Tax loan season has started! DBS seem to be the first out of the gate, offering monthly rate 0.08% (APR 1.78%) when borrowing HK$1.5m+. This is aligned with previous years. Any other deals out there at the moment?
These are perfect for expats who pocket a decent wage already and want to borrow at low HK rates to consolidate overseas debt and make repayments in HKD. Don't be a clueless expat as I was the first 5 years I was in Hong Kong, thinking a tax loan was for idiots who cannot afford to pay their taxes. These are in fact for the wealthy (typically including expats) to borrow money at ridiculously low rates.
Especially expats that have overseas investments etc. Eg if you have a mortgage back home paying 3%, 4%, 5%+ interest rates, now you can borrow at 1.78% in Hong Kong, send the money home and pay off a nice chunk of that higher rate debt.
You can even put your money in a HKD fixed deposit and earn 2.5% now. Borrow at 1.78% and earn 2.5%. It's ridiculous but true and better take this opportunity now before the banks realise what idiots they are and put a stop to this free cash giveaway craziness. Of course you need to be able to repay the loan while you money is locked in the fixed deposit, but you can take one for 6 months, one for 12 months etc to release your funds as the repayments are due. Also as I say for expats earning a decent wage who now are able to save a fair chunk of their salary each month, this loophole is absolutely perfect for you!
If you have a mortgage in HK, typical rates are 2.4% now. Borrow at 1.78% to repay a 2.4% HK mortgage. I have local mates that do this every year and they are the ones who tipped me off to this tax loan giveaway in the first place.
Really plenty of no brainer things you can do borrowing money at this low rate and making some small gains with it. Plenty of other more risky things you can do too! Buy HSBC shares that currently pay a 6.5% dividend, buy an overseas property outright somewhere like Malaysia, Thailand, etc.
The possibilities are endless and if you are living in HK earning a decent package and you ignore this opportunity you really are missing out.