> and <a href="https://www.planto.hk/en/airstar/">Airstar</a>, or lenders such as <a href="https://www.planto.hk/zh/blog/grantit-review/">Grantit</a> and <a href="https://www.planto.hk/zh/blog/x-wallet-loan/">X Wallet,</a> which usually provide quick results.

Can I really get a loan within 24 hours? 

24-hour personal loans provide uninterrupted services so that money can be borrowed on Saturdays, Sundays, public holidays, or late at night. However, as mentioned above, some institutions only accept applications within 24 hours, but approval and disbursement can only be completed during office hours. Therefore, applicants should carefully check the details before applying.

Can I borrow money on Saturdays, Sundays, public holidays, or late at night? 

Before applying for a personal loan, you must consider whether the loan institution will charge administrative fees, prepayment fees, etc. In addition, if the borrower fails to repay the loan on time, a penalty may be charged. Remembering the government's call is also important: "You have to repay your loans. Don't pay any intermediaries."

What financial fees should I pay attention to? 

Get the answers to common questions about 24-hour personal loans, including how to find better interest rates, loan approval times, and additional financial fees.

24-Hour Personal Loans: What to Know Before Borrowing Emergency Cash


<p>Buying a cozy nest for you and your family is the first step towards a happy and fulfilling life. After successfully purchasing a property, your budget may be tight, making it necessary to save money during the home renovation process.</p>



<p>In Hong Kong, the cost of renovating and furnishing a 300-square-foot unit typically ranges from a hundred thousand to several hundred thousand Hong Kong dollars. However, with numerous home renovation and interior design options, prices vary significantly depending on the chosen design style, materials, and renovation company. First-time renovators may need help determining where to begin.&nbsp;</p>



<p>If you&#8217;re looking for renovation quotes, don&#8217;t miss the following 12 money-saving tips to help you plan your renovation and avoid unnecessary expenses.</p>



<h2>1) Get More Quotations and Compare the Prices</h2>



<figure class="wp-block-image is-resized"><img decoding="async" src="https://images.unsplash.com/photo-1489171078254-c3365d6e359f?ixlib=rb-0.3.5&amp;ixid=eyJhcHBfaWQiOjEyMDd9&amp;s=fe3391048aa6a5e7e0675015330416e8&amp;w=1000&amp;q=80" alt="photo of flat screen television" width="500" height="282"/><figcaption class="wp-element-caption"><em>▲Getting quotes for the same design from different companies can result in significant price differences.</em></figcaption></figure>



<p>Just as you viewed multiple properties before deciding, do the same for home renovation. Even with the same unit and requirements, quotes from different renovation companies may vary significantly. So, take your time and contact several contractors or designers for on-site quotes. Ask friends and family for reliable home renovation or design company recommendations to avoid going in blindly.</p>



<p>Some local home renovation platforms in Hong Kong where you can get a quote include:&nbsp;</p>



<ul>
<li>SPACEPLAN</li>



<li>CallSiFu</li>



<li>CoDECO</li>



<li>CFUGO</li>



<li>HK Decoman</li>



<li>Decoration2</li>
</ul>



<h2>2) Detailed Quotes Offer Better Reliability</h2>



<p>Some traditional home renovation contractors may quote a price like &#8220;HK$300,000&#8221; without much detail. To protect yourself, request a detailed quote specifying every aspect, such as:</p>



<ul>
<li>Kitchen and built-in cabinet dimensions and materials</li>



<li>Whether each renovation item includes labor and materials</li>



<li>Things you need to purchase separately</li>



<li>Built-in cabinet styles, colors, and board thickness</li>



<li>Paint brands and colors</li>



<li>Number of electrical sockets</li>



<li>Renovation insurance arrangements</li>



<li>Project completion date</li>
</ul>



<p>You should insist on adding details to contracts before signing and paying the deposit to avoid disputes after the work begins.</p>



<h2>3) With or Without an Interior Designer?</h2>



<p>Hiring a designer to oversee your home renovation offers the benefit of having someone handle the design, material selection, and project supervision. However, this option can be expensive. Generally, designers will measure your space, create initial sketches and quotes, and provide 3D color renderings after multiple revisions. This process can take up to a month from property handover to the actual renovation start.</p>



<p>If you have ample time, energy, home renovation and furnishing knowledge, and a clear vision for your dream home, consider hiring a home renovator or contractor without design service (Hong Kongers usually call them a CFU).&nbsp;</p>



<p>While these contractors may not provide 3D designs or much design advice, they typically have extensive knowledge of materials and electrical work, and most importantly, you can save on design fees.</p>



<h2>4) Are Built-in Furniture Pieces Necessary?</h2>



<p>Many small-space design case studies feature extensive built-in furniture for increased storage. However, custom-built furniture is often more expensive and makes the space cramped.</p>



<p>Consider whether you really need every inch of your home for storage. Installing built-in cabinets in a narrow corridor may obstruct passage; storage areas underneath a bed can be challenging to access, and window storage units can block the view. Instead, focus on decluttering and releasing space in your home, which can make you more delightful than filling the space with storage units.</p>



<h2>5) Smart Use of Credit Card Rewards and Installment Plans</h2>



<p>Renovating a home can be expensive, so utilizing interest-free and installment plans offered by renovation and design companies can help reduce one-time expenses. Credit cards are also great money-saving tools, helping you earn cashback when purchasing furniture and enjoy interest-free or low-interest installment repayments. Cards like livi PayLater, HSBC Red, and PrimeCredit EarnMORE are simple and offer impressive cashback amounts.</p>



<h2>6) Warehouse Sales and Expos</h2>



<p>In Hong Kong, there are ways to save money on furniture and appliances. The most convenient method is to buy store display items, although not everyone may be comfortable with that. You can search Google for furniture stores or appliance brands holding warehouse sales or promotions. You can find many discounted items if there is a furniture expo.</p>



<h2>7) Online Shopping for Overseas Products</h2>



<p>Purchasing brand-name appliances, kitchenware, faucets, mattresses, and other items in Hong Kong often costs significantly more than buying them in their countries of origin. As a result, savvy homeowners may choose to shop online for overseas products. Many foreign companies provide direct shipping or forwarding services to Hong Kong.&nbsp;</p>



<p>For example, ordering a popular Dyson vacuum cleaner from a UK or German website may be half the price, even with shipping fees, compared to buying it in Hong Kong. However, be aware that some online parallel imported products may not have warranties in Hong Kong, so weigh the risks. When using proxy-buying and forwarding services, pay attention to insurance and protection clauses to avoid losses due to product damage during shipping.</p>



