Singapore probably has one of the best education systems in the world. However, most Singaporeans end up spending a fortune in the process of completing their education. On an average, a Singaporean may incur a cost of up to S$70,000 to complete a four-year degree.
Despite assistance from government and public aided universities, many of us find it difficult to afford education as the cost is relatively higher. To ease this burden, many banks are lined up to give you a loan for education.
Let us take a look at some of the best educational loans in Singapore. You can visit Bankbazaar.sg to compare educational loans from various banks.
Banks in Singapore that provide educational loans
- 1. OCBC Bank provides FRANK Educational Loan and FRANK Tuition Fee Loan.
- 2. DBS provides Study Loan, Computer Loan, and Tuition Fee Loan for universities and polytechnic.
- 3. POSB provides Further Study Assist loan.
- 4. Maybank provides Maybank Education Loan for local and overseas studies.
- 5. CIMB provides CIMB Education Loan that includes tuition fees, accommodation, computer equipment, and textbooks.
Bank interest rates on educational loans
The interest rates on educational loans will vary from one bank to another in Singapore. You will need to compare these educational loans and select the bank that suits your needs.
- 1. OCBC offers a lowinterest rate of 4.5% per year. The effective interest rate (EIR) is computed at 5.18% per year.
- 2. If you are taking a university loan from DBS Bank, you will get an interest-free loan during your study. Once you have graduated, an interest is applicable and will be charged at the prime rate. DBS offers Tuition Loan at 0% interest. You can opt for a Study Loan at low-interest rates.
- 3. POSB offers an attractive interest rate of 4.60% p.a. You will get a loan up to 10 times the monthly salary of the guardian/parent/self and this can be repaid in easy monthly repayments.
- 4. Maybank offers educational loans for both local and overseas education at low-interest rates. If you are planning for further studies, you are eligible to get a 25% concession on your processing fee.
- 5. CIMB provides Education Loan at low-interest rates. CIMB offers lowprocessing fee and has interest servicing schemes too.
Benefits of educational loans in Singapore
The benefits and advantages may differ from one bank to the other. Let us take a look at some of the common benefits that you are entitled to when you opt for an educational loan.
- 1. The interest rates are lower than for many other loans.
- 2. The processing fee is also low.
- 3. You can get flexible loan tenures.
- 4. The loan amount granted is usually up to 8 times or 10 times your monthly salary depending on the bank.
- 5. Educational loans are given for studies at a wide range of local and overseas institutions.
- 6. Additional finance facilities are offered by certain banks in Singapore.
Factors to consider while taking an educational loan
Most banks in Singapore will give you the option of repaying the loan only after you complete your education. However, you must remember that there are other charges or fees involved when you take an educational loan.
Prior to taking any educational loan in Singapore, you must compare the following components from different banks to decide the best option that suits your requirement:
- 1. Processing fee
- 2. Interest rate
- 3. Loan tenure
- 4. Minimum loan amount that can be taken
- 5. Maximum loan amount that can be taken
- 6. Age requirement
- 7. Which educational institutions are covered
- 8. Early loan pre-closure fee
- 9. Late payment fee
Educational loan eligibility
Some of the common eligibility features are as follows:
- 1. You or your parent/guardian should be a Singaporean or a Singapore Permanent Resident.
- 2. If you are a student (applicant), you should be at least 18 years old and up to 65 years old at the time of loan maturity. The age requirement is between 16 years and 50 years for certain banks.
- 3. If you are a guarantor, you should be at least 21 years old and up to 65 years old at the time of loan maturity.
- 4. The minimum annual income for students and guarantors will vary depending on the banks. You will need to check the respective bank’s website for information on this.
- 5. Some banks might provide student loans only for specific institutions.
How to apply for an educational loan?
If you qualify all the conditions for the educational loan, you may visit the preferred bank’s website and click on apply. You will be required to furnish documents related to your income, guarantor’s income, photocopy of NRIC card, an acceptance letter from the institution, etc. Once your loan is processed and approved, you will be notified.