Standard Chartered personal loan review: Is SCB CashOne personal loan the best?, Money News
Now that most pandemic restrictions have been lifted, the number of things we can spend money on has skyrocketed, from overseas holidays to clubbing sessions.
That could be the reason why personal loan searches have skyrocketed lately. Oops!
Now we sincerely hope that no one takes out a loan to go on vacation or open bottles of Martell in KTV lounges.
However, if you really need a personal loan for a valid reason like a medical emergency or to consolidate your existing credit card debt, we’ll look at Standard Chartered’s (SCB) CashOne personal loan, which you may have already heard about thanks to the bank’s aggressive marketing.
Are Personal Loans Bad?
“Not all debt is bad,” says one of Standard Chartered’s marketing slogans. Technically, that’s true – an HDB loan, for example, isn’t bad. But that doesn’t mean you should always borrow.
Monthly payments can really pile up, and personal loans and credit card debt are considered high-interest debt that can bankrupt some people. Also, be aware that certain *cough-cough* banks are clearly using shady marketing gimmicks to lure unsuspecting people into debt.
By the way, you should do thorough research and compare loans before deciding on a personal loan as it is a long-term commitment and it may take a few years for you to repay it.
Now that we’ve got all the nagging out of the way, here are the facts about the SCB Personal Loan and how it compares to the popular DBS Personal Loan, OCBC Personal Loan and UOB Personal Loan.
Standard Chartered CashOne Criteria for Applying for a Personal Loan
SCB’s personal loan is called CashOne.
To qualify for the loan, you must meet the following criteria:
- Aged from 21 to 65 years
- Singapore Citizens and PRs: Minimum annual income of $20,000
- Foreigners: Minimum annual income of $60,000, must hold a valid Singapore Employment Pass
SCB Personal Loan Application and Approval Time
You can apply online with the following documents:
- Copy of NRIC or passport
- Most recent computerized payslip or CPF contribution history statement for the past six months
- Income tax assessment (if you want to be considered for a higher loan amount)
- Work ID (only for foreigners)
- Proof of address (foreigners only)
If you are an existing client and have no income/employment changes as per SCB’s records, congratulations! You do not need to submit any evidence.
In theory, SCB offers instant approval of loan applications made online or through their mobile app. However, if the bank needs more information from you, you may have to wait up to 1 business day for your application to be reviewed.
SCB Personal Loan Rate (2022)
SCB currently offers interest rates starting at 3.48 percent per annum, which equates to an effective interest rate (EIR) of 6.95 percent for a loan term of one to five years.
You’ll also have to pay an annual fee of $199 for the first year, which will be deducted from your approved loan amount.
These interest rates are very competitive, with local banks UOB and OCBC currently charging much more.
If you want to check interest rates, use MoneySmart’s personal loan comparison tool to see what different banks are offering for your desired loan amount and loan term. Keep in mind that the interest rate and EIR will vary depending on the loan amount and the loan term.
StanChart CashOne Personal Loans vs. DBS, POSB, OCBC, UOB Personal Loan Interest Rates
Suppose you need to borrow $10,000 and plan to pay it back over three years.
Here is a comparison chart so you can see how the Standard Chartered Personal Loan would compare to the local banks.
|interest rate||EIR||Monthly Rate||Total amount to be paid|
|Standard Chartered||3.48 percent||7.99 percent||$307||$11,044|
|DBS/POSB||3.88 percent||7.9 percent||$310||$11,164|
|OCBC||5.43 percent||11.47 percent||$323||$11,629|
|UOB||3.4 percent||6.42 percent||$306||$11,020|
If you can afford it, always go for the shorter term as the total amount of interest you will have to pay over the years will be less. Banks often try to force longer loan terms, such as five years, on you. Don’t fall for it because you will end up paying for it.
With MoneySmart’s personal loan comparison tool, you can calculate the interest rate and total amount to be paid for your own loan amount and term.
Standard Chartered Personal Loan Promotions
Standard Chartered currently runs the following personal loan promotions:
Get $100-$2,400 in cashback when you sign up for a personal loan of at least $10,000 with a term of three to five years by June 30, 2022.
Through June 30, 2022, JumpStart account holders will receive up to $2,688 cashback upon approval of a minimum $5,000 personal loan with a term of three to five years.
SCB Personal Loan Calculator
You want to know exactly how much you have to pay monthly and at what interest rate? You can use The SCB personal loan calculator at the top of this page.
Alternatively, you can use MoneySmart’s personal loan calculator, which not only shows you your monthly repayments and interest, but also shows you processing fees.
Here are the main parameters you need to pay attention to:
- Monthly Repayments – How much you have to pay in installments each month
- Total Repayable – This is the total amount, consisting of the amount borrowed + interest payments, that you will repay over the life of the loan.
- Applied / Effective Interest Rate – This is the actual interest rate you pay when all fees and charges are taken into account.
It is important that you pay your monthly installments in full! If you don’t, you’ll be hit with a $100 late payment fee. Ouch! Not exactly nice when you’re already in debt!
You can pay your monthly installments through online banking, through the Stanchart mobile app, or through AXS and ATMs. But the easiest and most convenient way is by GIRO – you won’t miss a payment as it’s automatically debited from your savings account.
What if you find a pile of money hidden under your bed and decide to pay off your loan early? You can, but you must pay an early redemption fee of $150 or three percent of your outstanding principal, whichever is greater. Once the loan is repaid, your account will be closed.
Standard Chartered CashOne Personal Loan vs. SCB Credit Card Wire Transfer vs. Debt Consolidation
Debt consolidation is a different beast than personal loans. Instead of borrowing fresh money, you simply roll over your existing debt from various other loans or credit cards into a single loan, usually to take advantage of lower interest rates.
The SCB Credit Card Fund Transfer works similarly to debt consolidation, but only applies to credit card debt. So you can transfer your debt from other cards to an SCB plan. This makes life easier as you now only have to pay one credit card bill instead of juggling several.
As you can see, the CashOne personal loan is quite different as it allows you to borrow fresh money which you then pay back on top of your other loan or credit card debt.
Be careful with personal loans
If you’ve read this entire article, you’re probably seriously considering getting a personal loan. Here’s yet another reminder that personal loans are for needs, not wants, and because of the high interest rates, they should never be taken out for anything that isn’t absolutely necessary.
So if you have a medical emergency or your refrigerator breaks down, you can take out a personal loan to protect yourself from credit card debt. But for everything else – holidays, shopping, celebrations, weddings, etc. – you just have to save.
ALSO READ: Everything You Need to Know About Singapore Debt Consolidation Loans
This article first appeared in MoneySmart.