<p>Furthermore, the electrical specifications of products from Japan, the US, and Taiwan may differ from those in Hong Kong, so online appliances may not be suitable for use in Hong Kong. Global standards generally apply for renovation materials like floor tiles, ceramic tiles, and sanitary ware, so feel confident shopping for foreign products online.</p>



<p>If you&#8217;re still hesitant about shopping on foreign websites like Amazon, consider the following local or overseas platforms that cater specifically to Hong Kong customers, offering convenient communication and more excellent protection for consumers:</p>



<p>Amazon is a global e-commerce platform that offers a vast selection of furniture from overseas, providing Hong Kong customers with a convenient and cost-effective way to purchase unique, high-quality items not readily available locally.</p>



<ul>
<li><strong>Amazon:</strong>&nbsp;Amazon is a global e-commerce platform that offers a vast selection of furniture from overseas, providing Hong Kong customers with a convenient and cost-effective way to purchase unique, high-quality items not readily available locally.</li>



<li><strong>Live A Life Home:&nbsp;</strong>Japanese solid wood furniture specialist offering sofas, tables, chairs, TV cabinets, and storage cabinets.</li>



<li><strong>ImportAppliances:</strong>&nbsp;Importing European kitchen appliances from brands like Bosch, Siemens, and Smeg</li>
</ul>



<h2>8) Buying from Mainland China</h2>



<p>Although not everyone may favor made-in-China products, the fact remains that many of the renovation materials and furniture available in Hong Kong&#8217;s market are manufactured in China. Even custom-made furniture is primarily made in China and then shipped to Hong Kong for assembly. Since there&#8217;s no way to avoid it, why not also explore what China offers?&nbsp;</p>



<p>Ordering mainland Chinese renovation materials and furniture through Taobao is the easiest and quickest way. If you want to see the products in person, many people visit the Tian Bei Si Road in Shenzhen.</p>



<p>Purchasing ready-made products such as floor tiles, sanitary ware, and lighting fixtures in mainland China is generally similar in quality to those in Hong Kong, and you can easily use them in your home with no issues.&nbsp;</p>



<p>However, custom-made items like kitchen cabinets or wardrobes can sometimes lead to discrepancies in the delivered goods. Additionally, installation technicians arranged by mainland furniture stores may not be authorized to work legally in Hong Kong, potentially trapping consumers to hiring illegal workers.</p>



<h2>9) Seize the off-season for bargaining</h2>



<figure class="wp-block-image"><img decoding="async" src="https://media3.giphy.com/media/2tNx1Lh7S3bIsiHrUn/giphy.gif?cid=3640f6095bd6a676475975376724fc33" alt="john crist comedy GIF by Interstellardesignz"/><figcaption class="wp-element-caption"><em>▲The off-peak and peak seasons affect the interior design and home renovation fees.</em></figcaption></figure>



<p>When is the best time of year to do home renovation? You must consider doing it in the off-season if you wish to reduce the cost. Influenced by traditional customs, many people prefer to complete renovations before the Lunar New Year to move into their new homes during the holiday. As a result, the year-end is the peak season for renovations, with many companies busy and less room for negotiation. </p>



<p>On the other hand, after the Lunar New Year, as the off-season begins, renovation companies may lower their prices or even offer discounts, creating a good opportunity for bargaining.</p>



<h2>10) Making the Most of Existing Decorations</h2>



<p>When buying a property, you also acquire the previous owner&#8217;s decorations and part of the furniture and appliances. If the existing stuff aligns with your preferences, it can save you money significantly.&nbsp;</p>



<p>Having sufficient funds for a complete renovation is ideal, but if you want to save money, you may need to settle for less and preserve some of the previous owner&#8217;s decorations. You might not need to redo the plumbing or wiring if the property is young enough. Minor features like wall socket covers, exhaust fans, door locks, and kitchen or bathroom ceiling lights may not make much difference when replaced and might not even be noticeable, so consider not changing them.</p>



<h2>11) Considering Long-term Maintenance</h2>



<figure class="wp-block-image"><img decoding="async" src="https://media0.giphy.com/media/lVBtp4SRW6rvDHf1b6/giphy.gif?cid=3640f6095bd6a9677452557363801eac" alt="water fix it GIF"/><figcaption class="wp-element-caption"><em>▲During renovations, consider long-term home maintenance and don&#8217;t solely focus on aesthetic design.</em></figcaption></figure>



<p>After completing home renovations, you and your family may live in the home for ten years or longer, so it&#8217;s essential to consider future maintenance costs. If your residence is located in a humid area of Hong Kong, like the eastern or southern coastal regions, opt for moisture-resistant materials for paint and wardrobes.&nbsp;</p>



<p>When choosing bright lighting and appliances, consider whether it will be difficult to find replacement parts and repair services in the future. Select standard-sized brands for built-in appliances or stovetops to avoid modifying cabinets when replacing them.</p>



<p>During renovations, prioritize the quality of materials and products to reduce potential future maintenance costs. Investing in more expensive but durable items can lead to long-term savings.</p>



<h2>12) Applying for Home Renovation Loans</h2>



<p>Some banks offer &#8220;home renovation loans,&#8221; a type of&nbsp;<a target="_blank" href="https://www.planto.hk/en/blog/personal-loan-APR-comparison/" rel="noreferrer noopener">personal loan</a>&nbsp;characterized by higher loan amounts, up to HK$1.2 million, and repayment periods similar to traditional personal loans, with a maximum of 60 months. However, the annual interest rate for renovation loans starts at over 4%, slightly higher than regular low-interest personal loans.</p>



<p>If you prefer a lower interest rate, consider standard personal loans from banks, with annual interest rates as low as around 2%, mainly through online loan products from virtual banks, which may offer more promotions and benefits.</p>



<p>If your renovation coincides with the tax season (from October to April), you can apply for bank tax season loans, with many options available for annual interest rates below 2%. However, the loan amount limits for standard personal or tax loans are typically around 12 to 24 months, which may not be sufficient to cover more expensive home renovation or interior design costs.</p>



<loan-table> language=&#8221;en&#8221; </loan-table>


Discover cost-effective home renovation tips, including leveraging credit card rewards, warehouse sales, overseas online shopping, and financing options and more. 






