★ Question: What is Bi-weekly Pay?
Answer: "Bi-weekly Pay" is a loan repayment method for customers with medium and long-term personal housing mortgages to make principal and interest payments on a bi-weekly basis. Bi-weekly Pay comes in two methods: the Interest Saving Method and the Pressure Relieving Method. The main difference between the two methods lies in whether the tenure of the loan is shortened or not.
"Interest Saving" Bi-weekly Pay can increase the frequency of repayments and shorten the loan term at the same time; "Pressure Relieving" Bi-weekly Pay only changes the repayment frequency from once a month to once every two weeks and the loan term remains unchanged.
★ Question: What are the benefits of "Pressure Relieving" Bi-weekly Pay?
Answer: Since "Pressure Relieving" Bi-weekly Pay accelerates the loan repayment frequency without changing the loan term the monthly payments (total payments of two installments) can be reduced compared with the once-a-month repayment method. It can alleviate the burden of loan repayments borne by customers.
★ Question: What are the benefits of "Interest Saving" Bi-weekly Pay?
Answer: "Interest Saving" Bi-weekly Pay reduces the occupation of bank loan funds by accelerating the repayment frequency and shortening the loan tenure. In this way, savings can be made on interest payments and the loan can be paid off in advance.
★ Question: How should customers choose between "Pressure Relieving" Bi-weekly Pay and "Interest Saving" Bi-weekly Pay?
Answer: Customers sensitive to the monthly burden of repayments are ideal beneficiaries of the "Pressure Relieving" Bi-weekly Pay method because it can reduce the burden of monthly repayments. Such customers include white collar workers just starting their careers, people planning to get married, people whose children are studying and other customers.
The "Interest Saving" Bi-weekly Pay method is suitable for customers with stable incomes and a strong ability to implement financial plans. This method can generate maximum savings on interest payments.
"Pressure Relieving" Bi-weekly Pay and "Interest Saving" Bi-weekly Pay are two different schemes for relieving the burden of loan repayments. Customers may select the method that suits them better according to their own career development and financial situation.
★ Question: How does "Interest Saving" Bi-weekly Pay save interest and shorten loan tenure?
Answer: On the one hand, "Interest Saving" Bi-weekly Pay accelerates the repayment frequency, which means that the percentage of principal repaid in each bi-weekly payment increases compared with that of monthly repayment while the percentage of interest to be paid decreases. This means that you can pay back the loan principal faster. The result is that interest payments can be significantly decreased and the tenure of the loan can be shortened.
On the other hand, with the exception of February, which has 28 or 29 days, all other months in the year are 30 or 31 days long. This means that there are either two or more repayments in a month in the "Interest Saving" Bi-weekly Pay method. Therefore, considering that there are 52 weeks in a year, there are 26 repayments in a year rather than 24 repayments when one month is considered as being equal to 4 weeks.
★ Question: Will the burden of monthly repayments increases with the higher frequency of repayments?
Answer: Whether a borrower chooses "Pressure Relieving" Bi-weekly Pay or "Interest Saving" Bi-weekly Pay, the total amount of two bi-weekly payments will not exceed the total amount of a standard monthly repayment. Even in cases where there will be two months in a year when 3 repayments will need to be made owing to the fact that there are 26 repayments per year, borrowers with steady capital flow shall not notice any obvious extra burden.
★ Question: What loan varieties is Bi-weekly Pay applicable to?
Answer: Bi-weekly Pay is applicable to IB customers with newly and previously granted medium and long-term personal mortgages, including personal new housing loans, personal pre-owned housing loans, personal new commercial property loans, personal pre-owned commercial property loans and personal residential and commercial property loans. Medium and long-term loans refer to loans with a tenure of more than one year.
★ Question: Are there any restrictions on who can apply for Bi-weekly Pay?
Answer: IB new or previous customers that satisfy certain credit conditions will be able to apply for Bi-weekly Pay. Provided that the IB branch concerned allows mortgage refinancing without a transaction. Clients that have taken out a personal mortgage from another bank may transfer their loan to IB and adopt the Bi-weekly Pay method of repayment.
★ Question: Are the application procedures of Bi-weekly Pay complicated?
Answer: The application and approval process is quick and easy. New customers can select Bi-weekly Pay as their method of repayment when signing the loan agreement. Existing customers can simply put in a request to change the original method of repayment to Bi-weekly Pay.
★ Question: What if a customer forgets to make a repayment on time once the frequency of repayments has been increased?
There is no need to worry. IB will send you SMS reminders before each repayment is due to inform you of the time and sum of repayment. Our considerate services will set your mind at ease.
Bi-weekly Pay customers will no longer be entitled to enjoy the grace period for repayment provided by IB. Therefore, customers should ensure that there is sufficient balance in the repayment account so as to avoid unnecessary defaults that may affect your credit history.
(The above information is for reference only and specific handling requirements are subject to the provisions of local IB branches. Please consult your local IB outlet for details before going through relevant application procedures.)