Cost Comparison of Student Loan in Singapore

Cost Comparison of Student Loan in Singapore

You may find yourself at a crossroad where you are figuring out if you would like to jump right out there to work and gather as much you can per month as you possibly can without the help of a degree or go back to school and get your dream education to arm you with the proper educational background and make your CV more enticing for your future employer. 

You may well be even out to fulfill your lifelong dream of having a master’s degree or a Ph. D. about what piqued your interest. Whatever the circumstances are, do not let your financial trouble get in the way of getting education.

If you have made up your mind, maybe it is time to focus on dealing with what comes with education. No, not COVID 19, tuition. If money is the only thing that hinders you from getting that diploma you have your eyes on, good. 

Are you going to apply for a home loan? Home loans are good, sure, but they are called home loans for a reason: for home expenditures. How about a part time job? Not bad but would the school let you pay per month? Definitely not. And you would want your monthly rest on top of that. 

Instead of applying for a home loan and loans personal with harsh repayment schemes and hectic loan maturity dates on top of high loan interest rates, why not apply for loan education? Focus on your studies while paying for your dues through study loans.

Due to student loans, and education loan, or study loans, you would not have to worry about your educational fees getting a slice from your savings account in the bank nor any of your credit cards. 

We will discuss which best bank will fit your education loan needs for an aspiring student such as yourself. Banking has never been easier with study loans.

Imagine getting your chosen education field while getting savvy at banking? A good deal indeed. Ease up on your credit card dues and get started on necessary loans such as education loan and others.

First, we have to know how student loan works. Student loan, education loan, or study loan are loans applied from a financial institution, your favorite bank might be offering one, that caters to your educational needs save your banking rights reserved. 

Due to its intended purpose, these loans are often pegged at low interest rates and flexible repayment terms as well as unsecured, meaning you only need a guarantor instead of collateral in contrast to personal loans and other types of credit.

There are four types of student loans available here in Singapore:

1. Government Loan
2. CPF Education Scheme
3. MOE Tuition Loan
4. Education Loan from Banks and/or other Financial Institutions

But, we will discuss more about these types of education loans later on. So hold on because to be able to properly scrutinize and assess your study loan necessities, you have to first check how much your tuition is going to be.

 

Average Tuition Fees for Tertiary Education in Singapore

Before you take out a loan from bank or licensed money lender, first you have to check out the tuition details of your desired school. Here’s a list of University school tuition no copyright 2020.

 University Estimated Average Fee per Academic Year
 National University of Singapore SGD 24,600 to SGD 28,800
 Nanyang Technological University SGD 24,600 to SGD 28,200
 Singapore Management University SGD 34,350
 Singapore University of Technology and Design SGD 39,600
 Singapore Institute of Technology SGD 27,720
 Lasalle College of the Arts SGD 29,190

Do take note that these estimated average tuition should only be used as estimates and it is always better not to contact us but contact your chosen university or college for the school monetary products of your chosen degree or course to give you an accurate quotation information. Travel insurance not included.

 

Types of Education Loans

Now that you have an idea you of how much it would cost to begin your long-awaited educational journey, you should also be well versed when it comes to the types of education loan available to you. There are four types of education loan you can actually apply for, here’s a quick description for all four.

1. Government Loan

The government study loan is a study grant or tuition fee subsidy available to all SG citizens and permanent residents. This education loan covers up to 25% of subsidized fees payable and a living allowance of SGD 2,000 per year for polytechnic students and up to 10% of the subsidized SG citizen fees payable with a living allowance of SGD 3,600 annually for university students.

The government educational loan is interest free or 0 interest for students with a monthly income of SGD 900 or less, and for students with monthly income of SGD 950 to SGD 2,700, the interest will only accrue upon graduation or finishing your studies.

2. CPF Education Scheme

The CPF education scheme is a payment scheme for your education loan that lets you use your parent’s social security savings or central provident fund. This education loan will pay up to 100% of your tuition and will only start repayment a year after you graduate or upon termination of your educational commitment or finishing your studies, whichever you opt first.

The CPF education scheme however, is only available for your first undergraduate degree and if you are a, indeed, a citizen.

Currently, the CPF education scheme’s loan interest is pegged at the CPF Ordinary Account interest rate at 2.5%, significantly lower than those of banks and other financial institutions.

The CPF Education Scheme is only available in local universities.

Here are some points to take note for a CPF education scheme:

  • No guarantor required
  • Can be paid per month or by lump sum with a maximum loan tenure of 12 years
  • Interest begins to accrue when the loan is withdrawn from the account

3. MOE Tuition Loan

Moe tuition loan is a government education loan from private financial institutions to help Singapore citizen students with up to 90% of their tuition.