Home Renovation Cost 2023: 12 Money-Saving Tips for Hong Kongers


<p>Before borrowing any <a href="https://www.planto.hk/en/blog/personal-loan-APR-comparison/">personal loan</a>, you must clearly understand the borrowing costs. Planto has created a simple personal loan interest rate and repayment calculator that can calculate your monthly repayment amount and total interest expense by simply entering the loan amount, repayment period, and actual annual percentage rate (APR).</p>



<loan-repayment-calculator lang="en"></loan-repayment-calculator>



<h2>Explanation of Personal Loan Calculator Terminology</h2>



<h3>Loan Amount</h3>



<p>The loan amount refers to the total amount of money borrowed by the borrower from the lending institution. The lending institution will determine the amount of loan to be approved based on various factors such as the borrower&#8217;s income, credit history, occupation, and more. Deciding the loan amount based on personal needs and repayment capability is essential when borrowing money.</p>



<h3>Actual Annual Percentage Rate (APR)</h3>



<p>The actual annual percentage rate is a loan interest rate calculation method designated by the Hong Kong Association of Banks. It reflects the final rate obtained after calculating interest, handling fees, and all other costs. When all other conditions are the same, the lower the actual annual percentage rate, the lower the borrower&#8217;s loan interest expense.</p>



<p>Most banks and financial companies do not charge handling fees and finance charges to personal installment loan applicants. Therefore, interest expense is the main cost of borrowing a personal loan, and it is crucial to consider the actual annual percentage rate when choosing a loan.</p>



<h3>Tenor</h3>



<p>Most personal installment loans in Hong Kong require borrowers to repay monthly, which can last up to 60 months or more. A more extended tenor means lower monthly payments but higher interest costs in the long run. Conversely, the shorter tenor, the higher the monthly payments, but the lower the total interest costs.</p>



<h3>Monthly Repayment</h3>



<p>The monthly repayment refers to the principal and interest that the borrower pays to the lending institution each month. The lending institution uses the &#8220;78 Law&#8221; to determine the ratio of principal and interest in the repayment amount. Although the monthly repayment amount of an installment loan is fixed, the ratio of principal and interest will gradually change, with interest accounting for a higher proportion in the early stages of repayment and principal accounting for less. As the repayment progresses, the interest ratio in the repayment amount will decrease.</p>



<h3>Total Interest Expenses</h3>



<p>Total interest expenses refer to the actual monthly interest paid over the entire repayment period. Assuming that the loan amount and repayment term remain the same, the higher APR, the more total interest expenses will be paid.</p>



<loan-table> language=&#8221;en&#8221; </loan-table>



<h2>FAQs about Personal Loan Calculators</h2>



<div class="schema-faq wp-block-yoast-faq-block"><div class="schema-faq-section" id="faq-question-1678935651203"><strong class="schema-faq-question">Are there any other costs besides interest when borrowing a personal loan?</strong> <p class="schema-faq-answer">Interest expense is the main cost of a personal loan. In addition, lending institutions may charge administrative and financial fees such as handling fees, late payment penalties, and prepayment fees based on the nature of the product and the individual borrower&#8217;s loan conditions.</p> </div> <div class="schema-faq-section" id="faq-question-1678935666490"><strong class="schema-faq-question">Why do the results of personal loan calculators differ from the repayment plans offered by lending institutions?</strong> <p class="schema-faq-answer">Planto&#8217;s personal loan calculator calculates the interest rate based on the APR, while some lending institutions may include cash rebates or other discounts and loan costs in their APR, resulting in different results. Borrowers should rely on the final terms and information provided by the lending institution.</p> </div> </div>


Interest expense is the main cost of a personal loan. In addition, lending institutions may charge administrative and financial fees such as handling fees, late payment penalties, and prepayment fees based on the nature of the product and the individual borrower's loan conditions.

Are there any other costs besides interest when borrowing a personal loan?

Planto's personal loan calculator calculates the interest rate based on the APR, while some lending institutions may include cash rebates or other discounts and loan costs in their APR, resulting in different results. Borrowers should rely on the final terms and information provided by the lending institution.

Why do the results of personal loan calculators differ from the repayment plans offered by lending institutions?

Planto has created a simple personal loan interest rate and repayment calculator that can calculate your monthly repayment amount and total interest expense by simply entering the loan amount, repayment period, and actual annual percentage rate (APR).

Personal Loan Calculator: Get Monthly Repayment Estimates Now


<p>When applying for credit products like credit cards, loans, or mortgages in Hong Kong, lenders typically request to review your credit report. Your TransUnion (TU) credit report is crucial in determining the loan application result and interest rates, which can significantly impact your personal finance. How much do you know about your TU credit report and score? Read on to discover some common questions about TU credit report and how it works.</p>



<h2>What is a TransUnion Credit Report?&nbsp;</h2>



<p>In Hong Kong, as long as you have applied for a credit card or personal loan, you will have a credit report. TransUnion is the only institution that provides personal credit reports in Hong Kong. Your credit card application, loan application, repayment, and overdue records are all recorded in TransUnion&#8217;s database, which makes up your credit report.</p>



<p>Your TU credit report contains the following information:</p>



<ul>
<li><strong>Personal information:</strong>&nbsp;Name, ID number, address, and phone number</li>



<li><strong>Credit account information:&nbsp;</strong>Credit usage and overdue repayment records</li>



<li><strong>Public records:</strong>&nbsp;Debt collection, bankruptcy, and liquidation lawsuits</li>



<li><strong>Inquiry records:&nbsp;</strong>The inquiry records of TransUnion members (banks and financial institutions) in the past two years.</li>



<li><strong>Credit score:&nbsp;</strong>A summary of your credit rating, with a total of 10 levels, with A being the highest and J being the lowest.</li>
</ul>



<p>Your credit score is a vital aspect of your credit report. When borrowing money, those with an A-grade credit score have a greater chance of obtaining the bank&#8217;s best interest rate, with an actual annual percentage rate (APR) of less than 5%. In contrast, for J-grade credit scores, the interest rate can be as high as 45% or more, resulting in significant differences in interest expenses.</p>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Grades</strong></td><td><strong>Credit Level</strong></td><td><strong>Credit Score</strong></td></tr><tr><td>A</td><td>Excellent</td><td>3526 – 4000</td></tr><tr><td>B</td><td>Good</td><td>3417 – 3525</td></tr><tr><td>C</td><td>Good</td><td>3240 – 3416</td></tr><tr><td>D</td><td>Averaged</td><td>3214 – 3239</td></tr><tr><td>E</td><td>Averaged</td><td>3143 – 3213</td></tr><tr><td>F</td><td>Averaged</td><td>3088 – 3142</td></tr><tr><td>G</td><td>Poor</td><td>2990 – 3087</td></tr><tr><td>H</td><td>Poor</td><td>2868 – 2989</td></tr><tr><td>I</td><td>Poor/Near Bankrupt</td><td>1820 – 2867</td></tr><tr><td>J</td><td>Poor/Near Bankrupt</td><td>1000 – 1819</td></tr></tbody></table></figure>



