Student life is often a juggle between busy class schedules, new and unfamiliar areas of study, and – all too frequently – financial woes. If you factor in the eye-watering prices for courses today, pursuing further studies can seem downright intimidating.
Fortunately, there are several loans available that students can take to finance their studies. In this article, we’ll explore some of the loan options available with all their varying pros and cons.
In its most basic form, a student loan is a type of loan borrowed to pay for associated education fees such as tuition, books, and accommodation.
In Singapore, there are three main options you can find for a student loan: the Ministry of Education (MOE) Tuition Fee Loan, the CPF Education Scheme, and education loans from financial institutions.
The MOE Tuition Fee Loan is a loan offered by the government to help students who need monetary assistance paying for their education costs. As of December 2022, the interest rate stands at 4.75% p.a., and covers up to 75% of the subsided fees payable by polytechnic students and up to 90% of the subsidised Singapore Citizen fees payable by university students.
Eligibility for this loan requires students to be studying full-time at any of the polytechnics, or studying full-time subsidised undergraduate and postgraduate programmes in the autonomous universities.
Singaporean citizens studying part-time subsidised undergraduate programmes in autonomous universities are also eligible for this loan.
It is worth noting that students who have already taken up the maximum of the MOE Tuition Fee Loan, and whose gross monthly income is S$2,700 or less, are eligible for the MOE Study Loan.
The MOE Study Loan differs from the MOE Tuition Fee Loan in its use. This former is used to finance the remaining fees the students encounter during the course of their studies.
CPF Education Scheme is a loan scheme that involves the use of CPF savings to pay for tuition fees. Under this scheme, students can use either their own CPF savings or their parents to pay for 100% of tuition fees. Of course, this type of loan requires you to have available savings, and you can only use up to 40% of the savings in the CPF Ordinary Account.
With this type of scheme, loan repayments begin after graduation or upon leaving the course – whichever comes first. Furthermore, both the CPF savings withdrawn, and the interest accrued from when the savings are withdrawn, have to be fully repaid by the student.
Students looking to further their studies can also take up loans from banks Typically, with these types of loans, the interest rates sit in the range of 4% to 5%.
To be eligible for loans like this, you need to be at least 21 years old. Students under this age will require a guarantor, co-applicant or sponsor.
Depending on the financial institution, you can expect two types of repayment schedules, monthly rest or an interest only loan. The former entails repayments with interest while studying, while the latter allows you to pay only the interest while you study, and the rest after you graduate.
Lendingpot empowers borrowers to connect with banks and other financial institutions through a process that is fair, fast and cost-effective. On our platform, the leverage is in your hands. With one simple application, you can receive a variety of offers with competitive quotes, making it easy to find a loan that works in your best interests. Don’t know where to start? Feel free to speak to our advisory team for help with your application.
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