Best Education Loan 2017

Education is one of the most important aspects of our lives. However, even with substantial subsidies from the government, university tuitions have risen dramatically over the last ten years, and many people might have difficulty in paying college tuition. For these people, getting an education loan could be a neat option of financing their education. Even if you have no income, all you need is a guarantor (an immediate family member) who earns S$30,000 per year to get your loan approved. In some cases, you won’t even have start repaying the loan until you finish your education. Below, we have prepared a list of the best education loans available in Singapore.

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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 PaymentProcessing FeeInterest Rate During SchoolInterest Rate After SchoolMonthly Instalment During SchoolMonthly Instalment After SchoolTotal cost
CIMB Education Loan2%5.39%5.39%S$407S$407S$4,816
Maybank Education Loan1%4.78%4.78%S$400S$400S$3,956
OCBC Frank Education Loan2.5%4.50%4.50%S$397S$397S$4,198
POSB Further Study Assist3%5.88%5.88%S$413S$413S$5,479
POSB Further Study Assist - Preferred Institutions2%4.60%4.60%S$398S$398S$4,156
RHB Education Loan2%4.78%4.78%S$400S$400S$4,306
Maybank Education Loan - Overseas Studies1%4.88%4.88%S$401S$401S$4,139
RHB Education Loan - Overseas2%4.88%4.88%S$401S$401S$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
Processing Fee1%
Interest Rate4.78%
Tenure1-8 Years
Min PrincipalS$5,000
Max PrincipalS$200,000 or 8x monthly income of guarantor
AgeAt least 18
Early repayment fee1% of amount prepaid
Late payment fee3% of late payment
Annual Income Requirement of GuarantorS$30,000

Cheapest Education Loan For Low Income Borrowers: 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
Processing Fee2.5%
Interest Rate4.50%
Tenure1-8 Years
Min PrincipalS$1,000
Max PrincipalS$150,000 or 10x monthly income of guarantor
Age17 & Above
Early repayment fee1% of loan prepaid
Late payment feeS$50
Annual Income Requirement of GuarantorS$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
Processing Fee2.00%
Interest Rate4.60%
Tenure1-10
Min PrincipalS$2,000
Max PrincipalS$80,000 or 10x combined monthly income of you and your guarantor
Age17 & Above
Early repayment fee-
Late payment feeS$30
Annual Income Requirement of GuarantorS$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
Processing Fee1.00%
Interest Rate4.88%
Tenure1-10
Promotion50% off processing fee (S$150 cap)
Min PrincipalS$5,000
Max Principal200,000 or 8x monthly income of guarantor
Age18 & Above
Early repayment fee1% of loan prepaid
Late payment fee3% of late payment
Annual Income Requirement of GuarantorS$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 ServicingProcessing FeeInterest Rate During SchoolInterest Rate After SchoolMonthly Instalment During SchoolMonthly Instalment After SchoolTotal cost
CIMB Education Loan - Interest Servicing Repayment2%5.99%5.39%S$125S$1,101S$7,918
Maybank Education Loan - Interest Servicing1%4.78%4.78%S$100S$747S$5,720
OCBC Frank Education Loan - Graduated2.5%4.50%4.50%S$94S$1,091S$6,314
OCBC Frank Education Loan - Graduated Plus2.5%4.50%4.50%S$94S$2,134S$6,864
RHB Education Loan - Graduated2%4.78%4.78%S$100S$1,094S$6,544
RHB Education Loan - Deferred2%4.78%4.78%S$0S$1,319S$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 [link url="#maybank"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 YearsMaybank Education Loan - Standard paymentMaybank Education Loan - Interest Servicing
Monthly instalment During SchoolS$400S$100
Monthly instalment After SchoolS$400S$747
Total costS$3,956S$5,720

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 YearsOCBC Frank - StandardOCBC Frank - GraduatedOCBC Frank - Graduated Plus
Monthly instalment During SchoolS$397S$94S$94
Monthly instalment After SchoolS$397S$1,091S$2,134
Total costS$4,198S$6,314S$6,864

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.

Comparing the total cost of education loans from major banks in Singapore in terms of total interest cost, categorized by interest type, payment method and domestic vs overseas study, assuming a loan of S$25,000 over 6 years
Cost Comparison of education loans in Singapore

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