<h2>Factors that Affect Credit Scores&nbsp;</h2>



<p>Various factors affect your credit score, including:</p>



<ul>
<li>Repayment history</li>



<li>Credit inquiry records</li>



<li>The ratio of credit usage</li>



<li>Length of credit history</li>



<li>Type of credit account</li>
</ul>



<p>Among these factors, repayment history has the most significant impact on your credit score. If you have ever defaulted on a credit card or missed a repayment, it will be recorded in your credit report. Even if you were just one day late in repayment, this record would be kept for 5 years. Therefore, paying attention to the repayment date and repay on time is essential.</p>



<h2>When Will Credit Reports Be Checked?</h2>



<p>When applying for a mortgage or personal loan, banks or financial institutions will request borrowers to sign a data-sharing consent form and obtain the applicant&#8217;s credit report from the credit rating agency to determine whether the applicant is a reliable borrower. This process can affect the final result and amount of the loan granted.&nbsp;&nbsp;</p>



<p>If there are multiple hard inquiries in a short period, it will cause the credit score to decrease. Therefore, it is best to avoid applying for loans from too many institutions simultaneously.</p>



<p>In some cases, if the bank or financial institution believes that they have sufficient information on the credit usage status of their existing customers, they may approve credit products without checking the credit report.</p>



<h2>How to Improve Your Credit Score?&nbsp;</h2>



<p>Maintaining a good credit score is essential to accessing credit for big-ticket items such as homes, cars, and other <a href="https://www.planto.hk/en/blog/personal-loan-APR-comparison/">personal loans</a>. Many may wonder if using only cash and not applying for credit cards or loans will give you a high score. In fact, this will result in a blank credit history and will not help your score. To improve your credit score, you should:</p>



<ul>
<li>Make timely payments every month and pay off all bills</li>



<li>Regularly check your credit report and promptly correct any problematic information</li>



<li>Avoid applying for too many loans to maintain a good credit history</li>
</ul>



<h2>How to Check Your TU Credit Score?&nbsp;</h2>



<p>TransUnion allows you to access your credit report directly in two ways:</p>



<h3>Option 1: Directly Obtain Your TU Credit Report</h3>



<p>You can directly obtain your TU credit report by making an appointment online and bringing your identification documents and a valid address proof issued within the last three months to the TransUnion office at Suite 811, 8th Floor, Tower 5, The Gateway, 15 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong. The cost is HK$280; payment can be made by VISA/Mastercard or cash.</p>



<h3>Option 2: Check Your TU Credit Report for Free</h3>



<p>Suppose a bank or financial institution has rejected your credit application (including credit cards, loans, and mortgages), and they have previously obtained your credit report from TransUnion. In that case, you will receive a rejection letter. You can then follow the instructions in the letter to get a free credit report from TransUnion.</p>



<h2>Find the Best Personal Loan Offers in Hong Kong</h2>



<loan-table> language=&#8221;en&#8221; </loan-table>



<h2>FAQs about TU Credit Report</h2>



<div class="schema-faq wp-block-yoast-faq-block"><div class="schema-faq-section" id="faq-question-1678262026829"><strong class="schema-faq-question">How much does it cost to obtain a TU Credit Report?</strong> <p class="schema-faq-answer">The cost to obtain a TU Credit Report is HK$280, and you can do this in person at the TransUnion office or online.</p> </div> <div class="schema-faq-section" id="faq-question-1678262080591"><strong class="schema-faq-question">How to check TU Credit Report for free?</strong> <p class="schema-faq-answer">If you have been rejected for a credit card, loan, or mortgage by a bank or financial institution, and they have previously obtained your credit report from TransUnion, then you can apply for a free credit report from TransUnion with the rejection letter.</p> </div> </div>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h3>Recommended Readings</h3>



<ul>
<li><a href="https://www.planto.hk/en/blog/personal-loan-APR-comparison/">Personal Loan Hong Kong: Borrow with the Best Interest Rate</a></li>
</ul>



<p>To&nbsp;borrow&nbsp;or&nbsp;not&nbsp;to&nbsp;borrow?&nbsp;Borrow only if you can repay!</p>


The cost to obtain a TU Credit Report is HK$280, and you can do this in person at the TransUnion office or online.

How much does it cost to obtain a TU Credit Report?

If you have been rejected for a credit card, loan, or mortgage by a bank or financial institution, and they have previously obtained your credit report from TransUnion, then you can apply for a free credit report from TransUnion with the rejection letter.

How to check TU Credit Report for free?

How much do you know about your TU credit report and score? Read on to discover some common questions about TU credit reports and how to improve it.

TransUnion Credit Score: How to Improve + Everything Hong Kongers Should Know

The actual interest rate offered to borrowers depends on multiple factors such as borrower’s credit profile, loan amount, and repayment period – as such not all borrowers will be able to get the lowest Annual Percentage Rate (APR) possible as advertised by financial institutions.

Why is the actual interest rate offered by financial institutions different from the ones advertised?

Some of the most common types include installment, revolving and consolidation loans. An <strong>installment loan</strong> is the most common personal loan in Hong Kong, it is characterized by fixed monthly repayment schedule. A <strong>Revolving loan</strong> on the other hand offers more flexibility as the borrowers can decide when to drawdown then payback at their own pace. Lastly, a <strong>consolidation loan</strong> is a type of borrowing to payback one or more other loans – ideally higher interest one(s). <a href="https://www.planto.hk/en/blog/consolidation-loan-explained/">Read more about consolidation loan here</a>.

What are the key types of personal loan?

Traditionally, financial institutions typically take about one week to approve a personal loan application. However, with the aid of online application, application and approval can now be as fast as one day.

How long does it usually take to apply for and get a personal loan?

While APR plays an important role, borrowers should also consider other important factors such as repayment ability, handling fee, overdue penalty, early repayment fee and repayment methods.

What factors should be considered when applying for a personal loan?

The repayment period of any personal loan in Hong Kong can range between 3 to 72 months. The repayment period directly impacts the monthly repayment amount and overall interest expense. Longer repayment period means lower monthly repayment, but at the same time it will also increase overall interest expense due to compounding. <a href="https://www.planto.hk/en/blog/personal-loan-interest-rate-factors/">Read more about the relationship between the repayment period and total interest expense here</a>.

How to decide on repayment period for your personal loan?

Financial institutions generally require documents such as identification documents (HKID), proof of address and proof of income. Some institutions allow the borrower to skip some document provision, however maximum loan amount will be lower as well.

What documents are required during a personal loan application?

Failing to repay the loan on time typically results in additional finance charges. Another important consequence is the impact of late repayment on credit score - having a bad credit score could result in loan disapproval or getting a loan offer but at a higher interest rate.

What are the consequences of late repayment?

Financial institutions typically request handling fees or interest payback if borrowers want to repay their personal loans earlier. This means early repayment of personal loans may not always result in saving on interest expense so borrowers should discuss this option with their lenders before making any decision.

