**OCBC Personal Loan Review**

**This OCBC bank loan has 2 types of lending option:**

*OCBC personal loan explained with easy-to-understand examples, less the mind-boggling financial jargon.***EasiCredit (OCBC Easy Credit)**– Flexible payment over any period**ExtraCash (OCBC Extra Cash)**– Fixed monthly payment over 1-5 years

**repayment period and installment amount**will determine which option works for you. To help you decide, we will

**break down both options**into simple terms, complete with examples.

## Difficult Terms Simplified

Banks use various confusing**interest rate terms**in their ads. E.g. advertised rate, nominal rate, effective interest rate (EIR), and daily accrued rate. You can’t make a

**meaningful comparison**without understanding it. So we have

**simplified these terms**for you below:

**1) Advertised Interest Rate**

This is usually the **interest rate**that you see in loan ads. It is also called the

**advertised rate, nominal rate, applied rate**or a

**flat rate**. And it factors in the

**loan amount ONLY**.

*E.g. If the*

**advertised rate is 20% per year**, then you have to pay**$200 of interest**for S$1,000 you have borrowed.**2) Effective Interest Rate (EIR)**

This is the **actual interest rate**that you are going to pay. It is also known as the

**effective annual percentage rate (APR)**or the

**true cost of borrowing**. And it factors in

**ALL of the following**:

- Loan amount
- Admin/service/processing fee
- Installment frequency (e.g. repay monthly or weekly)
- How many installments
- How much is each installment amount
- Are the installment amount equal or not

*E.g. The*

*advertised rate is 20% per year**. And the loan is to be repaid in 12 equal installments, with an upfront admin fee of S$100 for S$1,000 borrowed.*

*You will receive S$900, with a monthly installment amount of S$92.56.*

*The total cost of borrowing is S$100 + (S$1,000 – S$92.56 x 12 installments), or*. The

**S$210.72****EIR is actually 38.86%**!

Banks must showEffective Interest Rate (EIR)if it differs from the advertised rate. So when there’s onlyone interest rateindicated in the loan ad, this means it’s theEIR.

**3) Daily Accrued Interest**

This means **interest amounts**add to the account balance every day.

*E.g. The*

*interest rate is 20% per year**, with interest accrued daily on a (365-day) year contract. The daily rate is 20%/365 days, or*

*0.05479%**.*

*So the*

**accrued interest of a S$1,000 loan for 31 days**is equal to $1,000 x 31 days x 0.05479%, or**S$16.99**.## What is OCBC EasiCredit Loan?

It’s a**flexible repayment loan**where you can decide

**how long**and

**how much**you would like to repay. The repayment amount is:

**3-5% of the outstanding amount or S$50**(whichever is higher). And

**repayable monthly**. Its

**Advertised Interest Rate & EIR**are the

**same**, and it is daily accrued interest.

### For Whom

If you are looking for**short term loans (< 12 months)**, and not confident of making

**fixed payment**.

### Summary of OCBC EasiCredit

Annual Income | S$20,000 to S$29,999 | S$30,000 to S$119,999 | S$120,000 or more |
---|---|---|---|

Advertised Interest Rate / Year | 29.8% | 20.9% | 20.9% |

Effective Interest Rate (EIR) / Year | Same as above | Same as above | Same as above |

Max Credit Limit | 2X monthly salary | Up to 4X monthly salary | Up to 6X monthly salary |

Min Repayment | 5% of outstanding amount OR S$50 (whichever is higher) | 3% of outstanding amount OR S$50 (whichever is higher) | 3% of outstanding amount OR S$50 (whichever is higher) |

Annual Fee | S$80 | S$80 | S$80 |

Processing Fee | - | - | - |

Late Fee | S$80 | 25% of the amount past due, subject to min charge of S$85 and max charge of S$125 | 25% of the amount past due, subject to min charge of S$85 and max charge of S$125 |

### Example

*E.g. The*

*OCBC loan interest rate is 29.8% per year**, with interest accrued daily on a (365-day) year contract. The daily rate is 29.8%/365 days, or*

*0.082%**.*

*So the*

**accrued interest of a S$1,000 loan for 31 days**is equal to $1,000 x 31 days x 0.082%, or**S$25.31**.*The total cost of borrowing is*.

