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Study loans in Singapore you can take to pursue a diploma or degree
Pursuing a tertiary education is a costly affair for most Singaporeans. A subsidised local degree can cost between $24,000 and $40,000. An overseas degree will cost much much more. Unless your parents have that spare sum tucked away, one of the options that is open to you is to take a study loan.
Here are some education loan options available in Singapore:
- CPF Education Loan
- MOE Tuition Student Loan
- Education loans from banks : DBS study loan | POSB Further Assist | OCBC Frank Education Loan | Maybank Education Loan | CIMB Education Loan | RHB Education Loan
CPF Education Loan
For Singaporean students who have not entered the workforce, one of the most accessible options is to ask if your parents can pay for your education using their Ordinary Account (OA). This is because the interest rate is relatively low at 2.5%.
This option is for subsidised admission costs for full-time degrees from approved educational institutions. For other courses and programmes, you may only receive partial funding.
You can also ask your spouse or siblings, but the condition is that the ordinary account must have sufficient funds and an available withdrawal limit, and that you have a tuition grant from the government.
Do note that it is not “free money”. The OA account holder will have deductions to his or her account and interest will also accumulate once the loan is withdrawn. So, you will need to start repaying the loan, either in monthly installments or in a lump sum, upon graduation up to one year after graduation or at the end of your last term.
Non-Singaporean students will require a guarantor. Applying is easy as you just have to do it with your SingPass.
MOE Tuition Student Loan
Another option is to apply for the MOE Tuition Student Loan. It can fund up to 90% of the admission cost for university students, and up to 75% subsidised fees for polytechnic students.
It has a 0% interest rate until the student graduates. This is available for all students studying at all local universities, excluding NAFA and Lasalle.
You will have to start repaying two years post graduation, either through monthly installments or in a lump sum. The maximum period of time to repay is 20 years for university students and 10 years for polytechnic students.
Education loans from banks in Singapore
|Loan||Max loan amount||Interest rate (p.a.)||Special conditions|
|DBS Study Loan||20% of subsidised tuition fees||5%|
|POSB Further Assist||$160,000||4.38%||Min income of $18,000|
|OCBC Frank Education Loan||$150,000 or 10x your monthly income||4.5%|
|Maybank Education Loan||$200,000 or up to eight times of monthly income||4.45%||Min. income of $18,000 for part-time students|
|CIMB Education Loan||Eight times of monthly income||4.78%||Min. income of $2,000 per month, or else, a guarantor who does|
|RHB Education Loan||$100,000 or at least 6 times your monthly income||4.78%||Min. income of $3,000 or $12,000 with a guarantor that earns $30,000 annually|
You could also borrow from a bank, and the interest rate is anywhere between 4.38% p.a. and 5% p.a. Do note that each bank has different processing fees and that will affect the final effective interest rate.
Some of these loans are for people who are already working and are seeking to further their studies as they have a minimum income requirement.
DBS study loan
DBS, the household name for a local bank, has a DBS study loan. You can borrow up to 20% of the subsidised tuition fees payable by Singaporean students and, or, also receive up to $3,600 annual living allowance. For polytechnic students, you can borrow up to 25% of the subsidised tuition fees and, or, up to $2,000 annual living allowance.
The loan charges zero interest when you are studying (up to five years), so you don’t have to worry about the compounding interest when you don’t yet have a job.
You have up to 20 years of repayment period for interest bearing loan and if you are paying the loan back monthly, the minimum monthly repayment must be at least $100.
The interest rate is based on the average prime lending rate of DBS, OCBC and UOB, which is currently at 5% as of 21 Dec, 2020.
POSB Further Assist
POSB, another household name has a Further Assist study loan, which allows you to loan up to $160,000 or 10 times the combined monthly income of you and your guarantor, along with a 10 years repayment period. This is more for people who are already working though, as you need to have a minimum annual income of $18,000. You’ll also need to have a guarantor between ages 21 and 60 and is not an undischarged bankrupt.
The interest rate is 4.38%.
OCBC Frank Education Loan
OCBC’s Education Loan can cover as much as $150,000 or 10 times your monthly income (whichever is lower). The interest rate is 4.5% p.a.
One thing interesting about the OCBC Frank Education loan is that there are three repayment methods: Standard, Graduated, or Graduate Plus.
Basically, the tiers just depend on how much you can afford to repay during study and when you graduate.
Standard is where you make payments towards your principal and interest once your loan is disbursed, in monthly installments. The effective interest rate is 5.17%,
Graduated is where you pay only the interest while studying and pay the principal plus interest after graduation. The effective interest rate is 5.06%
Graduate Plus allows you to pay only the interest while studying with an additional one year after graduation. The principal and interest can be paid from the third year onwards. The effective interest rate is 5.01%.
Maybank Education Loan
For Maybank’s educational loan, you can loan up to $200,000 or up to eight times of your monthly income, whichever is lower. The interest rates start from 4.45% p.a. The repayment period is up to 10 years and you can use it for both local and overseas studies.
For part-time students, they must earn at least $18,000 in annual income.
You can also use it to finance education-related expenses such as accommodation, computer equipment and books.
CIMB Education Loan
CIMB’s education loan is designed for Singaporeans who earn at least $2,000 a month. The income falls short, the lender must have a guarantor who is at least 21 years old with a monthly income of minimum $2,000. The loan must be not more than eight times of your monthly income. For those who need to borrow more, a guarantor is required.
The interest rate starts from 4.78% p.a.
RHB Education Loan
The RHB Educational Loan offers a loan as high as $100,000 or at least 6 times your monthly income. There are also flexible repayment schemes, like OCBC Frank and CIMB. The base interest rate starts from 4.78% p.a., and the repayment period is up to 10 years.
Individual applicants must earn an annual income of $30,000, or earn at least $12,000 and apply with a guarantor that earns $30,000 annually.
No matter which education loan you choose, we wish you success in your next step!