Can early repayment save money?

A secured loan uses collateral as a guarantee for repayment (mortgage is one example of a secured loan). On another hand, unsecured loan like personal loan, tax loan or even credit card do not have any guarantee for repayment, so their interest rate tends to be higher when compared to secured loan.

What is the difference between secured and unsecured loan?

A loan guarantor’s role is to cover for outstanding loan amount if the original borrower failed to repay the loan. Having a guarantor can help to improve borrower’s chance of getting approval as this helps to reduce risk for financial institutions.

What is a loan guarantor?

TransUnion (“TU”) is currently the only provider of personal credit report in Hong Kong. A credit report takes into considerations of past credit card, loan and mortgage application / payment information to compute a credit score which ranges from AA to JJ (AA being the best and JJ being the worst). Borrowers who manage number of credit card / loan applications well, while at the same time have good repayment habit tend to have better credit score and should not have any issue when applying for any type of loan.

What is a credit report?

The most important factor to consider before borrowing money is the Annual Percentage Rate (APR). APR indicates total yearly interest expense so it is important to understand APR offers in the market and consider other key components such as maximum loan amount and the repayment period.

Personal Loan Hong Kong 2023: Borrow with the Best Interest Rate


<p>When faced with a large or multiple credit card debts, it may be tempting to get by with minimum payment in each month. However, this will likely lead to an accumulation of high interest debt. In this situation, debt consolidation is a common solution to simplify loan repayment and reduce an overall interest expense for borrowers.</p>



<p><a href="https://www.planto.hk/en/airstar/">Airstar Bank</a> is offering a debt consolidation loan which is suitable for consumers who are currently paying one or more high interest loans (such as credit card balance, credit card cash advance or an overdraft facility).</p>



<loan-table language="en" loanpartner="airstar" loantype="existing_loan"></loan-table>



<h4><strong>Learn more:</strong></h4>



<ul>
<li>Key features of Airstar Bank Debt Consolidation Loan</li>



<li>Apply for a debt consolidation loan with Airstar in a few simple steps</li>



<li>Understand the benefits of a debt consolidation loan</li>
</ul>



<h2><strong>Key features of Airstar Bank Debt Consolidation Loan</strong></h2>



<card-container>
<card title="APR as low as 2.99%¹" description="Save up to 91%³ of total interest expenses and save up to 66%³ of repayment amount per installment"></card>
  <card title="High drawdown amount⁴" description="Borrow up to 21 times of monthly salary. Optional cash option of up to 12 times of monthly salary"></card>
<card title="No handling fee²" description="$0 handling fee, $0 admin or early repayment fee"></card>
</card-container>



<h2><strong>Enjoy an exclusive welcome reward by completing a simple application via Planto</strong></h2>



<p>Enjoy up to HK$27,200 in reward value by successfully apply for Debt Consolidation Loan via Planto on or before 31 July 2023 and drawdown by 31 August 2023. Rewards may include HK$400 loan rebate coupon, cash rebate and exclusive e-vouchers from Planto (choose from Parknshop/Apple/HKTV Mall e-vouchers).</p>



<figure class="wp-block-table"><table><tbody><tr><td></td><td>Drawdown amount &amp; Tenor</td><td>Rewards</td></tr><tr><td>Rewards from Airstar Bank</td><td>Drawdown amount exceeding HK$200,000 + tenors of 24/36 months</td><td>🎁 ^Cash Rebate<br>HK$200,000 &#8211; HK$499,999 = HK$2,500<br>HK$500,000 &#8211; HK$799,999 = HK$3,400<br>HK$800,000 &#8211;  HK$999,999 = HK$5,000<br>HK$1,000,000 &#8211;  HK$1,199,999= HK$6,900<br>HK$1,200,000 or above = HK$8,400</td></tr><tr><td>Rewards from Airstar Bank</td><td>Drawdown amount exceeding + tenors of 48/60/72 months</td><td>🎁 ^Cash Rebate<br>HK$200,000 &#8211;  HK$499,999 = HK$5,000<br>HK$500,000至 HK$799,999 = HK$6,800<br>HK$800,000至 HK$999,999 = HK$10,000<br>HK$1,000,000至 HK$1,199,999= HK$13,800<br>HK$1,200,000或以上 = HK$16,800</td></tr><tr><td>Exclusive Rewards from Planto</td><td>Drawdown amount exceeding HK$200,000 + tenors of 24 months or longer</td><td>🎁 ^Exclusive 3 Pick 1 Rewards：Up to HK$10,000 ParknShop/Apple/HKTV Mall e-vouchers<br><br><a href="https://forms.gle/tjJKX357xJNNu3rh7"><strong></strong></a><strong><a href="https://forms.gle/tjJKX357xJNNu3rh7">Planto Reward Redemption Form</a></strong></td></tr></tbody></table></figure>



<planto-button link="https://forms.gle/tjJKX357xJNNu3rh7">Claim your Planto Offer!</planto-button>



<h2 id="Rewards"><strong>Apply for a debt consolidation loan with Airstar in a few simple steps</strong></h2>



<div class="schema-how-to wp-block-yoast-how-to-block"><p class="schema-how-to-description"></p> <ol class="schema-how-to-steps"><li class="schema-how-to-step" id="how-to-step-1616732129929"><strong class="schema-how-to-step-name">Submit initial loan and personal information</strong> <p class="schema-how-to-step-text">(IDV &amp; Selfie are needed for new customers)</p> </li><li class="schema-how-to-step" id="how-to-step-1616732169774"><strong class="schema-how-to-step-name">Receive an initial approval in principle results</strong> <p class="schema-how-to-step-text"></p> </li><li class="schema-how-to-step" id="how-to-step-1616732177085"><strong class="schema-how-to-step-name">Three step setup of a settlement plan:</strong> <p class="schema-how-to-step-text">A- Set Loan Settlement Details<br/>B- Set Credit Card Settlement Details (OCR: Credit Card Numbers)<br/>C- Confirm required extra cash out option<img width="1920" height="1080" src="https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan.jpg" class="attachment-full size-full" alt="" decoding="async" style="max-width: 100%; height: auto;" srcset="https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan.jpg 1920w, https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan-300x169.jpg 300w, https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan-1024x576.jpg 1024w, https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan-768x432.jpg 768w, https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan-1536x864.jpg 1536w, https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan-2048x1152.jpg 2048w, https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan-1200x675.jpg 1200w, https://d3pwh2ime6p0el.cloudfront.net/wp-content/uploads/2021/03/airstar-consolidation-loan-1980x1114.jpg 1980w" sizes="(max-width: 1920px) 100vw, 1920px" /></p> </li><li class="schema-how-to-step" id="how-to-step-1616732345262"><strong class="schema-how-to-step-name">Provide supplement document</strong> <p class="schema-how-to-step-text">(Support PDF &amp; photos upload)</p> </li><li class="schema-how-to-step" id="how-to-step-1616732356619"><strong class="schema-how-to-step-name">Receive a final offer</strong> <p class="schema-how-to-step-text"></p> </li><li class="schema-how-to-step" id="how-to-step-1616732372423"><strong class="schema-how-to-step-name">Credit card balances will be paid off automatically; Loans will be settled manually by Airstar Bank (if any)</strong> <p class="schema-how-to-step-text"></p> </li></ol></div>



