Best Balance Transfer Loans 2018
If you have an unmanageable credit card balance, you may want to consider a balance transfer loan to save money as you repay your credit card debt. Below, we compare the best balance transfer offerings we've found in Singapore to help you choose the best option to manage your debt.
Best Balance Transfer Loan: Standard Chartered Funds Transfer
If you are looking for a balance between a decent length of interest free period and a low processing fee, then Standard Chartered's Funds Transfer product might be a good fit for you. It only charges a processing fee of 1.99%, compared to 2-2.5% being charged by its competitors. With this, you get 6 months of interest-free period that you can use to pay down your credit card balance. It can be used to pay down your personal loan balance as well. Standard Chartered's credit card balance transfer also comes with a 1% monthly repayment requirement, which is the lowest in the market. However, you should remember that you will incur 28% of annual interest after your 6th month; therefore, you should really try to pay much more than the monthly repayment requirement so that you can get rid of your debt while you are not incurring a high level of interest.
Best Long-Term Interest Free Period Balance Transfer Loan: UOB Balance Transfer
In our view, UOB's Balance Transfer product is the best for those who need a long interest-free period to repay their loans. For people who sign up for this product online, UOB is offering a special 3.88% processing fee for 12-months of interest free period, compared to +4.5% being charged by other banks. UOB is also the only bank in Singapore that offers an 18-months interest free period for a processing fee of 4.88%. You can get a credit card or a CashPlus balance transfer loan, which only differ in terms of their monthly minimum payment requirement. This shouldn't be too much of a factor for people who are looking for ways to pay down their debt in full as soon as possible. When your interest free period is over, you will begin to incur 26% of annual interest on your remaining balance, so you should be paying down this balance as much as possible every month, instead of paying just the minimum requirement.
Best Short-Term Interest Free Period Balance Transfer Loan: UOB Balance Transfer
If you have only a small amount of unpaid credit card balance that you can pay down within 3 months, then UOB's Balance Transfer is likely the best option for you. For an interest free period of 3 months, UOB's balance transfer only charges a processing fee of 1.49%, the lowest we've seen in the market. In comparison, other banks generally charge 1.58% to to 1.8% for the same length of interest free period. As we mentioned above, it is critical that you pay down all if not most of your balance within the designated interest free period. This is because your remaining balance will incur interest of 26% after your 3rd month, which can balloon into a considerable amount before you know it. Therefore, this product is ideal for small balance transfers that you can manage to repay quickly.
If you can't use the options above because your balance is already with them, here are some other options that might be worth considering. However, these banks below only offer good deals for new customers, so they may not be an ideal option for those who have had an account with them in the past 12-18 months.
Citibank Balance Transfer
If you have not had a banking relationship with Citibank in the past 12 months, then Citibank's Balance Transfer product is also a superb option for 6-months interest free balance transfer. As long as you are a new customer to Citi, you can enjoy 6 months of zero interest on your balance transfer for paying only 1.58% of service fee, which is even lower than Standard Chartered's. However, this rate can actually increase to 2.5% if you've had a banking relationship with Citi in the past 12 months. Citi's credit card balance transfer also provides the market leading 1% monthly repayment requirement. As always, please make sure to redeem as much of your balance as possible since you will incur 26% of annual interest after your 6th month.
OCBC Balance Transfer
In our view, OCBC's Balance Transfer product is also the best 12-month interest free offer in the market, but only for new OCBC customers. For people who have not banked with OCBC before, OCBC is offering a special 3.88% processing fee, much lower than +4.5% being charged by other banks. If you are not new to OCBC, however, they charge a processing fee of 4.28%, which is not the best rate you can get. Its minimum monthly repayment is 3% of total outstanding (or S$50, whichever is higher), though this shouldn't be too much of a factor since you should try to pay down your debt in full as soon as possible. If you don't, you will start to incur 26% of annual interest on your remaining balance, which can cost you a lot of money depending on how much balance you have left.
Summary Table of Best Balance Transfer Offers in Singapore
In case you want a quick look at our picks, here are ValuePenguin's best balance transfers for 2018.
|Processing Fee by Interest Rate Free Period||3-months||6-months||12-months||18-months||Minimum Monthly Repayment|
|Standard Chartered Funds Transfer||1.99%||4.5%||1%|
|UOB CashPlus Balance Transfer||1.49%||2.5%||3.88%||2.5%|
|UOB Credit Card Balance Transfer||1.49%||2.5%||3.88%||3.0%|
|OCBC Balance Transfer (new customers)||1.8%||2.5%||3.88%||3.0% (or S$50, whichever is higher)|
|OCBC Balance Transfer (existing customers)||1.8%||2.5%||4.5%||3.0% (or S$50, whichever is higher)|
|Citibank Credit Card Balance Transfer||1.58%||1.58%||5.5%||1%|
|Citibank Ready Credit Balance Transfer||1.58%||1.58%||5.5%||3%|
|DBS/POSB Balance Transfer Cashline||2.5%||4.5%||2.5%|
|DBS/POSB Balance Transfer Credit Card||2.5%||4.5%||3%|
|Maybank Fund Transfer||1.88% if >S$10,000, 2.5% if <S$10,000||2.5% + 4.99% of interest||3%|
|HSBC Credit Cards Balance Transfer||S$88 waived if >S$10,000 + 2.5% of interest||S$88 waived if >S$10,000 + 4.88% of interest||3%|
|HSBC Personal Line of Credit Balance Transfer||S$88 waived if >S$10,000 + 3.2% of interest||S$88 waived if >S$10,000 + 4.88% of interest||3%|
Visual Comparison of Effective Interest Rates of Balance Transfer Loans
For interested readers, below is a graphic illustration of effective interest rates of each balance transfer loan available in Singapore, organized by tenure of loans. These are calculated by assuming you only make the monthly minimum repayment requirement each month of your loan, and repaying the whole remaining balance in the last month of your interest free period.