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Compare Personal Loans
Find and compare personal loans from HK$10,000 to HK$500,000 from a range of lenders.
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What do you want to learn about?
Finding the right personal loan
How a personal loan works, the types that are available and how to choose.
Comparing features and costs
Features that make a personal loan competitive and how much the loan will cost.
Finding the right personal loan
This section is about:
- How a personal loan works
- How to choose a personal loan
- What types of personal loans are available
What is a personal loan?
A personal loan is a secured or unsecured lump sum payment or line of credit between HK$10,000 and HK$3,000,000 over up to seven years. You can use the money for a range of purposes, such as undertaking renovations, consolidating debt, paying for a wedding or even vacations. Personal loans are an agreement between you and a lender for you to have a certain amount of money and pay it back over time.
How do personal loans work?
Personal loans are a lump sum payment or a line of credit that you pay back over time. While these loans differ slightly between lenders, generally you can expect the following:
- Application and approval. You can apply for a personal loan from a bank, credit union or standalone lender online, over the phone or in-branch, depending on what application types the lender offers. The time it takes to be approved depends on the lender, but it can range from anywhere between 60 seconds to a week or two.
- Loan contract. When you are approved for a loan you will need to agree to a loan contract that sets out certain terms. These terms include long you’ll have to repay the loan, what fees you’ll need to cover, and the rate of interest you’ll be charged on your loan amount.
- Loan terms. Your loan terms will be set out in your loan contract. Generally, loan terms range between one and seven years.
- Loan costs. Lenders agree to lend you money in exchange for interest, which is charged annually. This interest can be fixed or variable. Other loan costs include administrative fees, handling fees etc. You should also check if you will be charged fees for repaying your loan early or making additional repayments.
- Loan types. There is a wide variety of personal loans available in the market, with each one coming with a set of terms and restrictions. For instance, when you apply for a car loan the lender often requires that the entire loan amount be used for your car purchase. The car is also often required to be used as security in case you default on the loan. An unsecured personal loan, on the other hand, is less restrictive and you can use the loan amount in almost any way you choose.
How do I go about choosing a personal loan?
The types of personal loans that are available to you
There is a wide range of personal loans available in Hong Kong. You can be eligible for any one of these loans depending on your income, employment situation, what you’re taking out the loan for, how much you can afford to repay and how good your credit is. Find out what loan may work for you with the below options.
- Secured personal loans. This type of loan works by you offering an asset as security in exchange for lower rates and fees. Usually, this loan is used to purchase a car, but other types of assets can be used as well.
- Car loans. Looking to purchase a new or used car? You can opt for a car loan through a bank, lender or even using dealer finance in order to help you make your purchase.
- Unsecured personal loans. If you don’t want to put up an asset as security, or want to finance something unsuited to a secured personal loan, you might want to consider a loan that doesn’t require a guarantee.
- Line of credit. You’ll get access to a set credit limit, but only pay interest on the funds you’ve used. You can consolidate debts or even fund a range of purchases with this type of loan.
- Debt consolidation loan. Existing debt can be managed by taking out a debt consolidation loan. Consolidate separate loan accounts into one easy-to-manage loan with a potentially lower rate and with fewer fees.
- Overdrafts. An overdraft is a lot like an unsecured loan but it is generally attached to your everyday bank account. You are given a set amount that you can withdraw from your account, once your own funds have been exhausted.
- Bad credit loans. If you have bad credit but are in need of a loan, there are still options available to you. Either apply with a lender who doesn’t perform a credit check, or who accepts applicants with negative listings on their file.
How to compare personal loans
This section is about:
- What makes a personal loan competitive
- The interest rate and fees to expect
- Working out your borrowing power
Features of personal loans: What makes a loan competitive?
When comparing your personal loan options, it’s helpful to keep in mind the range of features that are available with these loans. When comparing, here are some of the questions you’ll need to ask.
- Does the loan have a competitive interest rate? Rates on personal loans will be either fixed or variable. Compare rates across similar loan products to ensure you’re getting the best deal. If the loan is risk-based, meaning you receive a rate based on your credit history and your general risk profile, you’re generally able to receive a rate estimate before you apply without it affecting your credit score. This way you can use the risk estimate to compare your options.
- What are the fees and charges? You’ll need to consider both ongoing fees and fees charged at the onset of the loan. Common fees include an application fee or loan set-up fee, while monthly fees and annual fees are common ongoing fees. You may also be charged to use additional features of the loan.
- Is there repayment flexibility? How often are you able to make repayments? Are you able to make additional repayments or pay off the loan early without penalty?
- Do the loan terms match your needs? Personal loans are usually offered for terms of between one and seven years, with other loans on offer for shorter time periods. Some lenders are more restrictive than others when it comes to how long you have to repay your loan – for instance, only offering terms of one, three or five years. Make sure the loan terms on offer are what you need. Long term loans over seven years often see lower repayments but a greater amount of interest paid.
The interest rates and fees to expect on personal loans
The interest rate and fees you are charged depend on the loan you apply with (you can compare these on the table above), but each loan type comes with similar costs, and understanding these can help you compare personal loan options.
The interest rate
Your interest rate will either be fixed or variable. Car loans tend to come with fixed rates while unsecured loans offer both, but you will find a mix of variable and fixed rates within each loan type. Variable rate loans mean the loan is more flexible and comes with longer loan terms, but fixed rate loans usually come with restrictions, such as not allowing you to make extra repayments. Fixed rate loans also come with shorter terms, usually up to five years.
