Applications for loans to cover large tax bills jumped 20 per cent over the last year at Bank of America (Asia). The bank last month formed a strategic alliance with six retailers to offer zero interest plus cash rebates on the loans, applications for which close on November 15. Katty Leigh, first vice-president of marketing and planning, said most applications were for loans of HK$50,000 to HK$100,000. Under the bank's Shopper Interest Savings programme, the annual interest rate on a loan of HK$500,000 or more would be effectively minus 0.84 per cent, from 5.29 per cent, thanks to a rebate granted for shopping at selected merchants. Borrowers choosing this scheme must spend up to 20 per cent or HK$100,000 of their loan proceeds on cash coupons at merchants in the scheme. Customers who apply for a HK$50,000 loan are required to spend half the proceeds on cash coupons before being entitled to an annual interest rate of 0.28 per cent. Those who reject the coupons option will be charged an annual interest rate of 5.29 per cent to 6.91 per cent. Ms Leigh declined to disclose the preference of applicants but analysts said most applicants for tax loans would prefer the entire sum in cash rather than part in coupons.