As a yearend approaches, many banks are now grasping an opportunity to launch the tax loan programmes. But, did you know differences between the tax loan and personal loan? What must we look for when applying for the tax loan Hong Kong? Let us have a look here.
What is a purpose of tax loan? Is tax loan only for paying out taxes?
As the name suggests, main purpose of the tax loan is paying taxes. In the earlier times, there are a few banks that paid tax bills straight on behalf of an applicant. However, now, certain banks do not have strict requirements for the loan purpose. It will be used for the tax payments and funds for some other plans, like home renovation, continuing education, marriage, and cash flow.
How long are a repayment period and how much one can borrow?
Generally, tax loans will come with the shorter repayment time, but majority of them provide 24 months. In the same way, loan amounts will be comparable to personal loans. There are some tax loan sums that can be more than ten times the monthly salary & not limited to tax payable, for more details you can visit https://www.221.com.hk/en/.
Pay attention to Annualized Percentage Rate
Quite similar to personal loans, the consumers must pay attention to APR while selecting the tax loan and not getting attracted just by the low rate. Calculation of the APR includes handling fees, applicable interest rates, rebates and rewards and other charges. It is the indicator that will allow the applicants to understand exact borrowing expense with complete ease. Consumers must "shop over" comparing the relevant information or terms offered by the banks before you apply. For a same loan amount or repayment time, lowest APR represents you the right deal.
How much you must borrow?
The interest charges for tax loans are much lower than any other personal loan item. But, consumers must be pragmatic while deciding on how much you must borrow. Obviously, extra loan amounts can be used as the cash reserve, however, beware of an additional interest cost involved. To minimize the lending cost, you might opt for the loans that will be withdrawn within two installments. In such way, you will drawdown loans as per the payment due date and interest expenses will be saved Lots of lenders provide ways to get discounts on the loan, whereas some might also provide special monthly rate and discounts for the early repayment. That might not sound much, but over course of a loan that the small percentage will really add up in the meaningful sum. The tax loan application process is same like other loan products.