What is Traditional Loan?

What is Traditional Loan?

25 Mar, 2021

Types of Personal Loans in Hong Kong

Personal Loan Companies may be here to help when you are unable to borrow money from friend or family relatives. There are 3 main reasons why HongKongers borrow small amount of loan: buying a car, paying tax and short-term cash flow, which leads to different loan products launched by different loan companies, including car loan, tax loan and revolving loan. If you are new to borrowing money at personal loan companies, you may be unfamiliar and confused to these loan products, and you may even ask questions like “Any differences with Personal Loan?”, “The loans are just about money!” Let me answer these questions in the following section.

What is Traditional Loan?

Every loan product has its features

What is Car Loan?

There are 2 ways for traditional car loans, including Leasing and Hire Purchase.

Leasing

You are required to settle first few instalments first, but its APR is usually lower that Hire Purchase’s. The number of total instalments + 1 will be the number of instalment you need to pay in the first stage. For example, you are required to pre-pay instalments in the first 4 months if the total instalment period is 3 years. As you are required to settle the first few instalments, leasing is more suitable for people with less financial difficulties.

Hire Purchase

You are not required to settle the first few instalments, but the APR is usually higher.
However, hire purchase is mostly only applicable for agencies or motors companies to apply, and customers are required to buy comprehensive car insurance plan. As the guarantee of the loan, Vehicle Registration Book will not be returned to the owner until the loan has been fully settled.

Every loan product has its features

However, there are some unexpected but unavoidable family expenses in the daily life, such as house reforms, which means the amount of money housewives can use is limited. After all, housewives have needs of borrowing money and fulfill their needs, such as paying off their credit cards bills, buying luxurious goods and making investments.

What is Tax Loan?

Tax Loan is only opened for application during tax season (from Oct-Nov to Apr in the coming year), targeting people with high income to borrow money and pay their taxes. In the usual cases, banks will launch the tax loan product on a limited offering basis. While applying for tax loan, you are asked not only providing official income-proof documents (indicating the high risk of unsuccessful application for applicants who get paid by cash or are self-employed), but also your tax demand note.

What is Revolving Loan?

Banks or Personal Loan Companies will provide credit limits for their loan borrowers, which allow loan borrowers draw down the loan at the ATM directly instead of visiting banks or loan companies.

In other words, Revolving loan is a loan product which allows loan borrowers pay loan interest based on the exact amount of loan the loan applicants used, which is similar to credit cards.

What is Revolving Loan?

What are the cons of traditional loan?

The terms and conditions of 3 Loan products mentioned above are actually very traditional, which explain why all people may not be applicable.

  • Car Loan: More restrictions applied and mostly need to work with motor agencies
  • Tax Loan: Shorter repayment period (usually 1-2 years)
  • Revolving Loan: More requirements for loan approval (e.g. better TU score)

Apart from that, these loan products are mostly introduced by the banks and traditional loan companies, meaning that borrowers are required to sign the loan agreements at the office. Such way may not be suitable in a society of speed and convenience.

Cashing Pro’s Personal Loan

Among the 3 loan products mentioned above, revolving loans may suit people with immediate cash needs better, but these loan products have more limitations, more documents required and stricter approval standards.

Cashing Pro’s Personal Loan

Cashing Pro’s Personal Loan service suits your needs perfectly and solve your financial needs. Apart from online loan application, loan documents submission and loan transfer, you can even repay your loan on a flexible basis (i.e. flexible loan repayments within 60 loan instalments. The more you repay this month, the less loan interest you need to pay in the next month). Your TU grade is only one of the factors for loan approval.

Loan interest is the most concerned factor when borrowing money, and Cashing Pro’s simple interest calculation allows you pay less loan interest when comparing other banks and personal loan companies. You are welcome to apply Cashing Pro’s Personal Loan for borrowing money.

Warning: You have to repay your loans. Don’t pay any intermediaries.

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