Best Education Loan 2018
University tuitions have risen dramatically in recent years. For many students, getting an education loan may be essential in order to obtain a degree. Below, we have prepared a list of the best education loans available in Singapore to allow you to compare rates and features.
Our Picks For the Best Standard Payment Education Loan in Singapore
Education loans come in a few different flavors. Some are specific to domestic institutions in Singapore, while others can help you fund your education overseas. They also come in different repayment methods that could delay your repayment until after you graduate from school and get a job, thus making enough income to pay back your debt. Below, we organize the best education loans available in Singapore by cost and characteristics to help you find the best option for your need. To estimate the total cost, we assume the borrower gets a loan of S$25,000 over 6 years.
|Education Loans - Standard Payment||Processing Fee||Interest Rate During School||Interest Rate After School||Monthly Instalment During School||Monthly Instalment After School||Total cost|
|CIMB Education Loan||2%||5.39%||5.39%||S$407||S$407||S$4,816|
|Maybank Education Loan||1%||4.78%||4.78%||S$400||S$400||S$3,956|
|OCBC Frank Education Loan||2.5%||4.50%||4.50%||S$397||S$397||S$4,198|
|POSB Further Study Assist||3%||5.88%||5.88%||S$413||S$413||S$5,479|
|POSB Further Study Assist - Preferred Institutions||2%||4.60%||4.60%||S$398||S$398||S$4,156|
|RHB Education Loan||2%||4.78%||4.78%||S$400||S$400||S$4,306|
|Maybank Education Loan - Overseas Studies||1%||4.88%||4.88%||S$401||S$401||S$4,139|
|RHB Education Loan - Overseas||2%||4.88%||4.88%||S$401||S$401||S$4,389|
Best Education Loan for Local Studies
For funding your education in Singapore, we think the below four options are the best education loans available in Singapore. While some may cost a bit more than others, all are cheaper than other options we’ve seen and the difference in their overall cost over 6 years is actually quite miniscule. You won’t go wrong picking any one of these options. Therefore, you could consider other factors like minimum annual income, processing fees, limits on loan sizes and miscellaneous fees to pick one that suits you best.
Cheapest Education Loan for Local Studies: Maybank Education Loan
Considering total cost of a loan, which includes both processing fees and interest payments, Maybank Education Loan is one of the best options available in Singapore. First, Maybank is running a promotion until 31 March 2017 with a 50% discount on the processing fee. This means that you only have to pay 1% of your loan in fee (vs the original 2%), which is also capped at S$150 no matter how much you end up borrowing. Maybank’s Education Loan’s interest rate is also one of the lowest in the country at 4.78% as of January 2017. Please see our table below for detailed breakdown of the product.
|Maybank Education Loan|
|Max Principal||S$200,000 or 8x monthly income of guarantor|
|Annual Income Requirement of Guarantor||S$30,000|
Cheapest Loan for Low-Income Students: OCBC Frank Education Loan
While OCBC Frank Education Loan is slightly more expensive than Maybank Education Loan, it is still one of the best options in Singapore especially for people who make less than S$30,000. While most education loans in Singapore require the borrower’s guarantor to make at least S$30,000 annually, OCBC has a lower requirement of S$24,000 per year. In terms of cost, OCBC Frank Education Loan is only slightly more expensive than Maybank’s, with 2.5% in processing fee and 4.5% in interest. Our table below summarizes all the main features of OCBC Frank Education Loan for anyone who are interested.
|OCBC Frank Education Loan|
|Max Principal||S$150,000 or 10x monthly income of guarantor|
|Annual Income Requirement of Guarantor||S$24,000|
Education Loan With the Lowest Penalty Fees: POSB Further Study Assist
POSB Further Study Assist is a unique education loan in Singapore. On one hand, it’s actually slightly cheaper than OCBC Frank Education Loan with the same low-income eligibility. However, it has a maximum loan limit of only S$80,000, which can be quite limiting for a lot of prospective students who are trying to fund their tuition and other expenses during school. However, it can be a great option for students who want the flexibility to be a bit late on their monthly payments or even repay their debt early without penalty. It imposes no early repayment penalty fee, while others will usually charge a 1% fee on the amount you prepay. Make sure that your school is included in POSB’s list of preferred institutions to qualify for its low-cost program. Otherwise, this loan could be one of the most expensive ones you can find in Singapore. Below is a table detailing POSB Further Study Assist’s characteristics.
|POSB Further Study Assist - Preferred Institutions|
|Max Principal||S$80,000 or 10x combined monthly income of you and your guarantor|
|Annual Income Requirement of Guarantor||S$24,000|
Best Education Loan for Overseas Studies: Maybank Overseas Education Loan
If you are searching for an education to fund your education abroad, Maybank’s Overseas Education Loan is possibly one of the best options you might find in Singapore. Its costs are very low, even comparable to Maybank’s local study loan. Not only that, Maybank can provide up to S$200,000 of funding, which is a crucial factor given that tuition and living expense overseas can be significantly higher than the cost in Singapore.