MOE tuition loan is also available only for local educational institutions with the exception of both Lasalle and Nanyang Academy of Fine Arts.

Here are some points to take note for a MOE Tuition Loan

  • Guarantor required
  • Loan repayments start after 2 years of graduation from studies
  • Interest begins to accrue after graduation
  • Interest is pegged at other banks

 

Education Loan from Banks/ Financial Institutions (FIs)

However, if both CPF and MOE are inapplicable for your University payment necessities, there are always alternatives such as banks such as DBS OCBC and UOB and moneylenders to take loans from. Luckily, banks offer education loan and other products to help you with your tuition and help you not stream funds from your savings account. You should also check whichever bank you currently have your savings account on to save some hassle. Most probably they offer loan products tailored for your education loan necessities especially if your bank is either OCBC Frank, Maybank, DBS, POSB, RHB, or CIMB bank.

You will also be required of a guarantor that will be met by the bank and meet the bank’s minimum income requirement. The guarantor often does not have to be your parent or guardian.

Here’s a table with more information and details about education loan offered by OCBC FRANK, Maybank, DBS, POSB, RHB, and CIMB bank:

 Bank Interest Rate Processing Fee Per Month
 OCBC FRANK Education Loan
OCBC
4.5% 2.5% (approved loan) SGD 372.86
 Maybank Monthly Rest Education LoanMaybank 4.45% 2% (approved loan) SGD 372.41
 DBS Study Loan
DBS
4.38% 2.5% (approved loan) SGD 371.77
 POSB Further Study Assist
POSB
4.38% 2.5% (approved loan) SGD 371.77
 RHB Monthly Rest Education Loan
RHB
4.78% 2% (approved loan) SGD 375.41
 CIMB Monthly Rest Education Loan
CIMB
5.39% 2% (approved loan) SGD 381.01

*all figures computed at SGD 20,000 over 5 years.

• OCBC Frank Education Loan

OCBC loan details: For this loan, you have to be at least 21 years old and above and either an SG citizen or a permanent resident. It also lets you borrow up to SGD 150,000 with a tenure of up to 8 years and flexible payment options. No travel insurance nor free credit cards. OCBC 360 account not required.

Maybank Education Loan

Maybank loan details: This loan lets you borrow up to 8 times your monthly salary, with tenure of up to 8 years. It also has an age restriction from 18 to 65 years of age and requires you to be an SG citizen or a permanent resident. No travel insurance nor credit cards.

• DBS Education Loan

DBS loan details: Features no early redemption nor cancellation penalty and lets you borrow up to 10 times your monthly salary up to SGD 160,000 with a tenure of up to 10 years. Age requirement is from 17 to 65 years old and is only available for Singapore citizens and permanent residents. No travel insurance or free credit cards.

POSB Further Study Assist

POSB loan details: requires you to be 17 to 65 years old upon maturity with Singapore citizenship or permanent residence, no early redemption nor cancellation penalty, borrow up to SGD 160,000 with payment fee tenure of up to 10 years. No travel insurance nor free credit cards.

RHB Education Loan

RHB loan details: 21 to 62 years of age requirement with Singapore citizenship or permanent residence, borrow up to 6 times your monthly salary with flexible payment schemes with 10 years of tenure and a personal accident coverage of up to 10 years also. No travel insurance still nor free credit card, sorry!

CIMB Education Loan

CMB details: Singapore citizenship or permanent residence required, 16 to 50 years old requirement, borrow up to 8 times your monthly salary or up to SGD 200,000 with a tenure of up to 10 years. Yup, still no travel insurance nor credit card.

 

Cost Comparison of Education Loans in Singapore

As we have discussed, there are three options for individuals on where to get your education loan: Government subsidy, private banks, or money lenders.

The wisest action will be to apply for government grants as they will have 000 annual interest rates therefore easing your payment fee but the requirements may not be in your favor. Private Banks and money lenders however have higher interest rates compared to government subsidies so when it comes to loan interest government is the way to go but results are the same. They all pay for your school.

Which student loans should you choose?

The one you choose is up to you and you alone, however here are a few information to keep in mind when choosing your education loans for the best results:

  • Loan amount
  • Bank or FI’s website
  • Interest rate while you’re studying vs after you graduate
  • Period of repayment
  • Other Charges

 

Conclusion

Overall, in your quest for educational prowess and diploma acquisition, no matter for what purpose it is, your ability to repay a loan will be the most important part of this big decision.

If you still cannot find the loan that suits you, might as well check out A1 credit’s personal loans as they offer unsecured loans with no guarantor required, few requirements needed, and quickly approved.

Don’t worry too much, you got this.

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