What is Study Loan?

Singapore is a popular place to pursue higher education because of the high standards and quality of the education that is available.  It attracts students from many parts of the world offering a wide and diverse range of topics to pursue and the flexibility of the education system offers major advantages to students.  Education is rightly considered to be one of the most significant investments in your life and your pursuit of education should not be hampered by financial problems or a shortage of money.  Student education loans or study loans as they are called offer a comprehensive solution for the financial needs of your education because of the following:

  • You need to manage the considerable expenses of a good education and to manage your day-to-day living expenses.  A study loan that helps you to pay your tuition fees as well as other professional fees and helps out with your living expenses can be a real boon.
  • Student education loans are highly flexible and really depend on what kind of education you intend to pursue.  Financial assistance is available for undergraduate as well as postgraduate courses so you can pursue almost any educational courses that you are interested in
  • Study loans are among the cheapest form of loans that are available and often carry interest rates that are considerably lower than any other form of loan
  • There are a number of private lenders in Singapore in addition to the government schemes and they all offer extended payment and postponement schemes.  Before deciding where you want to borrow, it is in your own interest to study and compare the details of the various schemes so that you can get a deal that suits your personal preferences as well as your budget.

Only citizens or permanent residents of Singapore are eligible for a Singapore Education Loan.  You should be between 21 and 62 years old and earning a minimum annual income of S$12,000.  If you are not working, your parents or your sponsor can apply for the loan on your behalf but must meet this minimum income criterion.  Two sponsors can apply jointly for the education loan.  If you are using a guarantor, the minimum annual income of the guarantor must be S$30,000.  You should not have an existing education loan from any bank or institution.

The bank or institution will lend up to six times the monthly income of the individual or the combined applicants and the maximum amount of the loan is S$100,000.  The minimum loan amount is S$3000 and the term of the loan can be for a maximum of 10 years.  In addition, there is an upfront processing fee which is normally 2% that will be deducted from the first disbursement of the loan.

Other fees and charges are as follows:

  • Full prepayment penalty is 1% on the original amount of the loan
  • Partial prepayment penalty is 1% on the amount prepaid if prepayment is made during the tenure of the loan.  The minimum prepayment is S$1000 and larger prepayments must be in multiples of S$1000
  • If the loan is cancelled after the letter of offer has been accepted, there is a cancellation fee of 1% on the original loan amount.

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