|Maybank Education Loan - Overseas Studies|
|Promotion||50% off processing fee (S$150 cap)|
|Max Principal||200,000 or 8x monthly income of guarantor|
|Annual Income Requirement of Guarantor||S$30,000|
Our Top Picks For the Best Interest-Only Education Loan in Singapore
For people who prefer the option of delaying the process of repaying their loans as long as possible, many banks provide an option of "interest only" education loans. This means that the borrower only needs to pay the interest portion of the loan until their study is over (usually about 4 years). For people who may not have the ability to pay more than a few hundred dollars back to the bank per month while attending school, this option can allow them to focus on their studies and worry about repaying their debt after they graduate and get jobs. However, this also means that the borrower ends up paying a lot more to the bank over time. Below is a list of the available options in Singapore. We estimate their costs based on a loan of S$25,000 over 6 years.
|Education Loans - Interest Servicing||Processing Fee||Interest Rate During School||Interest Rate After School||Monthly Instalment During School||Monthly Instalment After School||Total cost|
|CIMB Education Loan - Interest Servicing Repayment||2%||5.99%||5.39%||S$125||S$1,101||S$7,918|
|Maybank Education Loan - Interest Servicing||1%||4.78%||4.78%||S$100||S$747||S$5,720|
|OCBC Frank Education Loan - Graduated||2.5%||4.50%||4.50%||S$94||S$1,091||S$6,314|
|OCBC Frank Education Loan - Graduated Plus||2.5%||4.50%||4.50%||S$94||S$2,134||S$6,864|
|RHB Education Loan - Graduated||2%||4.78%||4.78%||S$100||S$1,094||S$6,544|
|RHB Education Loan - Deferred||2%||4.78%||4.78%||S$0||S$1,319||S$7,157|
Best Education Loan for Short-Term Study: Maybank Education Loan
For interest-only education loans, Maybank provides the lowest cost loan, with 1% of processing fee (until 31 March 2017) and 4.78% of interest. However, it only defers principal payment for 3 years. This means that your interest only period can only be as long as 3 years, which may be problematic for people who pursue 4 year-long studies. Besides from the method of repayment, other terms are identical to the standard payment option we mentioned above. Below is a demonstration of how monthly payments and total cost differ for standard option and interest-only option.
|Loan of S$25,000 over 6 Years||Maybank Education Loan - Standard payment||Maybank Education Loan - Interest Servicing|
|Monthly instalment During School||S$400||S$100|
|Monthly instalment After School||S$400||S$747|
Best Education Loan for Long-Term Study: OCBC Frank Education Loan
If you are looking for interest-only education loans for longer term studies, OCBC Frank Education Loan could be a great option. While its costs are already quite cheap for this category, with 2.5% of fee and 4.5% of interest, it extends the interest only period to up to 4 years. OCBC calls this repayment program Graduated. OCBC Frank Education Loan also comes with a Graduated Plus program that extends the interest only period to 5 years. Besides from the method of repayment, other terms are identical to the standard payment option we mentioned above. Below is a demonstration of how monthly payments and total cost differ for standard option and interest-only option.
|Loan of S$25,000 over 6 Years||OCBC Frank - Standard||OCBC Frank - Graduated||OCBC Frank - Graduated Plus|
|Monthly instalment During School||S$397||S$94||S$94|
|Monthly instalment After School||S$397||S$1,091||S$2,134|
Study Loan From Your School: DBS, OCBC and UOB
Some public universities and polytechnics in Singapore also provide a loan of their own through DBS, OCBC and UOB. These loans are typically quite cheap & do not charge interest or require repayment until after graduation. Interest rates are average of DBS, OCBC and UOB’s prime lending rates. This loan can be used to pay up to 90% of the subsidized tuition fees (or 75% for polytechnics).
Typically, students who are enrolled in a local university, NIE or polytechnic is eligible for such a loan if they do not fall into any category below:
- Students receiving any Government/Statutory Board/any school scholarships which cover tuition fees
- Students receiving full Tuition Fee Subsidy from MENDAKI
- Students using CPF savings for payment of 100% of the subsidized tuition fees
- Students on self-funded courses
Below is a list of links to the local institutions and links to their education loan pages for people who are interested in finding more information:
Cost Comparison of Education Loans
Below, we have prepared a graphical comparison of education loans according to their costs. Cost includes both the processing fee and interest payments over the course of the life of a loan. We assume that each monthly payment is paid on time (no early or late payments), and that the loan is taken out at S$25,000 for 6 years.