If you just graduated high school and are about to enter college, you’re probably looking for ways to fund your university fees. Aside from applying for scholarships, students can also receive financial help for their education through student loans.

Although most people are familiar with this type of loan option, not many people are actually knowledgeable about what an education loan entails. 

In this article, we will discuss how education loans work and provide you with a list of the best education loans available in Singapore right now.

How Education Loan Works in Singapore

A student loan is a type of financial assistance for students that aids them in paying for the cost of post-secondary education and related fees, such as tuition, books and supplies, and living expenses. 

When selecting the student loan that you would eventually be paying off in the future, you should check out the different terms involved in the student loan and compare that with your potential repayment ability.

Read more about how to choose the Best Education Loan in Singapore.

Best Study Loans in Singapore 2021

To help you find the best student loan option to finance your education, here is a list of the best education loans available in Singapore right now based on your financial situation, university location, fee structure and more.

Loan FeaturesMaybank Education LoanOCBC Frank Education Loan (Local, Overseas, Graduated)POSB Further Study Assist
Interest Rates4.45% p.a. (Education Loan Board Rate plus 0.45% p.a.)4.5% per year (EIR is 5.17% per year*)4.38% p.a.
Maximum Loan Amount Up to 8X the borrower’s monthly income or S$200,000 (whichever is lower)Local – Up to 90% of the tuition 
Overseas & graduated – Up to 10x the monthly income of the borrower or S$150,000 
up to 10x the combined monthly income of you and your guarantor (max. S$160,000).
Loan TermUp to 10 yearsUp to 8 yearsUp to 10 years
Minimum Annual Income S$18,000S$24,000S$18,000
Processing Fees2% of the loanS$7502.5% of the approved loan amount

1. Maybank Education Loan – Best Education Loan Promotion

If you want one of the best education loan promotions that any bank has to offer, you should consider Maybank Education Loan and take advantage of the promotional rates. Based on your financial needs, there are various flexible education loan repayment plans to choose from.

  • Students can enjoy an attractive interest rate of 4.45% p.a. (Education Loan Board Rate plus 0.45% p.a. interest rate)
  • The loan amount can be up to 8X the borrower’s monthly income or S$200,000 (whichever is lower).
  • The processing fee is 2% of the education loan.
  • The late payment fee is 3% in addition to the interest rate.
  • The loan term is up to 10 years.

2. OCBC FRANK Education Loan – Best for Local Education

For students who want to pursue their studies with a local university or college, the OCBC FRANK education loan is one of the best education loans available for you.

  • Students can enjoy 0% loan interest and no monthly repayment while studying
  • This loan can fund up to 90% of your tuition.
  • The processing fee is S$750.
  • Flexible repayment schemes with instalments as low as S$100.
  • Late Payment Fee is S$50

3. OCBC FRANK Education Loan – Best for Overseas Education

OCBC FRANK also offers one of the best education loans for students who would like to pursue overseas studies.

  • With the OCBC FRANK education loan, students can enjoy a low-interest rate of 4.5% per year (EIR is 5.17% per year)
  • The loan amount can be up to 10x the monthly income of the borrower or S$150,000 (whichever is lower).
  • Students can choose from three flexible repayment options with up to 8 years tenure.
  • The processing fee is S$750

Some banks give the option of “interest-only” education loans. With the OCBC FRANK Education Loan, you only need to pay the amount of the interest during the entirety of your stay in college which is usually up to 4 years. This way you wouldn’t have to worry about the actual credit amount while you’re still busy with your studies.

4. OCBC FRANK Education Loan (Graduated and Graduated Plus) – Best Interest First Student Loan

The OCBC FRANK education loan is the cheapest interest-only education loan available in Singapore:

“Graduated” option:
The effective interest rate is only 5.06% per year and you only need to start paying the principal after graduation. The early repayment fee is 1% of the loan prepaid.

“Graduated Plus” option:
The effective interest rate is even lower at 5.01% per year and you have an extra year after graduation before you need to start paying the principal amount. The loan tenure includes the period of study.

5. POSB Further Study Assist – Best Low-Penalty Education Loan

For this type of educational financing, students should check if the university or college that they are about to attend is one of POSB’s preferred institutions to qualify for POSB Further Study Assist. If it is, the bank will offer you a more competitive interest rate. 

If you worry about not being able to pay on time, you’ll be happy to know that POSB Further Study Assist charges the lowest late payment fees. Here is an overview of their interest rate and fees:

  • Interest rate: 4.38% p.a.
  • Processing fee: 2.5% of the approved loan (deducted upfront upon first disbursement)
  • Late payment fee: $30 on overdue amount after the 1st of every month
  • No cancellation fees and charges
  • No Full/partial monthly repayment fees and charges
  • No disbursement fees and charges for issuance of Cashier’s Order/Demand Draft to the institutions

Other options

CPF Education Scheme

In this loan arrangement, you will be using your CPF Ordinary Account (OA) savings to pay for subsidized tuition fees, whether it’s your own, your child’s or your spouse’s. The bank’s determination of whether to approve your application to use your CPF savings as payment for the education loan will be decided on a case to case basis.

