Best Study Loans in Singapore: A Comparison Between Top Banks
The average cost of education in Singapore in a local or public university is S$8,000 to S$9,000 per year. Citizens of Singapore qualify for a tuition fee subsidy under the MOE Tuition Grant.
For non-subsidized education, the tuition fees at university average at S$10,000 or more annually. For this reason, many rely on education loans for the purpose of financing their tuition fees at university for more or less 5 years, even at the expense of having to pay an interest rate/s, repayment fee, and other repayment charges.
Find the right lender which will offer a low-interest rate, reasonable late payment fee, affordable processing fee, and flexible payment schedule. Whether you are working part-time or not working at all, there are study loans available for you to finance your education.
Where to Apply for an Education Loan?
In Singapore, there are some public universities and polytechnics that provide a loan of their own to students. These education loans are made through DBS, OCBC, UOB. Such student loans are available to both uni/ NIE or polytechnic students. Key features of these loans are the following:
University / NIE
- Minimum monthly payment of S$100;
- Repayment period is within 20 years from the time students graduated;
- No interest rate during the study, charged only at an average prime rate of DBS, OCBC, and UOB after course completion; and
- Up to 90% of the subsidized tuition.
Polytechnic
- Minimum monthly repayment of S$100;
- Repayment period is within 10 years from the time they graduated;
- No interest rate during the study, charged only at an average prime rate of DBS, OCBC, and UOB after education completion; and
- Up to 75% subsidized tuition.
Please note that to be eligible for student loan offered by local uni, NIE, or polytechnic, they should not be among these categories below:
- On self-funded courses;
- Using CPF savings to pay up 100% of the subsidized tuition;
- Receiving tuition grant from MENDAKI; or
- Getting any school or statutory board or government scholarships.
List of Institutions Offering the Government-funded Loan
1. OCBC Frank Education Loan
Student loans from OCBC are among the cheapest local and overseas study loan Singapore.
Interest: OCBC Frank Education Loan stands out because it charges 4.5% interest for all its student loans. The processing fee of 2.5% is also affordable.
Loan amount: However, OCBC Frank Education only provides a limited student loan amount of S$150,000 for international studies. If not, then ten times the monthly income of the student. Compared to other financial products of other banks, this amount is still a sizable loan.
Verdict: OCBC Frank Education Loan is ideal for many in terms of repayment. The bank has the cheapest interest-only education loans where only the interest rate is paid per month. It’s only after the studies are concluded that the principal loan should be paid.
2. Maybank Education Loan
Interest: The promotional rate of the bank includes processing fee: 2% and annual interest rate: 4.45%.
Loan amount: It offers an education loan of S$200,000 so it may be the best student loan for those attending expensive educational institutions.
Verdict: While the education loan of Maybank is good for those that availed the promotional rate, this education loan is not recommended for those who failed to avail such.
Hence, the local and overseas education loan rates of Maybank, while very competitive for some, are not particularly competitive to other borrowers. Resort should be made to other banks that might offer more appropriate study loans according to your personal needs and circumstances.
3. POSB Further Study Assist Loan
Interest: It has relatively high interest rates of 5.88%. However, competitive interest rates for preferred schools are as low as 4.38%. The processing fee: 2-3%. Late payment fee of S$30 is charged.
Those that attend preferred institutions are offered by POSB cheaper interest rates, lower processing fees, more flexible loan options like more flexible repayment schedule, longer loan maturity, better offered products, and more. One that studies in other organizations does not enjoy the same banking terms.
Loan amount: It offers up to 10x the combined monthly income of you and your guarantor (max. S$160,000).
Verdict: Unfortunately, the list of the bank’s preferred schools is limited. The education loan of this bank, however, is really recommended to those who would want to pursue a uni in the country because its repayment rate/s are considered to be among the cheapest in Singapore.
4. RHB Education Loan
Interest: The interest rate is at 4.78% for local loans while 4.88% for international loans.
Loan amount: The loan size of this bank reaches up to 6 times the borrower’s monthly income.
Verdict: Its Education Loans do not offer the cheapest study loan but it is a good alternative to all other study assist in Singapore.
It doesn’t require payments during years of study. Monthly repayments will be charged only when the loanee has already completed his or her education. Hence, RHB Education Loan is ideal for those who do not earn monthly income.
How to Choose a Study Loan?
When choosing the best education loan, one should begin in determining whether one is better suited for a standard payment or deferred payment loan structure.
A standard payment education loan refers to a student loan where regular repayment or instalment payment should be fulfilled. Such is a good fit for those that earn monthly income, have significant savings, or backed with financial support. It costs more during a student’s uni tenure but is way cheaper in the long-run than deferred payment.
Cost Comparison of Education Loans in Singapore
When comparing loans from each bank, the total borrowing cost of each loan should be considered. Pertinent details of such cost include the interest rate payment and processing fee during the lifetime of the loan.
Case Study : Total Cost of Education Loan Singapore
Assuming 5-year, Total of S$25,000 loan
How to Apply
Eligibility and Requirements:
Local Uni / NIE
- No income requirement
- No age restriction
- Do not fall into any of these categories:
- Students on self-funded courses.
- Students using Central Provident Fund (CPF) savings to pay up 100% of the subsidized tuition.
- Students receiving tuition grant from MENDAKI.
- Students getting any school or statutory board or government scholarship.
- Non-Singapore citizens or permanent resident students who are paying full fee/s
Polytechnic
- No income requirement
- No age restriction
- All full-time subsidized diploma students studying in any of the local polytechnics are eligible for this student loan if they do not fall into any of these categories:
- Students using Central Provident Fund (CPF) savings to pay up 100% of the subsidized tuition .
- Students receiving tuition grant from MENDAKI.
- Students getting any school or statutory board or government scholarship.
Steps to Apply:
Local Uni / NIE
- Complete the application form and the Letter of offer.
- Bring a guarantor with you and the following documents to any DBS branch
- NRIC or passport (for both undergraduate and guarantor), Letter of Offer, and the form.
Polytechnic
- Complete the form and the Letter of offer.
- Bring a guarantor with you and the following documents to any DBS branch.
- NRIC or passport (for both undergraduate and guarantor), Letter of Offer, and the form.
Conclusion
Do not ever attempt to use and rely on your credit cards to fund your study in Singapore or abroad. That will not last long until graduation and when it does, it can leave you indebted more than you should be.
You have the option to avail of the best loan according to your personal circumstances. Look for the financial institution that best fits your study assistance needs.
Moneylender Review can do this task for you. It has acquired expertise in comparing personal loans from different top licensed moneylenders in Singapore that could also be tapped to fund your education.
Customers can rely on it when they want to expand their credit options. Not only the list of potential licensed lenders will be provided to you but also some of their key features like interest rates, loan amount, repayment, among others.