<h2><strong>Understand the benefits of a debt consolidation loan</strong></h2>



<p>Key feature of a debt consolidation loan is to repay and consolidate one or multiple high interest loans into a single sum which typically has a lower interest rate and a longer repayment period. Borrowers can also choose to take out extra cash out for other usage on top of repayment of existing loans.</p>



<figure class="wp-block-table"><table><tbody><tr><td></td><td><strong>Debt consolidation loan</strong></td><td><strong>General personal loan</strong></td></tr><tr><td>Interest rate (APR)</td><td>Typically between 5% to 19%. <strong>Airstar Bank is offering APR as low as 2.99%</strong></td><td>Typically between 4% to 18%</td></tr><tr><td>Loan amount</td><td>As high as 18 to 21 times of monthly salary</td><td>As high as 8 to 12 times of monthly salary</td></tr><tr><td>Repayment period</td><td>Generally 6 to 72 months</td><td>Generally 6 to 60 months</td></tr><tr><td>Loan disbursement</td><td>Direct deposit/repayment into credit card or designated loan accounts. Part of the loan amount can be cashed out</td><td>Cash withdrawal or bank transfer</td></tr></tbody></table></figure>



<p>There are many debt consolidation loan offers on the market. Borrowers should watch out for the following factors before making any decision:</p>



<ul>
<li><strong>APR</strong>: debt consolidation loan can be an effective mean to lower down borrower’s interest expense. Consumers should do research and find a plan that can save the most interest expense</li>



<li><strong>Loan eligibility</strong>: while debt consolidation loan typically has a more accommodating eligibility criteria, a bad credit score can still lead to a higher interest rate which will reduce the amount of interest expense saving from consolidating loans</li>



<li><strong>Repayment ability</strong>: while borrowers can extend their repayment timeline using a debt consolidation – the debt still need to be repaid so all consumers should review their cashflow and ensure that they can keep up with the repayment plan before taking any loan</li>



<li><strong>Practice financial management</strong>: after taking a debt consolidation loan, borrowers can then enjoy a single loan with a lower interest and a longer repayment period. However it is still important to learn from past experience and avoid taking on high interest or multiple loans in the future</li>
</ul>



<p>To borrow or not to borrow? Borrow only if you can repay!</p>


[Airstar Bank Debt Consolidation Loan] Repay your existing loan and enjoy an exclusive welcome reward!

(IDV & Selfie are needed for new customers)

Submit initial loan and personal information

Receive an initial approval in principle results

http://34.96.221.168/wp-content/uploads/2021/03/airstar-consolidation-loan.jpg

A- Set Loan Settlement Details<br/>B- Set Credit Card Settlement Details (OCR: Credit Card Numbers)<br/>C- Confirm required extra cash out option

Three step setup of a settlement plan:

Provide supplement document

Airstar Bank is offering a debt consolidation loan which is suitable for consumers who are currently paying one or more high interest loans. Learn more!


<p>According to a <a href="https://www.transunion.com/blog/financial-hardship-study/Hong-Kong">recent consumer financial hardship study</a> published by TransUnion, between 30% to 40% of Hong Kong consumers are concerned about their ability to pay back personal loan and <a href="https://www.planto.hk/en/blog/credit-card-compare-recommend">credit card</a>. The repayment of such financial products include both principal and interest (personal loan interest, credit card overdraft etc.).</p>



<p>In this article, we will examine the impact on overall interest expense from key factors such as interest rate and payment term.</p>



<h4>Highlights: </h4>



<ul><li><a href="#What-factors-determine-your-personal-loan-interest-rate">What factors determine your personal loan interest rate?</a></li><li><a href="#Longer-payment-term-generally-results-in-higher-interest-expense">Longer payment term generally results in higher interest expense</a></li><li><a href="#3-scenarios-showing-interest-expense-impact-from-interest-rate-and-payment-term">3 scenarios showing interest expense impact from interest rate and payment term</a></li><li><a href="#personal-loan-offer">Learn about the personal loan offer from a Hong Kong virtual bank</a></li></ul>



<h2 id="What-factors-determine-your-personal-loan-interest-rate">What factors determine your personal loan interest rate?</h2>



<pre class="wp-block-preformatted"><strong>Interest rate varies depending on your credit score, loan type and the lender</strong>.</pre>



<p>There are a wide range of lending products available in Hong Kong including personal loan, tax loan, overdraft, credit card advance and others. Depending on your credit profile, loan type and the lender, your interest rate can vary between 2% to 30%+</p>



<ul><li><strong>Credit score</strong>: In Hong Kong, your credit score is typically measured by TransUnion credit score which range from AA (super prime) to JJ (Subprime) in alphabetical order. In general, consumers with better credit score (closer to AA) will get lower interest rate<br></li><li><strong>Loan type</strong>: Personal loan and tax loan tend to have much lower interest rate than overdraft and credit card advance&nbsp;<br></li><li><strong>The lender</strong>: Risk assessment tends to vary from one lender to another, this means same consumer is likely to get offer with different interest rates from different lenders</li></ul>



<h2 id="Longer-payment-term-generally-results-in-higher-interest-expense"><strong>Longer payment term generally results in higher interest expense</strong></h2>



<p>Interest is generally measured and offered in Annualised Percentage Rate (APR) which indicates actual yearly interest expense without taking into consideration the effect of compounding. Personal loan tends to compound on a monthly basis which is inline with monthly payment schedule.</p>



<p>In general, loan with longer payment term will have higher interest expense due to longer exposure to compounding effect.</p>



<h2 id="3-scenarios-showing-interest-expense-impact-from-interest-rate-and-payment-term">3 scenarios showing <strong>interest expense impact from interest rate and payment term</strong></h2>



<p>To visualize the impact in numbers, we have prepared 3 calculations below:</p>



