Education doesn't come cheap. It is an expense that everyone who wants to be successful has to incur. This is why countries provide their citizens with many study loans that help them in paying for their education.
Singapore does the same for its citizens as getting a degree is extremely expensive. The cost can go up to $200,000 if you want to go to a good university.
This is a significant amount and not everyone can afford this even through their savings. Here is everything you need to know about study loans in Singapore so you can make the best choice for yourself or your child.
What You Need To Know Before Taking A Loan
Before we dive into the different study loan options that are available, you need to take into consideration a few things. A study loan should never be taken unless you are well-versed with the following information:
The ability to pay back should be your greatest consideration. If you can’t pay back the amount with the interest rate then you will plunge deeper into debt. This will create extreme pressure and mental stress.
Interest rates can go up to 6.5%. This is why you must see this information before you decide to opt for a study loan.
Amount Of Loan
How much of your tuition fee is covered by the study loan you are choosing? If it is not covering the entire fee then you need to figure out if you have enough money and savings to cover up the remaining amount.
A flexible schedule is what everyone needs. You need to assess if you can pay back the loan once you have graduated. Many people don't consider this and end up feeling a lot of pressure once they have graduated.
Fees And Penalties
What will be the consequences if you can’t pay the loan on time? What are the other charges that come with a loan? This information is crucial because you don’t want to be stuck in a situation where you don’t know what will happen.
Singapore Study Loans In 2020
Now that you know the information you need to check, let’s dive right into the different study loans that are offered by banks in Singapore. You can compare all these loans to make an informed decision about the future of your education:
Here are some pre-requisites you need to have for qualifying for this study loan:
This is perhaps one of the most affordable options for anyone looking to study further. This is because they offer the lowest interest rate. Apart from that, you only have to pay interest when you are studying.
Once you have graduated, then you can start making real payments on the loan. This provides an ease to the person looking to opt for this loan as you don't have to worry about big payments during your education.
This study loan option is available to students that are looking to study at a private university in Singapore. It is also available to students looking to study abroad.
This is an expensive loan because it has a high-interest rate. This is why you should consider your income and ability to pay before you opt for this loan. Perhaps, the biggest selling point of this loan is that they offer to pay a tuition fee of $200,000 and this amount can easily cover up the entire cost of education.
However, with a high-interest rate, it can prove just as difficult to pay back. Here are the important features of this loan that you need to know:
This loan is not recommended if you don't have enough funds and you don't want to pay off your debt till ten years after you have graduated. It is on the risky side as there are many more viable options available that you can choose from.
If you go through the list of institutions that POSB prefers and choose that one to study further then you will get the cheapest interest rate at 4.6%. However, if you decide to take out the loan against an institution that they don't favor then the interest rate is 5.88%.
This is why it is important to take into consideration the different study options you have when taking out this loan. Many people who opt for this loan go for their preferred institutions as it provides them with a low-interest rate.
One thing to remember is that they only offer a maximum loan amount of $80,000 so you can’t take out a higher loan than that. Here are some other important features of this loan:
Many features make this loan extremely attractive and viable for students. Firstly, it has an affordable interest rate. Secondly, it offers a loan amount of $200,000. Thirdly, it is the best option for students who are looking to study in local institutions or abroad!
The best part is that the normal interest is 4.78%. However, if you study in an institution that Maybank prefers then you get an even lower interest rate of 4.5%!
This is why this loan is appealing to students who can’t afford an expensive loan. Here are all the other important features of this loan:
This loan requires the applicant to be 21 years of age or above. However, if you have a family member that signs as a joint applicant with you then you are good to go.
One reason why people opt for this loan is that it provides a flexible option for paying the loan back. The tenure is ten years so you have ample time to pay the loan back.
Apart from that, it offers three repayment options and you can choose the one you like best. Here are some other features of this loan that help it stand out:
Which Loan Is Best For You?
These are the top five study loans you can get for your education in Singapore. There is no perfect loan that is suited to everyone. You define what is perfect for you based on your financial situation and other factors.
This is why it is important to take into account all these features and factors before you opt for a certain loan. One thing to remember here is that the higher the tenure of your loan is, the higher the interest rate will be.
So, use this information to understand every loan deeply and then make an informed decision that is best suited to your needs. Education is not cheap and these loans can certainly help you get ahead in life. So, choose wisely!
Need more informative guides? Check these out too:
The Truth About University Life Unveiled
Local Vs Private Universities: Things to look out for