Hoolah, Rely & other credit card instalment plans to ease your payment pains

Been eyeing that new iPhone 12 or Secret Lab chair, but afraid to dip into your savings in these dark economic times?

We always advocate making smart financial decisions and spending within your means.

But if you’re sure that you can afford that big ticket item, you might want to consider a 0 per cent interest instalment plan to avoid having to pay a large amount upfront. That way, you can free up cash for urgent use.

Note that although they all claim to be 0per cent interest, there may be costs such as processing fees.

Hoolah vs Rely vs Atome vs credit card instalment plans

How do 0 per cent interest instalment plans work?

The two main types of instalment plans in Singapore are those offered by companies similar to tech start-ups, and those offered by banks to their cardholders.

The first type of plan (including those by Hoolah, Rely and Atome) typically does not charge interest or processing fees. You can, however, only use these plans when shopping at partner merchants. They make money by charging their partner merchants transaction fees, rather than customers.

The second type, offered by banks to their cardholders, can usually be used for all purchases. These plans mostly advertise themselves as interest-free but actually charge one-time processing fees equivalent to a percentage of your transaction.

They also charge an early payment fee if you try to pay up earlier or cancel the credit card with which you paid.

1. Hoolah

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Hoolah lets you split your payment into 3 instalments, payable every month. It charges 0per cent interest and no processing fees, which means that the service is absolutely free.

When you buy stuff online from Hoolah partner merchants, you will have the option to select “Hoolah” as your payment method upon checkout. You can then pay using a credit or debit card.

Your payments will automatically be divided into three instalments, so you’ll pay only 1/3 of the bill that day. Your second payment will be due in a month’s time, and the third payment the month after that. Both of these subsequent payments will be automatically charged to your card.

Since Hoolah is essentially free to use, it’s an option for those who do not have immediate cash on hand, such as students aged 18 years and above who may not yet qualify for credit cards.

Hoolah’s partner merchants include:

• Hipvan
• Apol
• Skin Inc
• Sennheiser
• Braun
• Kenwood
• Melissa
• Ukulele Movement

2. Rely

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Rely has two types of instalment plans to choose from. The first, Rely PayLater, splits your bill into four payments, payable every 2 weeks. The second, Rely Instalment, divides your bill into three instalments, payable every month.

These instalment plans charge no interest or fees, and can be linked to your credit card or debit card of choice.

In order to use Rely, you have to purchase from one of their partner merchants, and select “Rely” as your payment method upon checkout. You then enter your credit or debit card details and be automatically charged for your first instalment payment.

Rely’s partner merchants include:

• Qoo10
• SecretLab
• Omnidesk
• SGShop
• SK Jewellery
• Fishtail Cyclery
• Bettr Barista
• SYS Moon Mobile
• Dental shield

3. Atome

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Atome is yet another reiteration of the free-interest payment model used by Hoolah and Rely.

You can use Atome for online or in-store shopping. To use Atome in-store, scan a QR code using its mobile app and then place your order with your mobile phone.

Select Atome as your payment method, input your credit or debit card details and your payments will be automatically split into three instalments spaced 30 days apart.

Atome’s partner merchants includes:

• Pretty Fit
• Hush Puppies
• Kimage Salon
• Techanic
• IUIGA
• Baby Tula
• Mighty Velo

4. DBS Payment Plans

DBS offers payment plans that let you pay for any purchase of $100 and above over a period of 3, 6, 12, 18 or 24 months.

Right now, thanks to an ongoing promotion, you pay 0per cent interest and no processing fee for instalment plans of up to 6 months (the usual processing fee for such plans is 3per cent of the transaction fee).

For all plans above 6 months, you have to pay a one-time processing fee calculated on your transaction amount:

• 12 months – 5 per cent (effective interest rate of 9.5 per cent p.a.)
• 18 months – 6 per cent (effective interest rate of 7.86 per cent p.a.)
• 24 months – 6 per cent (effective interest rate of 5.98 per cent p.a.)

To sign up for the DBS Payment Plan, you pay for your purchase first and then apply for the DBS Payment via Internet banking.

You can also automatically sign up for DBS Payment Plan at the point of purchase when you shop at partner merchants. Simply ask the cashier at participating stores, or select DBS Payment Plan upon checkout before paying with your DBS or POSB credit card.

DBS Payment Plan’s partner merchants include:

• Cycle & Carriage
• Fitness First
• Jean Yip
• Cristofori Music
• Courts
• Reebonz
• Ikea
• M1 Shop

You can also use DBS Payment Plan to pay your income tax bill over 12 months at 0per cent interest. You will be charged a processing fee of 2.5per cent for 12 months.

5. OCBC PayLite

OCBC credit cardholders can opt to pay for purchases worth $100 and above in instalments of 3, 6 or 12 months.

You can use OCBC PayLite to pay for purchases at any local, overseas or online merchant. You first pay using your OCBC credit card, and then apply online for PayLite at least 7 working days before your credit card bill repayment is due. You’ll be charged the processing fee upon approval of your application.

While technically interest-free, you will be charged a one-time processing fee calculated as a percentage of your transaction:

• 3 months – 3 per cent (effective interest rate of 18.18 per cent p.a.)
• 6 months – 3 per cent (effective interest rate of 10.43 per cent p.a.)
• 12 months – 5 per cent (effective interest rate of 9.50 per cent p.a.)

While the 12-month instalment plan has the lowest effective interest rate, the total amount of interest you pay will actually be higher (5per cent of your transaction amount). So, opt for the 3-or 6-month loan if you can pay up within that period of time. 

Thanks to a current promotion till 31 October 2020, you can get up to $20 cashback when you apply for OCBC PayLite online.

6. Standard Chartered EasyPay

Standard Chartered’s EasyPay instalment plan enables you to pay for purchases of at least $500 over a period of 6 to 12 months. Any transaction, whether local, overseas or online, qualifies.

While your instalments are technically interest-free, you pay a one-time service fee. This service can vary according to your bill. But for a $3,000 bill, you can expect it to be around 5per cent for both 6- and 12-month loans.

After paying for your purchase with your Stanchart credit card, submit an EasyPay request via online banking or phone banking.

Stanchart’s fee for early repayment or termination of your account is $50.

7. UOB SmartPay

UOB SmartPay offers 3-, 6- and 12-month instalment plans for any purchase of at least $500 charged on a UOB credit card.

While these plans are technically interest-free, you’ll be charged a processing fee as follows:

• 3 months: 3 per cent (effective interest rate of 18.18 per cent p.a.)
• 6 months: 3 per cent (effective interest rate of 10.43 per cent p.a.)
• 12 months: 5 per cent (effective interest rate of 9.50 per cent p.a.)

To use SmartPay, make your purchase first and then apply within 14 days of your credit card statement via Internet banking, SMS, phone or an online application form on the website.

This article was first published in MoneySmart.