OCBC Personal Loan Review: Interest Rates, Approval Times & Loan Amounts
Being in debt isn’t fun, and you definitely shouldn’t be taking out personal loans for fun.
But in certain cases, it can be a smart financial move—when you’re saddled with high interest debt like credit card debt, and want to consolidate your loans to lower your interest payments.
Many banks in Singapore offer personal loans. Let’s see how the OCBC Personal Loan measures up.
OCBC personal loan eligibility
To apply for an OCBC personal loan, you need to be at least 21 years of age. You need to earn at least $20,000 in annual income if you are Singaporean/PR or $45,000 if you are a foreigner.
In addition, you must be an OCBC credit card or EasiCredit account holder.
OCBC personal loan interest rate
OCBC offers several different ways to borrow money.
Their standard personal loan is called OCBC Cash-on-Instalments, which lets you convert the unused credit limit on your credit card into a personal loan with fixed installments. If you really need cash, it’s better to get it through Cash-on-Instalment than to just pay directly with your credit card as the interest rate is lower. You can borrow money for 1 to 5 years at a 5.8% interest rate. You also pay a 2% fee. The effective interest rate (EIR) ranges from 11.38% (for 5 year loans) to 14.33% (for 1 year loans) once all the fees are factored in.
While OCBC’s Cash-on-Instalment’s interest rates used to be very competitive, they aren’t anymore In fact, they’re now one of the most expensive personal loans out there. So shop around and consider other personal loans if you’re looking for a good deal.
For a OCBC Cash-on-Instalments loan of $10,000 taken over a period of 3 years, this is how much interest you would be paying:
|OCBC Personal Loan||For a loan of $10,000|
|Interest rate||5.8% p.a.|
|Effective interest rate||12.11% p.a.|
|Monthly instalments (over 36 months)||$326.11|
|Total interest payable||$1,740|
They also have a loan called the OCBC ExtraCash Loan for when you’ve already busted your credit limit. You can borrow a minimum of $1,000 to up to 6 times your monthly salary. For those with an annual income of $30,000 and above, you’ll pay a 15% interest rate, which adds up to an EIR of 15.92% (for 5 year loans) to 18.88% (for 1 year loans) once all the fees are factored in.
They’ve also got a standby line of credit called OCBC EasiCredit. Once approved, you can withdraw cash as and when you wish using an ATM card. The interest rate for those who with an annual income of at least $30,000 is 20.90%. Earn less than that and you’ll pay 29.8%, which is basically as bad as getting into credit card debt.
Finally, there’s OCBC Balance Transfer, which lets you use the unused limit on your OCBC credit cards or EasiCredit account. Balance Transfer charges an interest rate of 26%.
OCBC personal loan promotions
Until 31 Dec 2019, you can receive cashback when you make an online application for an OCBC Cash-on-Instalment loan. The cashback amounts range from $80 for loans of at least $8,000 to $320 for loans of over $32,000.
How to use the OCBC personal loan calculator
Scroll down the OCBC page on Cash-on-Instalment (fixed repayment) and you’ll find the OCBC personal loan calculator for their Cash-on-Instalment loan.
Enter how much you want to borrow and the amount of time over which you wish to repay it, and the calculator will display your monthly installments, processing fee, interest rate and EIR.
OCBC Debt Consolidation Plan
If you’ve got existing high interest debt like an unpaid credit card balance, OCBC’s Debt Consolidation Plan is another option. Transfer your existing debt to OCBC and you’ll pay a 6% interest rate with zero processing fee, choosing from a loan tenure of 3 to 8 years.
Why opt for this instead of the Cash-on-Instalments loan? Well, if you have already busted your credit limit with OCBC, you won’t be eligible for Cash-on-Instalments. Cash-on-Instalments also offers a maximum tenure of 5 years, while the Debt Consolidation Plan offers up to 8 years.
How long does approval take for OCBC personal loans?
In order to apply for an OCBC Cash-on-Instalment loan, you need to be an existing OCBC credit card or EasiCredit holder. Approval is instant and the money will be transferred to a bank account designated by you.
A word of warning about personal loans
There are so many loans on offer, lucky you… right? Not really! While the OCBC Cash-on-Instalment personal loan certainly charges lower interest rates than a credit card would, it’s still a form of high interest debt. That means personal loans should only be used as a last resort to prevent yourself from having to fall into credit card debt or consolidate existing debt.
If you find yourself using personal loans regularly, it’s time to have a look at your finances. Chances are, you need to consistently reduce your spending and/or find ways to raise your income in order to stay debt-free. You’ll also need to build up an emergency fund, which you can then turn to when unexpected expenses arise instead of getting into debt.
Do you have any experience with OCBC Personal Loans? Share your reviews in the comments!