Nope, this time the processing fee is only 1.5% with 6 months 0% interest rate.
The minimum amount to borrow is $10,000. The website is here: http://www.uobgroup.com/pages/promotions/promo_cashplus_funds.html
(According to my mailer, the promotion ends 15 July, not June 30 stated on the website.)
A quick calculation shows that the annualized interest rate is roughly 3.4%, 2% higher than SIBOR.
This is certainly enticing to me!
The interest accrued is actually $150 upfront. If you have read my stretch your dollar series here, I have planned to use $1000 to pay my starhub bills in advance, together with my usual definite expenses. In this way, I can get a 10% rebate of $100. Now, even if I just leave $9000 in the fundsupermart cash fund for 6 months, at a conservative yield of 1% PA, I can get back $45 after 6 months. Which means the cost of borrowing is only $5 for 6 months!
Of course I still have to pay back a minimum sum of 3% (roughly $300) per month for 6 months before the 18% PA interest rate is reverted. Hence the borrowing cost is at most $10 for 6 months.
What’s the plan now?
I am actually planning to use the $10,000 this manner:
1) $1,000 for advance payments to obtain cashback of 10%
2) Invest $9,000 into Singpost before XD. In this way, by December 2008, the total dividends I have collected will be 5 cents per share, yielding roughly $450.
My total gain will be $550. After interest deduction of $150, my yield will be $400. By December I will be able to repay the remaining amount of $8200 (estimated) as my year end bonus is usually above $10,000.
In a way, I see it as advancing my year end bonus to invest into Singpost business now.
However, my current credit limit is only $8000, based on my payslip 2 years ago. Hence I need to send them a written mail and latest payslip to “upsize” my credit limit.
I hope they can increase my credit limit to $10,000 in time or else I will not take up the fund transfer promotion at any higher rates.
If I get lucky, I can win an Audi R8 too! Though I will definitely put up for sale to buy more Singapore Blue Chips!