HSBC Personal Loan Interest Rates
Minimum Salary 5000 AED
EMI Tenure up to 48 Months
Lowest Interest Rates
Get personal loan at Lowest Interest Rate
With its presence in the region going back to 1946, HSBC is one of the leading banks in the UAE and offers numerous personal loan products to meet the financial needs of its customers. With an HSBC personal loan, you can easily borrow a lump sum for any purpose - whether you plan a home renovation or wish to start a business.
Among the most remarkable aspects of this loan is its competitive interest rate, which makes it a great option for those looking for a personal loan at affordable rates. In this article, we will focus on this part and cover the HSBC personal loan interest rates and all the related factors.
HSBC Personal Loan Interest Rate
The HSBC personal loan fixed interest rate starts from a 7.24% annual percentage rate. It must be noted that the given interest rate is valid for Premier customers, who are working for an HSBC-listed company and who transfer their salaries to HSBC accounts. The actual rates vary as per your profile.
Features of HSBC Personal Loan in the UAE
Let’s have a look at the benefits that you can enjoy by availing of the HSBC personal loan -
Unsecured Personal Loan
- It is a fixed-rate loan in which you would need to pay your instalments on a monthly basis.
- You can opt for a top-up loan upon paying off your 12 months’ instalments successfully.
- The bank offers both secured and unsecured personal loans.
- Energy Efficient personal loan is also available to finance the purchase of solar panels for your home via an empanelled provider.
- You can take out your personal loan without credit life insurance.
- The bank offers flexible loan repayment tenure of 6-48 months. Individuals working in the General HQ of the UAE armed forces can pay off their loans within 60 months.
- Buy-out facility to HSBC from other banks is available.
- You also get the option to take two payment holidays per year.
Secured Personal Loan
- You can avail of a loan limit of up to 90% of the Term Deposit.
- It is a fixed-rate loan in which you would be required to pay your instalments on a monthly basis.
- You have a flexible repayment tenure of up to 36 months.
- The bank offers you a loan in the same currency as the Term Deposit.
- No early settlement fee or arrangement fee
- Credit life insurance is not required to take the loan.
Factors Affecting HSBC Personal Loan Interest Rates
Discussed below are the main factors that influence the interest rates of HSBC personal loans in the UAE-
1. Credit Score
A credit score is simply a numerical representation of your credit history that lenders use to evaluate the risk of giving you a loan. It is among the primary criteria for banks when processing a loan or credit card application.
If you have a higher credit score, the bank would be less prone to risks associated with loan repayment - this can result in a low interest rate for you. In case of a low credit score, on the other hand, you are more likely to be charged a high rate of interest.
2. Income
Your income has a direct impact on the interest rate you can expect to be offered. If you possess a high income, banks consider you as a less risky borrower and, hence, offer low interest rates. On the other hand, if you have a low income, you may be required to pay a higher rate due to the increased risk associated with the loan.
3. Loan Tenure
The length of your loan tenure also impacts the interest rate of your personal loan. Generally, the longer the tenure, the higher the interest rate for the lender, as there is more risk involved for a longer period of repayment. On the contrary, a shorter tenure, while resulting in a higher instalment amount, leads to lower interest rates as the lender can recover the loan amount more quickly.
4. Relationship with the Bank
Establishing and maintaining a good relationship with a bank can pay off when it comes to obtaining a personal loan. Banks value customers who demonstrate a reliable financial history and tend to offer them a lower interest rate on their loans. Thus, by managing your finances responsibly and having an existing account or credit with the bank, you can build a good rapport with it and may be able to negotiate a lower interest rate on your loans.
5. Debt-to-Income Ratio
Maintaining a low debt-to-income ratio is essential for getting a lower interest rate on a personal loan. This ratio is the percentage of income spent on debt payments, with a high debt-burden ratio, implying that your existing loans and debts take up a significant portion of your income.
