In Hong Kong, the 2023 tax season is here, and as expected, banks are once again engaged in a fierce annual competition to promote their tax loans. They use attention-grabbing phrases like "no interest," "low-interest rate for the first few months," or "cash rebate" as marketing tactics. It may seem like the banks are offering free credit, which sounds too good to be true. That's why we wrote this blog post about how to choose a tax loan plan in Hong Kong. Read on to find out more!
How to choose a tax loan plan in Hong Kong?
Before you applying for your tax loan plan? As we will explore below, you had better consider a few things before selecting the best plan.
Do a comparison using the APR
The banks offer a variety of attractive options when it comes to promotions. You have to spend lots of time calculating the actual amount you’re going to pay because the devil is in the details. The interest rate is not the only standard to distinguish whether a tax loan plan is good enough. There might be hidden costs like administrative fees, service charges, etc. They are not reflected in the interest rates.
Luckily, you can simply compare the actual expense of a loan by using the annual percentage rate (APR), which includes all related interests, administration fees, and service charges. One thing to note, though – the APR excludes overdue repayment and the service charge of early repayment (you will avoid this if you pay on time).
Be aware of terms and conditions
Some tax loan plans may appear very appealing due to their extremely low interest rates. However, it is important to remember that there is no such thing as a free lunch. These promotions often come with certain credit conditions. For instance, applicants must be privileged customers of the bank, which requires setting up an account and depositing a certain amount of money. Alternatively, the bank may specify a minimum loan limit, such as $500,000, in order to qualify for a lower rate discount. Plus, banks typically set the maximum credit limit at 10-12 times an individual's monthly income.
If you do not meet the minimum income requirement, you will not be eligible for the related discount. So, be aware of terms and conditions.
Tax loan promotions for first/online application
Many banks offer special promotions or online application promotions for first-time applicants. It's important to pay attention to the small amounts because they can add up to significant savings. Don't forget to consider them when choosing your tax loan plan!
每月還款額
HK$8,397
Monthly Payment
HK$12,710
- APR*
- 1.56%
- Total Amount Payable
- HK$305,040
- Total Interest Payable
- HK$5,040
- Monthly Payment
- HK$12,710
⚡ 【October Tax Loan Upgrade: Total Rewards Up to HK$22,199 — Get HK$800 Cash / Apple Store Gift Card + Up to HK$18,399 Drawdown Rewards + HK$3,000 Citi Drawdown Reward!】
October tax season rewards are upgraded! From 19 October to 31 October 2026, customers who successfully apply for and draw down a Citi Speedy Cash / Citi Tax Season Loan / Citi Card Debt Consolidation Loan via MoneySmart can enjoy an annualised interest rate as low as 1.56%, with total rewards worth up to HK$22,199!
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Simply submit all required loan documents, apply for a loan amount of HK$200,000 or above with a repayment tenor of 12 months or above, and choose either HK$800 Cash Reward or HK$800 Apple Store Gift Card.
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✨ 【Limited-Time Drawdown Reward Upgrade】
New customers who successfully apply during the promotion period and draw down designated amount on or before 30 November 2026 can choose HK$17,300 Apple Store Gift Card / ParknShop e-Vouchers / HKTVmall e-Vouchers / Cash, or designated gifts worth up to HK$9,999, including Dyson new products or a 360° drone; customers who successfully apply for a loan amount of HK$500,000 or above and draw down on or before 30 November 2026 can also receive an extra Apple AirPods 5 (Value: HK$1,099), bringing the rewards to the next level!
Shorten repayment period
Banks typically offer a repayment period of 6 - 24 months, which is shorter than that of most personal loan companies. Extending the loan repayment can help to alleviate stress. However, it's important to note that the longer the repayment period, the higher the actual interest expense will be. In general, it is not recommended to choose plans that require more than a 12-month repayment period.
Related articles
Want to learn more about tax loans? Check out our other articles:
Tax Payment 101 - What is a Tax Loan? How to Choose a Tax Loan Plan in HK?
Best Tax Loan Plans in Hong Kong 2023
Should I apply for a tax loan?
Borrow not only if you can repay, but also when you have the definite purpose! Curious about getting a tax loan? Compare tax loan rates at MoneySmart.hk.
