What is a study loan?
A study loan is also known as a student loan or education loan in Singapore. It is taken up by students post-secondary to pay for their education. A study loan in Singapore can be used to pay for tuition fees, and other education-related expenses such as the cost of accommodation, textbooks and other education materials.
What are the benefits of a study loan?
Getting a study loan may be the one of the most important enabling steps you can take to steer yourself toward a better future if your aim is to complete higher education. After all, knowledge is power (and money).
A study loan enables you to pursue higher education even if you aren’t as lucky or privileged to have access to financial support from your family or via grants or scholarships.
How does it work?
When you take out an education loan, you borrow a sum of money from the bank, financial institution or licensed moneylender to be paid back within the loan tenure. The repayment comes with interest, with most ranging between 4% and 6% p.a. and offering tenures between 1 and 10 years.
You will be required to pay off this loan in regular instalments throughout the loan tenure you’ve signed up for. Depending on the flexibility of the repayment schemes, you could be starting the repayment the month after approval, or it could be deferred to after graduation.
Eligibility & Fees
To qualify for an education loan, you have to:
- Be a Singapore citizen or Permanent Resident
- Be above 18 years old
- Have an income of at least $18,000 annually (this income requirement may differ across lenders)
If you do not earn an income, you will require a guarantor to apply for an education loan:
- Your parents or sponsor can apply for the education loan on your behalf
- You can file a joint application with 2 or more sponsors
- Your loan guarantor should have an annual income of at least $30,000
To apply for a study loan in Singapore, you need to produce documents such as your letter of acceptance from the education institution stating your course, course duration and total course fee before your education loan application can be processed.
The following are also required:
- A completed application form signed by the applicant and guarantor (if applicable)
- NRIC of both applicant and guarantor
- Proof of the residential address
- Proof of relationship with guarantor
- For salaried employees: Your latest e-statement of income, or your CPF contribution history for the last 12 months, or your latest Income Tax Notice of Assessment
- For those self-employed: Your latest 2 years of Income Tax Notices of Assessment
*terms and conditions apply
Can I get a study loan before admission?
No. You will have to confirm your admission before you apply for a study loan.
It helps to start by figuring out if you prefer a study loan with a standard payment or deferred payment loan structure.
Standard repayment study loans are better for those who have significant savings or financial support, say, from their family, part-time or full-time job. These loans cost more during the student’s course of study, but less in the long run since loan repayments or at least interest payments are made regularly over time.
On the contrary, deferred payment study loans let you start paying off your education loan post-graduation. While this means you do not incur interest during the course of your study, the interest rates are much higher, translating to higher interest fees paid ultimately.