Hong Kong's biggest lender, HSBC, has opted out of the tax-loan price war, unveiling a loan last night that must be repaid over a maximum of 12 months and will be charged - for existing customers borrowing between HK$100,000 and HK$299,000 - at 8.50 per cent. New customers borrowing at this level will pay 8.90 per cent. Existing customers borrowing between HK$50,000 and HK$99,999 will pay a rate of 9.2 per cent over 12 months, while new customers will pay 10.09 per cent. That compares with more aggressive pricing by smaller lenders such as Citic Ka Wah Bank and Dah Sing Bank. Citic Ka Wah will charge 5.93 per cent on a loan amount between HK$150,000 and HK$399,999 repaid over 12 months, and 6.39 per cent on a loan of between HK$50,000 and HK$149,000. Dah Sing Bank will charge existing customers borrowing between HK$100,000 and HK$300,000 a rate of 5.98 per cent and 6.44 per cent on a loan of between HK$50,000 and HK$90,000. In addition, the two smaller banks offer a package of options that include longer repayment periods and rebates on loan amounts that exceed tax bills. HSBC said the interest payments included a 2 per cent handling charge. Customers could opt for shorter loan repayment periods and could also draw down their loans in one or two instalments to save on interest payments, it said. In addition to lower rates of interest and flexible draw downs, Citic Ka Wah is offering a novel rebate scheme for borrowers who raise more than they are required to pay their tax. 'For customers whose approved loan amount is 150 per cent of their total tax payable or above, we will rebate 15 per cent of the second instalment of their tax bill,' said Freda Li, the bank's vice-president and head of retail marketing. HSBC will also allow customers to borrow up to 200 per cent of their tax bill, or six times their salary - whichever is lower, but offers no rebate on the loan. Citic Ka Wah will allow customers to borrow up to 200 per cent, four times their monthly salary or HK$500,000, whichever is lower.