Personal loans can also come with set interest rates or risk-based interest rates. Set interest rates mean the loan comes with a single rate that all approved applicants receive. Risk-based rates mean the personal loan will come with an interest rate range and you will be approved for an interest rate within that range. The factors that influence what rate you get depend on your credit history, the amount you apply for and the loan term and the details you provide in your application.
There are three types of fees you should expect: Upfront fees (handling fees, administrative fees), ongoing fees (annual or direct debit fees) and fees that are charged if you default on the loan or miss a repayment.
Applying and being approved for a personal loan
This section is about:
- Who is eligible for a personal loan?
- Documents you need for your application
- How to improve your chances of being approved
- The application process
Who is actually eligible for a personal loan?
Eligibility for personal loans depends on a few different things:
- If you have a low income. Applicants with low incomes can still be approved for personal loans. It’s always a good idea to check the borrowing requirements and check your repayments with a calculator.
- If you have bad credit. You’re still able to apply for certain personal loans if you have negative marks on your credit file. Bad credit loans are still possible. You might end up paying a higher interest rate on these loans, so it’s important to compare a range of offers before applying.
- If you have an existing credit card or personal loan debt. You may still be approved for a new personal loan if this is the case, but you should calculate your repayments and your debt levels before continuing.
- If you don’t meet the minimum requirements. You still might be able to apply with a guarantor. This is where someone, usually a family member such as a parent, agrees to ‘guarantee’ your personal loan should you fail to meet your obligations.
What documents will I need when applying for a loan?
Each bank and institution have their own criteria that you will have to meet to finalise your loan application.
How do I know which type of personal loan I need?
Different type of personal loans suit different loan purposes. Here is how to find the right loan to suit your needs:
- If you’re looking to buy a car: You can consider either a car loan or an unsecured personal loan. A car loan is preferable if the car you’re looking to purchase is eligible to be used as security (not all used cars are) as the interest rates are lower. However, if you’re buying a used car that is older, don’t want to use the car as security for the loan or want to borrow extra funds for something else as well, you may want to consider an unsecured personal loan.
- If you want to consolidate debt: You can consider an unsecured personal loan or a balance transfer credit card. The right option for you will depend on the type of debt you want to consolidate, how much debt you have and what products you are eligible for. For example, if you have loan and credit card debt you may need to consider an unsecured loan or balance transfer facility.
- If you want to pay for a wedding, take a holiday or pay for home renovations. You may want to consider an unsecured loan. These can come as either a lump sum payment or a convenient line of credit that you can draw on when you need to.
- If you need to borrow less than HK$10,000. You won’t have many options from banks for loans of this amount, so you may need to consider a personal overdraft, a line of credit or a credit card. You can also consider a short term loan but keep in mind these are very high-cost forms of credit and should only be taken out if you have no alternatives.
- If you have an asset, such as a vehicle, to offer as security. You can consider a secured personal loan. This involves you attaching an asset you already own to take advantage of a more competitive interest rate. You can then use the funds for any purpose.
I need a loan for debt consolidation
Debt consolidation loans work by letting you bring debts from different credit accounts together so you can pay them off with one rate and one set of fees.
When you’re comparing loans for debt consolidation:
- Consider whether the new loan will save you money. Work out your new monthly repayment and if this will be lower than what you are currently paying.
- Think about your eligibility for the loan. If you have a lot of debt from several accounts you may not be able to consolidate all of it, or if you have bad credit you may need to consider your bad credit debt consolidation options.
How can I improve my chances of the loan being approved?
There is no way to guarantee you’re approved for a personal loan, but giving yourself the best chance at being approved starts with meeting the eligibility criteria set by the lender. To further your chances of being approved, keep the following in mind:
- Establish your borrowing capacity. What repayments can you afford? Lenders will use a variety of criteria to decide how much you’re eligible to borrow, but you need to know how much you can afford to repay.
- Building a good banking history. Keep your account in good standing to build a positive relationship with your bank, even if you don’t plan on borrowing from them.
- Keep your credit rating in good standing. Make sure you keep track of all your payments, from credit cards to utility bills, because any arrears, debts, or missed payments will affect your ability to access credit.
- Keep track of your saving goals. If you manage to contribute to your savings regularly, it shows lenders that you are likely to manage ongoing loan repayments.
How to apply for a personal loan
- Get ready to make your purchase. Make sure you know how much you want to borrow and have worked out that you can meet the repayments.
- Choose a secured or unsecured loan. If you already own an asset or are looking to buy one, then a secured loan may be an option. If not, you may want to consider your unsecured personal loan options.
- Decide between a fixed or variable rate. A fixed rate loan means your repayments are set for the life of the loan and can’t fluctuate, whereas a variable rate loan can increase or decrease your repayments over the life of the loan.
- Choose your terms. A loan calculator can help you work out your repayments.
- Start your personal loan research and comparison. This is an important step to finding the best loan option for you.
- Click through and apply. Once you find the loan you want to apply for, simply click ‘Go to Site’ to apply.
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The offers compared on this page are chosen from a range of products finder Hong Kong has access to and are not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of the terms “popular”, “best” and “top” are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.
The questions we’ve been asked about personal loans
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