Nowadays, educational loans are a popular choice for many students to finance their studies. This is because education can be costly and while some will prefer looking for a part-time job while studying, applying for student loans can be a better alternative to let you have more time to study. In addition, education is a good investment which pretty much makes these loans a practical choice for you to pursue schooling.
In this reading, we will show you some of the popular study loans in Singapore that you can consider applying to aid your educational expenses.
The CPF Education Scheme is an education loan plan in which you can use your Ordinary Account (OA) savings to pay for your subsidized admission costs. You can also use this for other members of your family and relatives although the granting of this loan is based on a case-to-case assessment.
The CPF Education plan is only eligible for a selected range of full-time subsidized degree courses from the list of Approved Educational Institutions (AIEs). In addition, you must only be using your Ordinary Account (OA) savings to pay for your own, children’s, spouse’s, siblings’ or relatives’ tuition fees and have sufficient OA savings and Available Withdrawal Limit to do so.
Furthermore, you must also have a tuition grant from the government. For foreigner students, a guarantor will also be needed. It’s worth noting that you will not be eligible for this education scheme if you are only applying for a part-time degree or program. Deductions to your account will automatically start once the application is received. Interest will also start accumulating once the loan is withdrawn.
This educational scheme can grant a cover of 100% of all your tuition fees with only 2.5% interest rate—making the CPF education scheme one of the most sought out educational loan in Singapore. For other courses, degrees, programs, or schools, funding will only be partial: 10% if you’re studying at a university; 25% if you’re studying at a polytechnic, pursuing a Technical Engineer Diploma (TED) or a Technical Diploma in Culinary Arts at Institute of Technical Education (ITE); and 50% if you’re studying at an art college.
You’ll start repaying the loan upon graduation up to one year after graduation or the end of your last term. The repayment can either be paid in one transaction or through monthly installments for a maximum of 12 years. It’s encouraged, however, to settle the repayment as early as possible to minimize the amount of interests accumulated from the installment.
You can apply for the CPF Education Scheme by setting up your SingPass here.
As an alternative to the CPF Educational Scheme, students can also opt to apply for the MOE Tuition Student Loan if they are not eligible for the CPF Plan. Here, there will be a 0% interest rate on the loan during the time when the student is still studying in college. The loan is available for all local university students except students from NAFA and Losalle.
The MOE Tuition Student Plan can cover 90% of your admission cost for university students and 75% subsidized fees for polytechnic students. The repayment can begin upon graduation and/or 2 years after the termination of your studies. Like CPF, the repayment can be fully paid in a lump sum or through monthly installments for up to a maximum of 20 years for university graduates and only 10 years for polytechnic students.
You can learn more about the MOE Tuition Loan here.
If you’re not eligible for both CPF Educational Scheme and MOE Tuition Student Loan, it will be best to settle with Bank Loans instead. There are 6 banks in Singapore offering different educational loans.
This plan is applicable by Singaporeans and Singapore Permanent Residents aged 16 to 50 years old. The required income for the Principal Applicant or Account should be at least S$24,000 with a minimum loan amount of S$1,000. If the applicant do not meet the minimum required income, a guarantor must be present for the application process. He/she must be at least 21 years old with a monthly income of at least S$2,000.
The loan requested must also be more than 8 times of his/her monthly income. The interest rate for the plan is 5.39%. You can learn more about CIMB’s student loan here.
The RHB Educational Loan offers an interest rate of 4.78%. They can offer a loan as high as S$100,000 or at least 6 times your monthly income. They also offer flexible repayment schemes. You can choose from either paying a standard monthly installment of the principal plus interest (standard payment) or a graduated repayment with interest amounting only until the completion of your studies (graduated payment). You can also choose to spread the installments for up to 10 years. Find out more about this plan here.
OCBC’s Education Loan can cover as much as S$150,000 or 10 times your monthly income (whichever is lower). The interest rate is 4.5% per year with three repayment methods: Standard, Graduated, or Graduate Plus.
For the first method, Standard, you can pay your monthly installments (principal + interest) once your loan is disbursed with an effective interest of 5.17% per year. The second one, Graduated, will allow you to pay only the interest while studying and start paying the principal plus interest after graduation with an interest rate of 5.06%. For the last one, Graduate Plus, you can pay only the interest while studying with an additional 1 year after graduation. You can pay the principal and interest from 3rd year onwards. This has an interest rate of 5.01% per year. Read more about OCBC Educational Plan here.
This educational loan is available for Singapore Citizens and Singapore Permanent Residents from 18 to 65 years old with a minimum income of S$18,000. Interest rates start from 4.45% and you can loan up to S$200,000 or 8 times your monthly income. They also offer additional financing for education-related expenses such as accommodation fees, computer equipment, books, and other academic essentials you may need. The loan allows up to 10 years of repayment period. Learn more about it here.
With an interest rate of 4.38%, loan up to S$160,000 or 10 times the combined monthly income of you and your guarantor, along with a 10 years repayment period. You must be at least 17 to 65 years old and have a minimum annual income of S$18,000. You can apply for the plan here.
The DBS Study Loan allows you to borrow up to 20% of the subsidized tuition fees or up to S$3,600 annual living allowance without interest while studying. Repayment period can last up to 20 years for interest bearing loan, and up to 5 years for interest free loan with repayment commencing upon course completion. The minimum monthly repayment must be at least S$100. Undergraduates who have received financing of tuition fee from at least one or a combination of the following are eligible for this study loan: Tuition Fee Loan; CPF Education Loan; MENDAKI Tertiary Tuition Fee Subsidy/Loan; Scholarship/grant; a fee subsidy/loan from a registered government agency. Learn more about the DBS study loan here.