If the debt-to-income ratio is high in your case, the bank may conclude that you won’t be able to easily pay off your personal loan amount. In such cases, banks typically increase the interest rate to offset the loan repayment risk. On the other hand, a low debt burden ratio indicates a good financial position, due to which lenders will offer a lower interest rate.
HSBC Personal Loan: Fees and Charges
Have a look at the table below for all the fees and charges related to the HSBC personal loan -
| Types of Fees | Charges |
|---|---|
| Annual Percentage Rate for New Loans and Top-Up Loans | 6.74% p.a. - 16.25% p.a. |
| Late Payment Charge | 2% (2.1% inclusive of VAT) of the delayed amount with a minimum of AED 50 (AED 52.5 inclusive of VAT) and a maximum of AED 140 (AED 147 inclusive of VAT) |
| Arrangement Fee (New Loans) | 1% (1.05% inclusive of VAT) of loan amount - at least AED 500 (AED 525 inclusive of VAT) and up to AED 2,500 (AED 2,625 inclusive of VAT) |
| Arrangement Fee (Top-up) | 1% (1.05% inclusive of VAT) of top-up amount with a minimum of AED 500 (AED 525 inclusive of VAT) and maximum AED 2,500 (AED 2,625 inclusive of VAT) |
| Early Settlement of Loan (Other Sources / End Of Service Benefit) | 1% (1.05% inclusive of VAT) of outstanding loan amount with a maximum of AED 10,000 (AED 10,500 inclusive of VAT), whichever is lower |
| Early Settlement from Other Bank Loans | 1% (1.05% inclusive of VAT) of outstanding loan amount with a maximum of AED 10,000 (AED 10,500 inclusive of VAT), whichever is lower |
| Loan Cancellation Fee | AED 100 (AED 105 inclusive of VAT) |
| Partial Payment of Loan | 1% (1.05% inclusive of VAT) of partial payment amount or max fee of AED 10,000 (AED 10,500 inclusive of VAT), whichever is lower |
| Loan Rescheduling Fee | AED 250 (AED 262.5 inclusive of VAT) |
| Liability Letter | AED 50 (AED 52.5 inclusive of VAT) |
| No Liability Letter | AED 50 (AED 52.5 inclusive of VAT) |
| Payment Holiday Administration Fee | AED 100 (AED 105 inclusive of VAT) for each Payment Holiday |
How to Calculate HSBC Personal Loan Monthly Instalment?
Before applying for a personal loan from HSBC UAE, you can use the bank’s online loan calculator to get an estimate of your monthly instalment amount. This calculator is free to use and is a great tool to plan your finances.
To access the calculator, simply visit the bank's official website and follow these instructions -
- Click on the ‘Borrowing’ drop-down menu on the HSBC website’s homepage.
- Choose ‘Personal Loan’.
- Scroll down and locate the calculator.
- As you provide your loan amount and loan tenure, the monthly instalment amount will be displayed on the right side of the screen.
Using this online personal loan calculator, you can make calculations easier and faster. Since the result is generated almost instantly, it saves time compared to manual calculations. Additionally, you can tweak the values and find the best option for yourself in terms of tenure, loan amount, and so on.
It is important to note that this calculator generates accurate results. However, the actual instalment amount may vary. This is because while the calculator uses a certain interest rate for calculations, this rate may vary for each applicant as per their profile, income, credit score, and more.
Let’s take a look at some of the most frequently asked questions related to HSBC personal loan interest rates.
FAQ's
Ans: Yes, the interest is estimated on the basis of a 365-day calendar year and accrues daily. The bank applies the interest rate regularly to your loan balance as it reduces every month.
Ans: No, salary transfer is optional when you apply for an HSBC personal loan. The eligibility requirements, however, vary depending on whether you opt for a salary transfer.
Ans: Yes, your personal loan interest rate will vary depending on whether you make a salary transfer.
Ans: Yes, you can opt for ‘Loan AsYouGo’ with GEMS education, which basically splits a loan into tranches as per the school tuition fees for each term.
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