<h3><strong>Scenario 1: HK$150k personal loan with the same payment term but different interest rate</strong></h3>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Mortgage &#8211; Overseas package</strong><br>&#8211; Interest rate: 3%<br>&#8211; Term: 3 years</td><td><strong>Personal loan &#8211; Hong Kong package</strong><br>&#8211; Interest rate: 9%<br>&#8211; Term: 3 years</td></tr><tr><td>Monthly repayment: HK$4,362</td><td>Monthly repayment: HK$4,770</td></tr><tr><td><strong>Total interest expense: HK$7,039</strong></td><td><strong>Total interest expense: HK$21,719</strong></td></tr><tr><td>Total repayment: HK$157,039 <br>&#8211; Principal 96%<br>&#8211; Interest 4%</td><td>Total repayment: HK$171,719<br>&#8211; Principal 87%<br>&#8211; Interest 13%</td></tr></tbody></table></figure>



<p>As illustrated in the calculation above, higher interest rate will result in higher interest expense which generally come back in a form of higher monthly repayment. In this case, 3x higher interest rate will mean 3.1x higher in total interest expense due to compounding effect.</p>



<h3><strong>Scenario 2: HK$150k personal loan with the same interest rate but different payment term</strong></h3>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Mortgage &#8211; Overseas package</strong><br><br>&#8211; Interest rate: 3%<br>&#8211; Term: 2 year</td><td><strong>Personal loan &#8211; Hong Kong package</strong><br><br>&#8211; Interest rate: 3%<br>&#8211; Term: 4 years</td></tr><tr><td>Monthly repayment: HK$6,447</td><td>Monthly repayment: HK$3,320</td></tr><tr><td><strong>Total interest expense: HK$4,732</strong></td><td><strong>Total interest expense: HK$9,367</strong></td></tr><tr><td>Total repayment: HK$154,732<br>&#8211; Principal 97%<br>&#8211; Interest 3%</td><td>Total repayment: HK$159,367<br>&#8211; Principal 94%<br>&#8211; Interest 6%</td></tr></tbody></table></figure>



<p>Longer payment term will generally lower monthly repayment requirement, however the total interest expense will be higher as the interest gets compounded over a longer period of time. In this case, while the payment term is 2x longer, total interest expense only increase by 1.9x as the principal reduces over time due to monthly repayment.</p>



<h3><strong>Scenario 3: HK$150k personal loan with different interest rate and payment term</strong></h3>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Mortgage &#8211; Overseas package</strong><br><br>&#8211; Interest rate: 3%<br>&#8211; Term: 2 year</td><td><strong>Personal loan &#8211; Hong Kong package</strong><br><br>&#8211; Interest rate: 9%<br>&#8211; Term: 4 years</td></tr><tr><td>Monthly repayment: HK$6,447</td><td>Monthly repayment: HK$3,733</td></tr><tr><td><strong>Total interest expense: HK$4,732</strong></td><td><strong>Total interest expense: HK$29,172</strong></td></tr><tr><td>Total repayment: HK$154,732<br><br>&#8211; Principal 97%<br>&#8211; Interest 3%</td><td>Total repayment: HK$179,172<br><br>&#8211; Principal 84%<br>&#8211; Interest 16%</td></tr></tbody></table></figure>



<p>When higher interest rate is combined with longer payment term, the increase in total interest expense will naturally be more prominent. In scenario 3 above, while the principal remains the same at HK$150k, the difference in total interest expense is as high as ~HK$25k.</p>



<h3><strong>Key takeaways</strong></h3>



<p>While an ideal scenario for every consumer would be to take loan at lower interest rate and shortest payment term possible – in reality, there are many restrictions such as your credit score or monthly income/saving which may prevent you from paying back your loan quickly. It is advisable that you:</p>



<ul><li><strong>Understand your credit score</strong>: Consumers with better credit score tends to get lower interest rate. You can check your credit score by getting a TransUnion report or apply for loan with a digital lender like <a href="https://www.planto.hk/en/airstar">Airstar</a> who shows your credit score as part of the journey (note that every loan application will impact your credit score)<br></li><li><strong>Understand your monthly cashflow</strong>: Having a good understanding of your monthly cashflow and saving will allow you to clearly calculate payment term. It is advisable that personal loan should only be considered if A) you have emergency saving and B) you are still able to save money after regular expenses and repayment on a monthly basis. If you do not have a clear understanding of your monthly cashflow, mobile app like <a href="https://www.planto.hk/en/">Planto</a> can help you to automatically calculate and keep track of your income and spending on a monthly basis</li></ul>



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<p><single-action-item title="Apply for a Personal Loan and Redeem Exclusive $400 Cash Reward!" subtitle=" APR as low as 1.58%. $0 handling fee. 5 minutes to disbursement. To borrow or not to borrow? Borrow only if you can repay!
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<h4>Recommended Readings</h4>



<ul><li><a href="https://www.planto.hk/en/blog/property-ownership-internal-transfer/">HK Homeowners Gain Tax Advantages by Transferring Property Ownership. Here’s How it Works and the Risks</a></li><li><a href="https://www.planto.hk/en/airstar">Airstar Bank Personal Loan〡 Instant Approval Online〡Exclusive Cash Rebate</a></li></ul>



<p>To borrow or not to borrow? Borrow only if you can repay!</p>


What factors determine your personal loan interest rate? In this article, we will examine the impact on overall interest expense from key factors such as interest rate and payment term.

Hong Kong personal loan: how interest rate and payment term impact overall interest expense


<p>Overseas property investment is a popular topic among many Hong Kong consumers who are attracted to their (relative) affordability, rental yield, or the potential prospect of future emigration.&nbsp;</p>



<p>There are many things to consider when it comes to a large decision like property investment. For those of you who have decided on a city/country and have found your ideal overseas property, one of the last steps is to think about cost and mortgage options, in which the mortgage interest expense is a vital factor in your decision-making process. </p>



<p>In this article, we will be exploring a potential role that personal loans in Hong Kong can play in overseas property investment.</p>



<h2>Overseas <strong>mortgage interest rates can be </strong>much higher than those in Hong Kong</h2>



<p>Mortgage interest rate varies from one country to another. In general, fast growing countries (also typically countries with higher rental yield) tend to have a higher mortgage interest rate when compared to Hong Kong.</p>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Countries</strong>/<strong>Regions</strong> <strong>with</strong> <strong>High / Low interest rate</strong></td><td><strong>Rental yield</strong></td><td><strong>Mortgage interest rate</strong></td></tr><tr><td><strong>Low interest rate: <br></strong>Taiwan, Japan, Malaysia, Canada</td><td>2% to 4%</td><td>2% to 4%</td></tr><tr><td><strong>High interest rate: <br></strong>Thailand, Vietnam, Indonesia</td><td>4% to 7%</td><td>Up to 8%</td></tr></tbody></table><figcaption>Rental yield data from <a href="https://www.globalpropertyguide.com/">GlobalPropertyGuide</a></figcaption></figure>