Note that this scheme only covers full-time subsidized diploma or degree courses at Approved Educational Institutions (AEIs). If you are interested in availing of the CPF Education Scheme, you can apply through the CPF website.

MOE Tuition Fee Loan

You can get the MOE Tuition Fee Loan (MOE Loan) from DBS, OCBC and UOB. It’s one of the best possible loan options for students in Singapore. 

If you’re planning to study in polytechnics and autonomous universities such as Nanyang Technological University (NTU) or National University of Singapore (NUS), you can approach DBS or OCBC to apply for the MOE Loan.

If you’re planning to study at Singapore Management University, you can apply for the MOE Loan with your institution.  All other students can apply with the DBS.

  • For ITE diploma and Polytechnic students, the amount can be up to 75% of the tuition. The maximum repayment period is 10 years.
  • For University students, the amount is equivalent to up to 90% of the tuition. Borrowers can repay the loan for up to 20 years.
  • During the course of your college education, you can enjoy 0% interest rates.
  • Cash monthly repayments begins 1 year after graduation. 

MOE Study Loan

Students who have taken up a maximum of the MOE Loan, and with gross monthly per capita income of $2,700 or less, can apply for the Study Loan to finance the remaining fees. They can apply for the study loan with their respective institutions.

  • Maximum amount for polytechnic students: Up to 25% of subsidized fees payable and a living allowance loan of $2,000 per year. The maximum loan repayment term is up to 5 year.
  • Maximum amount for university students: Up to 10% of the subsidized Singapore Citizen fees payable and a living allowance loan of $3,600 per year.The maximum loan repayment term up to 20 years.

Studying Overseas? Read more about the Best Study Loans for Overseas Education.

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Things to consider before getting a study loan Singapore

Here are the three main things to consider before taking a study loan from a bank:

Loan Amount – Determine the maximum and minimum amount that you can borrow from the bank for the education loan. This way, you will know if it’s enough to cover your tuition and if you can pay it back in the future. 

Loan Tenure – On average, the maximum loan tenure for an education loan is 10 years. The maximum loan tenure for an education loan is usually from 8 to 10 years, while the minimum is 1 year. This would give you an idea of how long you would have to pay for the loan and budget your money accordingly.

Repayment Schedule – It’s important to know when you would need to repay your education loan and by how much. There are some loans that only require you to pay the interest rate during your stay in college and will only demand payment of the principal amount sometime after your graduation.

When to get a personal loan for education?

Getting a good and stable job will most often require a college degree, especially in a competitive job market. However, achieving this can cost you thousands of dollars. If you don’t have the money for it and you can’t qualify for an education loan, you should consider applying for a personal loan instead.

Here are scenarios when you should seriously consider getting a personal loan:

You don’t qualify for an education loan – There is a minimum annual income requirement that a borrower would have to meet to be eligible. It’s possible for banks to be more lenient if you have a guarantor who would usually have to be a family member. However, that guarantor would also have to meet the minimum qualifications required by the bank.

Your chosen course is not eligible for an education loan – Study loans can only be used to fund courses administered by an approved institution. In case the course that you would like to be enrolled in does not fall under the list approved by your University or educational institution, then your loan application might now be granted to fund your tuition for that course.

You’ve exhausted the limit on your education loan – Even if you are successful in getting an education loan, it might not be enough to cover your entire tuition. Study loans usually have a limit and only cover a portion of your tuition. The limit ranges from S$80,000 to S$200,000.

Once you’ve reached the limit, you might need to look for other ways to finance your college education.

You don’t have enough SkillsFuture Credit – If you are a Singapore citizen aged 25 and above, the government can give you S$500 to spend on over 10,000 eligible SkillsFuture courses and workshops. Since most college tuition fees can cost up to thousands of dollars, the SkillsFuture Credit may not be enough to pay for your tuition. 

In this case, you should look for personal loans from licensed money lenders that can provide you with a bigger amount sufficient to fund your entire tuition and workshop fees.

Conclusion

Because of the expensive costs that come with attaining a university education, many students choose to apply for student loans. But before you commit to an obligation, it’s important to choose the education loan that is right for you. Learn as much as you can about the loan and what goes with it such as the interest rate, fees and charges, and loan tenure.

If you’re not eligible for a study loan or the amount is not enough to cover your tuition fees, you should apply for personal loans from licensed money lenders to get approved for a loan quickly. 

Check out licensed moneylenders, such as Fortune Credit. With a minimum salary of S$1,500, you can borrow up to 6 month’s worth of your income.