HSBC Personal Instalment Loan

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Annual Fee

Not applicable

Handling Charge

Subject to promotional offer

Early Redemption Penalty

2% of outstanding principal amount plus repayment of any applicable promotional offers

Deferred Payment

Deferred Payment (for 1st repayment): 2.25% per month on approved loan amount, calculated on daily basis

Late Charge

2.25% per month calculated on daily basis for amounts in arrears, plus HKD400 on each instalment due to insufficient funds

Unauthorized Overdraft Handling Charge

Not applicable

That depends on two key factors: how much you need to borrow, and how much you can afford to repay.

It's best to borrow only what you actually need and resist the temptation of borrowing extra money. Remember, your loan does not have to be for a round figure! You can usually borrow the exact amount you need.

It's also wise to look at all your other expenses while working out how much you can afford to repay. Try not to spend more than 30% of your gross monthly income on all your loan repayments, with the possible exception of mortgage repayments which may be up to 50% of your income. That way, you can better ensure that you can afford the extra cost of loan repayments without worrying that you can't meet other financial commitments.

A good general rule is to avoid borrowing for longer than the life of what you're paying for. For example, if you have an annual expense such as a tax bill, aim for a loan of 12 months of less. Otherwise, you'll still be paying off your first loan when the next year's tax demand arrives.

By budgeting carefully, you can balance the loan amount, loan period, and amount you can afford to repay each month.

A Personal Instalment Loan lets you repay the whole loan amount in regular monthly amounts within a fixed repayment period. This might help you manage your finances more easily.

A Revolving Credit Facility provides you with a revolving credit limit on standby. That means you could withdraw a loan within the limit whenever you want. There is no fixed monthly repayment amount or repayment period. You'll only be charged interest based on the amount you withdraw.

Generally, the earlier you make your loan repayment, the more you'll save on outstanding interest payments. But you should consider early repayment charges before you decide whether or not to pay off your loans early.

We use the 'Rule of 78' (also known as the 'straight-line method') to calculate the interest and principal proportion in each monthly repayment. While your monthly repayment amount remains the same throughout the loan tenor, more interest will generally be included in earlier repayments than principal. That means the amount of outstanding interest is likely to be small if you've been making repayments as scheduled for some time.

If you choose to pay off the loan early, you may lose more than you gain because the amount of interest saved may not be enough to cover any charges for an early repayment. If you're considering an early repayment, you can contact us to check the total amount you'll need to pay, including the outstanding loan balance, early repayment charges and other fees, and outstanding interest. This way, you can compare and make an informed decision on whether to go ahead with the early repayment.