Tax Loan Strategy – Why should Loan during Tax Season? How to Choose the Best Tax Loan in HK?

Tax filing season is here again. Many banks and money lenders will launch low interest tax loans to help Hong Kong (HK) taxpayers to handle this additional expense, also known as "green bomb". It is always difficult to choose the best one as there are countless tax loan products in the market with different rewards and rebates. When comparing and choosing tax loans, should you pick the offers from banks or money lenders? This article will unlock the mystery of tax loan in HK, and show you several important tips that you should not miss.

What is tax loan?

Tax loan is a type of personal instalment loan. It is a tailor-made seasonal loan product during Hong Kong tax season (October to April of following year).

Tax loan strategy – The selling points of tax loan in HK

Tax loan in HK mainly targets salaryman who need to pay taxes and its original purpose is to reduce the financial burden of applicants by lending money to them for tax payments.

Tax season is like a special offer period in the loan industry, and one of the features of tax loan in HK is the lower interest rates in comparison with other personal loans. Therefore, tax loan is attractive not only to taxpayers, but also to the general public. This is why tax loan in HK is highly sought when being launched.

In order to stand out from competitors during tax season, some banks or money lenders may even launch tax loans featuring extremely low interest rate.

However, you should beware of the slogans like 'the lowest interest' or 'the best interest rate', as such advertised offer may only apply when applicants meet specific requirements. So, be smart when choosing tax loans. Also, as the main purpose of tax loan is to pay taxes, the loan amount of tax loan may be lower than other personal loans. You can look for different tax loan strategies to understand more about the characteristics of tax loans and gain the most benefits from tax loan or use them in the best way.

Tax loan strategy – Comparison of different tax loans

What criteria should be used for choosing the best tax loan in HK? You may take reference of below three criteria to choose the most suitable tax loan for yourself.

Tax loan comparison criteria (1): Take the interest rate as the key factor for comparison

When comparing different tax loans, most of us usually want to get the lowest interest rate. In fact, there are many prerequisites you need to meet in order to get a lower interest rate, such as borrowing for a higher loan amount or becoming a selected client. Thus, it may not be easy to get the lowest interest rate. All you need to do before applying loan is to compare the terms and conditions of each loan product and the APR offered by different companies. When comparing the tax loans, you should “shop around” before having decision.

Tax loan comparison criteria (2): Consider whether the repayment period is suitable for you?

Before applying a tax loan in HK, you should calculate the loan amount carefully and consider whether the repayment amount and period are suitable. When comparing different tax loans, it is important for you to check whether the repayment terms offered by different lending companies match with your repayment capability or not, in order to reduce the risk on personal financial situation.

Tax loan comparison criteria (3): Beware of any additional charges/fees

As some of the banks or money lenders may charge you different kinds of loan withdrawal handling fee or other administrative fees. Therefore, when comparing different tax loan products, you should be aware of any additional charges/fees, such as early redemption penalty etc, in order to avoid unnecessary expense.

Tax loan strategy – Bank vs money lenders

Many people who are applying tax loans may struggle between the offers from banks and money lenders. 3 main differences between banks and money lenders have been listed as follows for you to check out before applying tax loans:

Note 1: Approval time

As the demand of tax loan is relatively high during tax season, while banks are closed during bank holidays, the processing time may last for one week or more, those who have an urgent need for cash flow or paying tax by cash should be aware of the risk of processing time.

While various money lenders features express approval. Taking Promise as an example, Promise offers online instant preliminary approval, funds will be transferred instantly with FPS once your personal loan is approved^{^}. When comparing with banks, you may receive funds earlier.

Note 2: Supporting Documents

Tax loan application at banks may be more complicated, you may be required to provide different kinds of supporting documents like pay slip, tax bill, bank statement as income proofs when applying tax loan or other personal loans at banks. The tax loan application may be rejected if applicants fail to submit all the required supporting documents. Therefore, applicants may consider to prepare related documents before application to reduce the risk of the loan application being rejected.

On the other hand, if you are going to apply personal loan, which is also available during tax season at money lenders, taking Promise as an example, no supporting documents are required and you may apply with just your ID card and mobile number^#.

Note 3: Repayment period

As tax loan is a low-interest loan product, the repayment period offered by banks may mainly vary from 12 to 24 months only.

While money lenders may offer a more flexible repayment plan. For example, Promise offers repayment period varies from 3 to 84 months, allowing you to select the most suitable repayment plan.

Tax loan strategy – Promise's low-interest personal loan

Based on the results of above tax loan strategy comparison, money lenders may offer personal loans with more flexible repayment plan. The application process and supporting documents submission are simpler too. Applicants may be able to obtain the approval results in a shorter period of time to meet your urgent need for cash flow.

How to Apply Tax Loan at Promise?

Promise's low-interest personal loan is popular during tax season, because of its flexible repayment period up to 84 months and it's simple loan application process. Applicants can apply loan through Promise website by completing the online loan application form and uploading ID card and other required documents. Applicants can then receive online instant preliminary loan approval result^⦿ without show up in person for loan application^*. Once the personal loan is approved, funds will be transferred instantly with FPS^{^} in order to meet your urgent need for cash flow.

The most important is that Promise offers personal loans with APR as low as 1.12% and flexible repayment period. The interest of Promise’s personal loan is calculated on daily basis. If you want to settle your loan earlier, no additional charge for early settlement is required. You can use Promise's Personal Loan & Interest Calculator to calculate the repayment amount and repayment period for reference before applying loans, in order to establish a repayment plan for yourself easily.

In conclusion, applying tax loan for extra cash flow not only helps you to pay your tax bill, but also helps you to alleviate your financial burdens and have a better financial planning. As there are different kinds of tax loan offers, being a smart borrower, you should compare the offers provided by different financial companies in order to get the best deal for yourself.