Are you shopping around for personal loans? Why not try out the POSB Personal Loan. Understand how it works through this article.
The fact that you are reading this article means you are considering applying for the POSB Personal Loan. Read on to know the 10 points on POSB personal loans that some borrowers usually overlook.
The POSB Personal Loan is offered only to Singapore citizens or Permanent Residents aged 21 to 65. However, even the DBS Cashline customers can avail this personal loan. You must be earning at least $20,000 a year and above to qualify.
Though you are eligible considering your nationality, age and income, POSB bank will still use other factors to know if you qualify for its personal loan. So before you apply for the loan, here are some information you need to understand.
You have to apply for a Credit Card or Cashline account first before taking up a POSB Personal Loan for new customers. Also, it will mean that you will need a DBS/POSB deposit account. If you already have a DBS/POSB Credit Card and/or Cashline account, you will only be approved if your account is in good standing.
DBS will determine your good standing according to your payment history and if you have any pending cases such as default or bankruptcy.
Low promotional interest rates are only offered for loan tenors longer than 36 months. In addition, POSB personal loan promotional rates are only for approved accounts of more than $3,000. It is only for Singaporeans and Permanent Residents.
The processing fee for qualified accounts applying for personal loans longer than 36 months is only 2% from the original price of 3%. The annual effective interest rate is only 11.32% to 12.04%, from the usual 15.07 % to 16.23%.
Late payments charge $80 for credit cards and $90 for Cashline. Therefore, it is essential not to miss your payment due dates.
Though you may think that you can afford the late payment penalties, they will report your delinquent behaviour to the credit bureau.
Having a bad credit score will affect your future loan applications. Some money lenders may offer you a loan despite the low credit score, so expect a higher interest rate.
POSB may grant a credit limit at its discretion, which may differ from what is requested. Though you may ask for any amount for your personal loan, POSB will decide how much you can borrow. The decision is final and will not be changed anymore.
The personal loan granted to you will not exceed 95% of the current credit limit of your credit card or cash line. It means that your actual loan amount plus other fees will not exceed your credit limit. However, if the approved amount is higher than the credit limit, DBS will only grant just the equivalent of 95% of the limit.
$150 is charged for each Personal Loan if full repayment is made before each Personal Loan’s respective loan tenures expiry. It means you will have a pre-payment penalty every time you settle your loan at an earlier date than the due date.
If you close your credit card or cashline account, the total amount of your personal loan is due and payable. So regardless of your loan still has a few months before its expiration, as soon as your account is closed, you need to pay off the remaining balance and other fees.
DBS may reject the application without giving any reason. If you have been wondering why you got rejected, do not expect any explanation from the bank. It is best to check your credit score and make it higher.
It shall apply a payment to your account to first settle the outstanding balances that attract the highest interest. If you have a couple of services to pay in your account, this is how POSB will determine your payment. Personal loan repayments will be the priority, followed by the balance transfer and other withdrawals.
The processing fee, together with the Instalment Amount, will be debited from your DBS/POSB Credit Card and/or Cashline account.
Do not forget to carefully read the terms and conditions to avoid bill shock when getting a loan. There is more to compare other than the interest rate. Also, find the loan flexible enough to fit your needs.
If you are looking for quick cash loans without applying for a credit card or cashline account, you can get it from Cash Mart.