HSBC Personal Line of Credit Review: Does it Fit Your Financing Needs?
HSBC Personal Line of Credit Review: Does it Fit Your Financing Needs?
ValueChampion Rating 
Pros
- Cheapest plan available
- Exclusive benefits for Premier Customers
Cons
- Lower line of credit for high income earners
- S$30,000 minimum income requirement
HSBC's personal line of credit is the cheapest available for those that plan to use it for several years. This is because HSBC's line of credit charges the lowest interest rate in the market of 14% and lower fees than other banks. Furthermore, the bank offers even better interest rates, which range from 12% to 16.5%, to its existing Premier and Personal Banking customers.
| Summary of HSBC Personal Line of Credit |
|---|
| Lowest Interest Rate: 14% |
| Lowest Annual Fee: Premier – Waived, Personal Banking - S$60 (first year waived) |
| Standard Credit Limit: Up to 4X monthly salary or 8X for Singaporeans with annual incomes of S$120,000 and above Up to 1X monthly salary for Foreigners with annual incomes of at least S$40,000 |
| Eligibility: Not available to individuals with annual incomes of less than S$30,000 |
| Promotion: |
Table of Contents
What Makes HSBC Personal Line of Credit Stand Out to Borrowers
HSBC's personal line of credit is the cheapest available for borrowers that need a credit line for more than a year due to its industry leading 14% annual interest rate. Its fees are also less expensive compared to those of other banks. For example, it charges the lowest annual fee of S$60 for personal lines of credit among banks in Singapore. Additionally, HSBC personal line of credit customers are able to take advantage of the bank's promotion to receive some of the lowest balance transfer rates in the country. These borrowers are eligible for balance transfer loans with 0% interest for 6 months with upfront processing fee of 1.38% (EIR: 3%) or 4.88% interest for 12 months, with no processing fee (EIR 4.88%). The table below summarises HSBC's personal line of credit rates and key features.
Summary of HSBC's Personal Line of Credit Costs
| Customer Status | Annual Fee | Interest Rate |
|---|---|---|
| HSBC Premier customers | Waived | 16.5% p.a. |
| HSBC Personal Banking customers | S$60, First year waived | 12.0% p.a. |
However, the HSBC personal line of credit isn't the best choice for everyone. For example, Maybank is a cheaper option for borrowers that plan to use their credit line for just a year or two because it offers a promotional interest rate of 9.8% for the first year of its personal lines of credit. Also, HSBC's personal lines of credit are not an option for lower income individuals as HSBC does not offer the product to those with annual incomes of less than S$30,000. Finally, HSBC's personal lines of credit are not the best pick for high income individuals seeking a credit line with the highest possible credit limit. While HSBC offers limits up to 8 times borrowers’ monthly salary, or S$200,000, to those with annual incomes of at least S$120,000, DBS's Cashline offers even higher credit limits of up to 10 times the monthly income of these individuals.
Who Can Apply: Eligibility Criteria
- Eligibility
- S$30,000 of annual income
- Max. Credit Limit
- 4x monthly salary (8x for annual income > S$120,000; Foreigners 1x), up to S$200,000
- Annual Fee
- S$60, waived for 1 year
Eligible applicants for HSBC's personal line of credit must be between 21 and 65 years old and meet the bank's income requirements. For Singapore Citizens or Permanent residents the annual income requirement is S$30,000. Foreigners must earn S$40,000 and have an employment pass with a validity of at least 6 months.
Other Charges & Fees
There are a few fees associated with HSBC's personal line of credit. These fees, which are standard among lenders in Singapore, are lower than many of those charged by other banks. For example, HSBC charges the lowest annual and late payment fees of S$60 and S$75, respectively, and does not charge an overlimit fee. With that said, we strongly advise that borrowers avoid unnecessary fee charges in order to minimise the total cost of their loan.
| Fee | Amount |
|---|---|
| Annual Fee | Premier – Waived, Personal Banking - S$60 (first year waived) |
| Late Payment Fee | S$75 |
| Overlimit Fee | N/A |
| Minimum Monthly Repayment | 1% or S$88, whichever is higher |
How to Apply for HSBC's Personal Line of Credit
To apply for HSBC's personal line of credit individuals must fill out an application form. Upon approval in-principle, applicants will be required to provide additional documentation including proof of income. HSBC's website does not provide details for the types of documents it requires; however, it is common for banks to request CPF contribution statements, computerised payslips or Income Tax Notice of Assessments.
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Stephen Lee is a Senior Research Analyst at ValueChampion, specializing in insurance. He holds a Bachelor of Arts degree in International Studies from the University of Washington, and his prior work experience include risk management and underwriting for professional liability and specialty insurance at Victor Insurance. Additionally, Stephen is a former US Peace Corps Volunteer in Myanmar (serving between 2018-2020), where he continues to provide business development consulting services to HR companies in Asia Pacific.