HSBC Personal Tax Loan

Annual fee

Not applicable

Handling charge

Subject to promotional offer

Early redemption penalty

2% of outstanding principal amount plus repayment of any applicable promotional offers

Deferred payment

For 1st repayment: 2.25% per month on approved loan amount, calculated on daily basis

Late charge

2.25% per month calculated on daily basis for amounts in arrears, plus HKD400 on each instalment due to insufficient funds

Unauthorised overdraft handling charge

Not applicable

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That depends on two key factors: how much you need to borrow, and how much you can afford to repay.

It's best to borrow only what you actually need and resist the temptation of borrowing extra money. Remember, your loan does not have to be for a round figure! You can usually borrow the exact amount you need.

It's also wise to look at all your other expenses while working out how much you can afford to repay. Try not to spend more than 30% of your gross monthly income on all your loan repayments, with the possible exception of mortgage repayments which may be up to 50% of your income. That way, you can better ensure that you can afford the extra cost of loan repayments without worrying that you can't meet other financial commitments.

A good general rule is to avoid borrowing for longer than the life of what you're paying for. For example, if you have an annual expense such as a tax bill, aim for a loan of 12 months of less. Otherwise, you'll still be paying off your first loan when the next year's tax demand arrives.

By budgeting carefully, you can balance the loan amount, loan period, and amount you can afford to repay each month.