Lendela review: a detailed look at Trust Bank instant loan

Supported by Standard Chartered and FairPrice Group, Trust Bank is a fully digital bank with full banking functions and licences in Singapore. In this review, we’ll break down the features of their hot new Instant Loan, how it stacks up with other personal loans in Singapore, and potential considerations for borrowers looking to capitalise on some of its unique features. (Updated in July 2024)

What is Trust Bank’s Instant Loan application process like?

Similar to the GXS FlexiLoan, Trust Bank’s Instant Loan application and approval process can be completed entirely through the Trust app.

Borrowers should satisfy the following requirements:

• Aged between 21 and 65 years old;

• annual income of at least $30,000 (Singapore citizens or Permanent Residents) or $60,000 for foreigners with a valid work pass;

• existing customers must have held a Trust credit card for a minimum of six months, with sufficient available credit limit; and

• new customers need to first apply for a Trust credit card, which generally takes less than three minutes.

Key features of Instant Loan

Flexibility

From loan amount and tenure to repayment options, Trust Bank’s Instant Loan is one of the most flexible personal loans out there. Borrowers will be able to choose loan tenures ranging from three to 60 months and a minimum loan amount of only $500 up to one’s credit limit, with a promotional 2.79% rate (EIR 5.27% p.a.). This makes Trust Bank’s Instant Loan a suitable ‘standby’ option for small to medium cash needs, similar to a line of credit and the GXS FlexiLoan.

Fully digital

You can apply digitally through the Trust app, where you have the option to select and view the finalised loan amount, tenure, instalment details, and important dates. As you would already have had a credit facility with Trust Bank on the credit card, in most cases, approved loans will be deposited into your Trust savings account within 60 seconds.

Fee-free

One of the features that sets Trust Bank’s Instant Loan apart is that it has no processing fees or hidden charges. The only fee is the late interest charge of 18% per annum, which is the same as the GXS FlexiLoan’s and lower than most credit cards’ late fees, but much higher than the 4% average late fee on personal loans.

Early repayment 

If you choose to repay your Instant Loan in full before the end of your loan tenure, an early termination fee of 3% will apply. One thing to note is that early repayments can only be done in full — no partial early repayment is allowed. The loan’s simple interest structure also means that interest does not compound, and the daily interest charge remains the same, based on the principal amount of the loan.

Key considerations for borrowers

Advertised rates are not personalised rates

It’s important to recognise that the advertised rates you see from most loan providers are not personalised. Statistically, very few people will qualify for the “from” rates after applying, and Trust Bank’s Instant Loan is no different.

This is why it’s crucial for borrowers to always seek out their personalised rates, and one of the quickest ways to access multiple personalised rates is through Lendela. Our platform automatically matches your borrower profile with your personalised rates from over 40 banks and loan providers, with just one online application.

The risks of easy drawdowns and lines of credit

While the flexibility and convenience that comes with being able to draw down funds whenever the need arises will be welcomed by many borrowers, it's important to be mindful of your loan affordability to avoid financial strain.

High usage of a credit line may also negatively impact your credit score since the credit utilisation ratio — the amount of credit used compared to your total credit limit — is a significant factor in credit scoring. All transactions including drawdowns are reported to the credit bureau, and high usage may adversely affect your credit score​​.

In this case, the typical personal loan with fixed repayment schedules and interest rates does not come with these drawbacks, and while applying across multiple banks and providers to compare your real rates also hurts your credit score, using a loan matching platform like Lendela will help you avoid that.

Longer term credit needs 

Today, about one in three borrowers in Singapore take out a personal loan for big-ticket purchases such as a business expansion, car, education, home-related expenses, medical bills, home renovation, and wedding costs (data from Lendela). Over a third of borrowers also have long term or large credit needs, such as debt consolidation.

For them, options with fixed repayments across a longer tenure will make more financial sense since interest will be spread out over a longer period of time, as opposed to the Instant Loan’s simple interest structure that is charged daily on the full amount borrowed.

No incentive to repay early 

With compounding interest, repaying a loan early can significantly reduce interest costs. In a non-compounding loan, the benefit of early repayment diminishes, potentially reducing the incentive for you to pay off your debt sooner.

Have you considered the Effective Interest Rate (EIR)? 

Finally, as with all loans, the two most important numbers to note when considering the cost of a loan are the Annual Percentage Rate (APR) and the Effective Interest Rate (EIR). The EIR is the total cost of a loan shown as a percentage of the amount borrowed. Unlike the APR, EIR takes into account the impact of compounding interest. In other words, it tells you what you’ll actually have paid at the end of the loan tenure.

For a full rundown of the EIR, read this.

Always explore all loan options available to you

Without knowing all the loan options available to you, it’s impossible to make an informed decision. While most borrowers recognise that comparing personal loan rates is an effective way to find their most competitive offer, advertised loan rates are not personalised.

This leads most borrowers to apply across multiple banks and providers to compare their real rates, unknowingly hurting their credit scores since each loan application leaves a record on your credit report, sending a signal to banks that you might be a “financial risk”.

This is why instead of simply comparing rates, using a loan matching platform such as Lendela is the safer and quicker way to find your ideal loan, always. By bringing the most competitive personalised rates to you, Lendela makes it cheaper, faster, and safer for you to borrow.

Disclaimer: Lendela remains committed to neutrality and transparency in our reviews and loan products to aid in your decision-making process. This review is solely based on our research and evaluation. For more detailed inquiries or specific questions about Trust Bank’s Instant Loan, we encourage you to contact the credit provider directly.