<p>Mortgage interest rates in certain countries like Thailand, Vietnam and Indonesia can be as high as 8% – this is more than double of Hong Kong’s typical fixed-rate mortgage of 2% to 3%.</p>



<h2><strong>Potential role of Hong Kong personal loan in overseas property investment</strong></h2>



<p>Depending on your credit profile, interest on banks’ and <a href="https://www.planto.hk/en/airstar">virtual banks’ personal loans</a> in Hong Kong can be as low as 1.8%. This opens up the possibility of taking a cheaper loan to free up your savings for property investment. For example, you could increase your down payment in order to reduce overseas mortgage amount OR simply replace overseas mortgage all together if the property value is low enough / you have enough savings.</p>



<p><strong>Impact of mortgage interest rate difference on your overall expense</strong></p>



<p>While it is logical that lower interest rate will result in lower interest payment, but by how much?</p>



<p>There are multiple factors that impact total interest expense, the 2 major factors are interest rate and payment period. <a href="https://www.planto.hk/en/blog/personal-loan-interest-rate-factors/">Check out another article that talks about these 2 factors in more detail.</a></p>



<p>To illustrate the potential impact of Hong Kong personal loan in overseas property investment, 2 calculations are provided below:</p>



<h3><strong>Scenario 1: property investment in high interest rate country that requires HK$750,000 of personal loan or mortgage</strong></h3>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Mortgage &#8211; Overseas package</strong><br><br>&#8211; Interest rate: 6%<br>&#8211; Term: 20 years</td><td><strong>Personal loan &#8211; Hong Kong package</strong><br><br>&#8211; Interest rate: 2%<br>&#8211; Term: 3 years</td></tr><tr><td>Monthly repayment: HK$5,373</td><td>Monthly repayment: HK$21,482</td></tr><tr><td><strong>Total interest expense: HK$539,576</strong></td><td><strong>Total interest expense: HK$23,350</strong></td></tr><tr><td>Total repayment: HK$1,289,576<br>&#8211; Principal 58%<br>&#8211; Interest 42%</td><td>Total repayment: HK$773,350<br>Principal 97%<br>Interest 3%</td></tr></tbody></table></figure>



<p>In this scenario where the overseas mortgage package has a high interest rate, potential saving from personal loan in Hong Kong can be staggering as the difference could be as high as HK$500,000. As an example, an investment of HK$1m million in Vietnam could end up being HK$1.5 million when factoring in interest expense from mortgage (of course this would likely come with higher value appreciation and rental yield of a fast growing economy).&nbsp;</p>



<h3><strong>Scenario 2: property investment in low interest rate country that requires HK$750,000 of personal loan or mortgage</strong></h3>



<figure class="wp-block-table"><table><tbody><tr><td><strong>Mortgage – Overseas package</strong><br>&#8211; Interest rate: 2%<br>&#8211; Term: 20 years</td><td><strong>Personal loan – Hong Kong package</strong><br>&#8211; Interest rate: 2%<br>&#8211; Term: 3 years</td></tr><tr><td>Monthly repayment: HK$3,794</td><td>Monthly repayment: HK$21,482</td></tr><tr><td><strong>Total interest expense: HK$160,590</strong></td><td><strong>Total interest expense: HK$23,350</strong></td></tr><tr><td>Total repayment: HK$910,590<br>&#8211; Principal 82%<br>&#8211; Interest 18%</td><td>Total repayment: HK$773,350<br>&#8211; Principal 97%<br>&#8211; Interest 3%</td></tr></tbody></table></figure>



<p>On another hand, if the overseas mortgage package has a low interest rate, potential saving from personal loan in Hong Kong will not be significant.</p>



<p>One very important point to note is about monthly repayment. Long term borrowing like a mortgage will have a much lower monthly repayment when compared to short term personal loan. In the scenario above, a personal loan option may not be worth considering due to the limited saving potential that comes with a high monthly repayment requirement.</p>



<p><strong>Other key personal finance considerations</strong></p>



<ul><li><strong>Monthly repayment:</strong> taking a large personal loan means high monthly repayment which will place a heavy burden on your monthly cashflow. Personal loan should only be considered if A) you have emergency saving and B) you are still able to save money after regular expenses and repayment on a monthly basis&nbsp;<br></li><li><strong>FX rate: </strong>taking a loan in Hong Kong dollar while the property value and rental return are denominated in foreign currency means any currency movement against Hong Kong dollar will lower your investment return<br></li><li><strong>Tax: </strong>Every country has a different taxation system and it may increase the cost of your investment or reduce eventual investment return<br></li><li><strong>Local mortgage offer: </strong>local banks may have mortgage offers that help to reduce overall interest costs. This could come in many forms such as deposit of excess saving or step-up repayment plan</li></ul>



<p>Property investment, no matter in what country is a big decision. It is advisable to do research well ahead of time. If you are looking for more information, feel free to check out the <a href="https://www.ifec.org.hk/">Investor and Financial Education Council</a> or the Chin family for more resources.</p>



<hr class="wp-block-separator"/>



<p><single-action-item title="Apply for a Personal Loan and Redeem Exclusive $400 Cash Reward!" subtitle=" APR as low as 1.58%. $0 handling fee. 5 minutes to disbursement. To borrow or not to borrow? Borrow only if you can repay!
" link="https://www.planto.hk/en/airstar" button_text="Learn More" lang="zh" type="content"></single-action-item></p>



<h4>Recommended Readings</h4>



<ul><li><a href="https://www.planto.hk/en/blog/property-ownership-internal-transfer/">HK Homeowners Gain Tax Advantages by Transferring Property Ownership. Here’s How it Works and the Risks</a></li><li><a href="https://www.planto.hk/en/airstar">Airstar Bank Personal Loan〡 Instant Approval Online〡Exclusive Cash Rebate</a></li><li><a href="https://www.planto.hk/en/blog/invest-in-gold/">Investing in gold, gold ETF and paper gold: Pro, con and low barrier to entry alternatives</a></li></ul>



<p style="font-size:16px"><strong>Important information:</strong></p>



<p style="font-size:16px">Investment involves risks. This information is intended to be educational and is not tailored to the investment needs of any specific investor. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. Past performance is no guarantee of future results. The value of investments and the income from them can go down as well as up, so you may not get back what you invest.</p>



<p>To borrow or not to borrow? Borrow only if you can repay!</p>


In this article, we will be exploring a potential role that personal loans in Hong Kong can play in overseas property investment. Learn how to reduce mortgage interest expense of buying an overseas property through a personal loan in Hong kong.

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