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Nia

Nia

17 May 2019

Property

Is it possible to make full payment of renovation cost and use DBS preferred payment plan to pay it via 0% installment for 12 mths?

Hi everyone, i will be renovating my parent's kitchen and flooring soon which would amt to ard 15k. I have the lump sum to pay it all one shot as i hate having to pay interest on loans. But i saw thag dbs has this 0% interest preferred payment where i can pay for 12 mths at 0% interest. Do you think this is a feasible plan?

Discussion (1)

What are your thoughts?

Hi there! Great question about the DBS My Preferred Payment Plan (MP3). I was curious to learn more about it too so I did some research and got to the following findings:

TL;DR: The DBS MP3 Is Perfect...

If you are someone who:

  1. Have other important plans for your personal lump sum of S$15,000 during the 12 months duration;
  2. Don’t mind the fact that you will not be earning any DBS points and rebates from the plan;
  3. Don’t mind a plan that levies administrative charges should you wish to have greater flexibility over your account and plan’s tenure and repayment duration,

Then you should consider the DBS MP3 for your S$15,000 renovation loan.

Now getting into greater details, here are the requirements about DBS MP3:

  • This 0% interest rate promotion ends this year, 31 Dec 2019
  • The promotion is only applicable for customers with a personal main credit card under DBS.
  • The promotion can only be applied for unbilled retail transactions and retail transactions charged to your DBS/POSB credit card as reflected in your latest statement. Therefore, using this plan for your home renovation expenses would work.
  • A minimum amount of S$100 is required for a single transaction. Additionally, 10 transactions are the maximum allowed per MP3 application. In your case, if your S$15,000 renovation bill is paid for in a single transaction, you’re good to go.
  • Instructions for the plan can only be given by the principal cardholder. Hence, only you can pass instructions for the application if you are covering the bill, not your parents.

Here are the cases when DBS MP3 will not be applicable:

  • Cash advances, balance transfers, payments via iBanking, 0% instalment payment plan transactions, and transactions made on a DBS/POSB debit card
  • DBS points/rebates are not qualified as transactions utilising MP3
  • MP3 application with incomplete fields and/or incorrect information will not be processed

Source: DBS

At the end of the promotion this year (31 Dec 2019), the 0% interest instalment for your 12 months repayment will expire. The following are the new values for your one-time non-refundable processing fee:

Here are some additional information you should take into consideration too:

  • The MP3 application will be based on SGD amount, transactions in foreign currency would be converted into SGD. This shouldn’t be an issue in your case since your renovation work would be done in Singapore and paid in SGD.
  • Do note that DBS points/rebates will not be awarded from MP3 fees. Therefore, you will not be earning any points/rebates from that S$15,000 renovation bill.
  • On top of that, there would be an administrative charge in the event of changes in tenure, early repayment and/or card account termination.
  • If the card account is terminated in advance, any balance from MP3 must be paid immediately.

The points on a) No points/rebates and b) Potential administrative charges, are objective points you should consider as a customer. But to place things into perspective, perhaps you should consider how and what you would like to do with your personal lump sum of S$15,000 should you opt for MP3 instead (Think: opportunity cost for your personal S$15,000).

To conclude, if you have other plans for your personal S$15,000 that are of great importance, you should consider undertaking the DBS MP3. However, if earning the points and rebates are crucial to you as a DBS customer, perhaps you should utilise your personal S$15,000 instead. Additionally, if the burden of potential administrative charges and immediate payment - should you make changes to your card account and/or plan - daunts you, proceeding with your personal S$15,000 would be my suggestion.

If you would like to proceed with applying for the DBS MP3, you’ve got 3 ways to sign up:

  1. iBanking
  2. Online Form
  3. Digibank Mobile

I’ve gathered some alternatives to the DBS MP3 with either a 0% interest rate or 0% processing fees. If you’re keen on them, do let me know and I’ll be happy to share! Alternatively, here’s a Seedly article that has consolidated the best renovation loans for 2019!

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