Asked by Kaki
Hi, which loan is better. Hdb loan or bank loan? What is the pros and cons?
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1 Answer
Hi Kaki,
1) Based on interest rates alone, HDB loan (at 2.6%) vs Bank loan (can be as low as 1%), taking a bank loan is definitely better.
2) However, in the long run, bank interest rates will defintely go up, whereas HDB loan rate (which is pegged 0.1% higher than CPF OA interest rate), will probably remain low and stable.
3) Also, in the scenario of monthly instalment defauly, HDB will be more compassionate, whereas bank being commercial entity will go by the book since it is profit driven.
4) For bank loan, need 5% cash + 15% cash/CPF as downpayment if you are able to take the max 80% loan. For HDB loan, the max is 90% and if you have enough money in CPF OA, the cash required will be minimum.
The rule of thumb is if you are eligible to take HDB loan, should go ahead and take it. But there are many people choosing bank loan instead to take advantage of the low interest rates. You need to weigh the pros and cons and decide for yourself.
Please call me at 98628691 for further discussion.
Thanks.
Ander Ang
DTZ Read More
1) Based on interest rates alone, HDB loan (at 2.6%) vs Bank loan (can be as low as 1%), taking a bank loan is definitely better.
2) However, in the long run, bank interest rates will defintely go up, whereas HDB loan rate (which is pegged 0.1% higher than CPF OA interest rate), will probably remain low and stable.
3) Also, in the scenario of monthly instalment defauly, HDB will be more compassionate, whereas bank being commercial entity will go by the book since it is profit driven.
4) For bank loan, need 5% cash + 15% cash/CPF as downpayment if you are able to take the max 80% loan. For HDB loan, the max is 90% and if you have enough money in CPF OA, the cash required will be minimum.
The rule of thumb is if you are eligible to take HDB loan, should go ahead and take it. But there are many people choosing bank loan instead to take advantage of the low interest rates. You need to weigh the pros and cons and decide for yourself.
Please call me at 98628691 for further discussion.
Thanks.
Ander Ang
DTZ Read More
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