Standard Chartered personal loan review: Is SCB CashOne personal loan the best?

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PUBLISHED ONMay 11, 2022 9:17 AMByJoanne Poh

Now that most of the 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 why there's been a recent spike in searches for personal loans. Yikes!

Now, we sincerely hope nobody is taking out a loan in order to go on holiday or open bottles of Martell at KTV lounges.

But if you're genuinely in need of a personal loan for a legit reason like a medical emergency or to consolidate your existing credit card debt, we're going to look at Standard Chartered's (SCB) CashOne personal loan, which you might already have heard of thanks to the bank's aggressive marketing.

Are personal loans bad?

"Not all debts are bad," says one of Standard Chartered's marketing taglines. Technically, this is true-an HDB loan is not bad, for example. But that doesn't mean you should take out loans whenever you like.

Monthly payments can really pile up, and personal loans and credit card debt are considered high-interest debt that can make some people go bankrupt. Also, be aware that certain *cough cough* banks clearly resort to shady marketing gimmicks to lure unsuspecting people into debt.

By the way, you should be doing thorough research and comparing loans before you decide to sign up for a personal loan since it's a long-term commitment and it could be a few years before you'll be paying it off.

Now that we've got all that nagging out of the way, here's the lowdown on the SCB personal loan and how it compares to the popular DBS personal loan, OCBC personal loan and UOB personal loans.

Standard Chartered CashOne personal loan application criteria

SCB's personal loan is called CashOne.

To qualify for the loan, you must satisfy the following criteria:

Aged 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 & approval time

You can apply online with the following documents:

Copy of NRIC or Passport
Latest computerised payslip or latest six months' CPF contribution history statement
Income Tax Notice of Assessment (if you wish to be considered for a higher loan amount)
Employment Pass (foreigners only)
Proof of address (foreigners only)

If you're an existing customer with no changes in income/employment as per SCB's records, congrats! You don't need to submit any supporting documents.

In theory, SCB offers instant approval of loan applications made online or via their mobile app. However, if the bank requires more information from you, you may need to wait up to one working day for your application to be assessed.

SCB personal loan interest rate (2022)

SCB is currently offering interest rates starting from 3.48 per cent per annum, which works out to an Effective Interest Rate (EIR) from 6.95 per cent for a loan tenure of one to five years.

You also have to pay an annual fee of $199 in the first year, which will be deducted from your approved loan amount.

These interest rates are very competitive, with the local banks UOB and OCBC charging much more right now.

If you want to double-check interest rates, use MoneySmart's personal loan comparison tool to see what the various banks are offering for your desired loan amount and loan tenure. Remember that the interest rate and EIR will vary depending on your loan amount and loan tenure.

StanChart CashOne personal loan vs DBS, POSB, OCBC, UOB personal loan interest rates

Suppose you need to borrow $10,000 and plan to repay it over three years.

Here's a comparison table to let you see how Standard Chartered's personal loan would compare to the local banks'.

	Interest rate	EIR	Monthly instalment	Total amount payable
Standard Chartered	3.48 per cent	7.99 per cent	$307	$11,044
DBS/POSB	3.88 per cent	7.9 per cent	$310	$11,164
OCBC	5.43 per cent	11.47 per cent	$323	$11,629
UOB	3.4 per cent	6.42 per cent	$306	$11,020

If you can afford it, always go for the shorter tenure, as the total amount of interest you'll have to pay over the years will be lower. Banks often try to push longer loan tenures like five years on you. Don't fall for it, as you'll end up paying for it in the long run.

Using MoneySmart's personal loan comparison tool, you can work out the interest rate and total amount payable for your own loan amount and tenure.

Standard Chartered personal loan promotions

Standard Chartered is currently running the following personal loan promotions:

Get $100 to $2,400 cashback when you sign up for a Personal Loan of at least $10,000 with a three to five-year tenor by Jun 30, 2022.

JumpStart account holders get up to $2,688 cashback upon approval of Personal Loan of at least $5,000 with a three to five-year tenor by Jun 30, 2022.

SCB personal loan calculator

Want to know exactly how much you'll have to pay per month and at what interest rate? You can use SCB's personal loan calculator at the top of this page.

Alternatively, you can MoneySmart's personal loan calculator, which not only shows you your monthly repayments and interest rates but also indicates processing fees.

Here are the key parameters you need to take note of:

Monthly repayments - Indicates how much you must pay every month in instalments
Total amount repayable - This is the total amount of money, consisting of the sum borrowed + interest payments, that you'll be repaying over the tenure of the loan.
Applied / effective interest rate - This is the actual interest rate you'll be paying when all fees and charges are taken into account.

Paying your monthly instalments in full is important! If you don't, you get slapped with a late payment fee of $100. Ouch! Not exactly nice when you're already in debt!

You can pay your monthly instalments through online banking, via the Stanchart mobile app or via AXS and ATM machines. But the easiest and most convenient way is by GIRO-this ensures you never miss a payment, as it will be deducted automatically from your savings account.

What if you find a stash of money hidden under your bed and decide to pay off your loan early? You can, but you'll have to pay an early redemption fee worth $150 or three per cent of your outstanding principle, whichever is higher. Once the loan is paid off, your account will be closed.

Standard Chartered CashOne personal loan vs SCB Credit Card Fund Transfer vs Debt Consolidation

Debt consolidation is a different beast from personal loans. Instead of borrowing fresh money, you're simply transferring your existing debt from various other loans or credit cards to one single loan, typically to take advantage of lower interest rates.

The SCB Credit Card Fund Transfer functions in a similar fashion to debt consolidation but applies only to credit card debt. So, you can transfer your debt from other cards to one SCB plan. This makes life easier as you now need to pay only one credit card bill rather than juggle several.

As you can see, the CashOne personal loan is quite different, in that it lets you borrow fresh funds, which you will then repay on top of your debt from any other loans or credit cards.

Be cautious with personal loans

If you've read this entire article, chances are you are seriously considering taking out a personal loan. Here's yet another reminder that personal loans are for needs, not wants, and due to the high-interest rates should never be taken out for anything that's not absolutely necessary.

So, if you've got a medical emergency or your fridge broke down, you can take out a personal loan in order to save yourself from getting into credit card debt. But for everything else-holidays, shopping, partying, wedding ang baos, etc, you'll just have to save up.

ALSO READ: Everything you need to know about debt consolidation loans in Singapore

This article was first published in MoneySmart.

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