**S$25.31 of interest**+**S$80 of annual fee**, or**S$105.31**## What is OCBC Extra Cash Loan?

It’s a**fixed repayment loan**where you can decide

**how long (from 12 to 60 months)**you would like to repay. The repayment amount is:

**fixed**and

**repayable monthly**. Its

**Advertised Interest Rate & EIR**are

**different**, and it is daily accrued interest.

### For Whom

If you are looking for**long term loans (> 12 months)**, and confident of making the

**fixed payment monthly**.

### Summary of OCBC ExtraCash

Annual Income | S$20,000 to S$29,999 | S$30,000 and above |
---|---|---|

Advertised Interest Rate / Year | 15% | 22% |

Effective Interest Rate (EIR) / Year | > 15% | > 22% |

Max Credit Limit | Up to 6X monthly salary | Up to 6X monthly salary |

Min Repayment | - | - |

Annual Fee | - | - |

Processing Fee (Upfront Deduct) | S$100 | S$200 or 2% of the approved loan amount, whichever is higher |

Late Fee | S$80 | S$80 |

### Example

*E.g. The*

*OCBC loan interest rate is 15% per year**, and the loan is to be repaid in 12 equal installments. And there’s an upfront admin fee of $200 for S$10,000 borrowed.*

*You will receive S$9,800, with a monthly installment amount of S$903.*

*The total cost of borrowing is S$200 + (S$10,000 – S$903 x 12 installments), or*.

**S$1,036***The*

**EIR is 18.88%***.*

## OCBC Loan Calculator (ExtraCash)

**OCBC ExtraCash**loan page do not have anything to help you

**calculate your installment**for a given loan amount. So we created our own. Insert

**Loan Amount**,

**Processing Fee**,

**Advertised Interest Rate**, and

**Number of Months**below.

## OCBC Personal Loan Requirements

The**eligibility for both types of OCBC bank loan**is the same and it is as follows:

### Eligibility

- 21 years old and above
- Singaporeans or PR: Annual Income of S$20,000 and above
- Foreigner: Annual income of S$45,000 and above

### Documents Required

**1. For Identificatio**n (Choose One)

- Singaporeans and PRs: NRIC
- Foreigners: Employment Pass, Work Permit, or Student Pass; and Passport

**2. For Income** (Choose One)

- Latest electronic or computerised payslip (salaried employees); or
- Last 6 months of CPF contribution history. 12 months for self-employed and commission-based earners; or
- Latest income tax statement (2 years for self-employed and commission-based earners)

## OCBC Personal Loan VS Moneylender

Have you ever wondered if bank rates are cheap,**why would one borrow from a licensed money lender**? Since

**OCBC EasiCredit**and a

**Moneylender’s loan**are very similar, we will use it to do a comparison.

OCBC EasiCredit | Licensed Moneylender | |
---|---|---|

Annual Income | S$20,000 onwards | Any income |

Advertised Interest Rate | 20.9% to 29.8% / Year | 4% / Month |

Effective Interest Rate (EIR) / Year | Same as above | > 4% |

Max Credit Limit | 2-6X monthly salary | S$3K to 6X monthly salary |

Min Repayment | 3-5% of outstanding amount OR S$50 (whichever is higher) | 4% of the outstanding balance |

Annual Fee | S$80 | - |

Processing Fee | - | 10% of the loan amount |

Late Fee | S$80 to 25% of the amount past due, subject to min charge of S$85 and max charge of S$125 | S$60 / Month |

**example**below, you can see the

**total cost of borrowing**S$1,000 for a month, does not differ much –

**S$34.69 only**.

### Example

OCBC EasiCredit | Licensed Moneylender | |
---|---|---|

Loan Amount | S$1,000 | S$1,000 |

Loan Period | 31 Days | 31 Days |

Processing Fee | - | S$100 |

Annual Fee | S$80 | - |

Advertised Interest Rate | 29.8% / Year | 4% / Month |

Amount You'll Receive | S$1,000 | S$900 |

Interest Amount | S$25.31 | S$40 |

Total Cost (Interest + Fees) | S$105.31 | S$140 |

**quicker approval and lesser paperwork**. This is because they are more flexible with rules and procedures. Money lenders can also accommodate those with a

**lower credit score**, or

**annual income below S$20K**.