In a fast-paced and diverse market, it is not always easy to stand out. This is particularly true in Singapore. One edge that may help you to stand out is an impressive educational background. There is no question that a good education can help you advance your career.
Today, there are plenty of options for quality tertiary education, whether locally or abroad. Obtaining overseas education is becoming a popular choice for students in Singapore. The wide range of courses and the experience of studying overseas appeal to the students nowadays.
In this article, education loans are discussed and compared to help you decide which among the study loan Singapore for oversea study is best for you. Also, this article will provide information on the loan amount, interest rates, loan tenure, and repayment schemes.
1. OCBC Frank Education Loan
Loan amount: Minimum: S$1,000
Maximum: Up to 10 times the monthly income of the borrower, up to S$150 000
Interest rate: 4.50%
Processing fee: 2.5% of the approved loan
Repayment period: Flexible repayment options; loan tenure up to 8 years
Eligibility: OCBC Frank Education Loan is available to Singapore citizens or permanent residents with a minimum age of 21 years old. The borrower must have an annual income of at least S$24,000. If the borrower is not working or his/her income cannot support the loan amount, OCBC Frank Education Loan would require a guarantor or collateral. Guarantor must be at least 21 years old but not more than 60 years old.
Repayment options: OCBC offers three repayment options for the said loan. These options are standard, graduated, and graduated plus. Given three repayment schemes, this type of loan certainly can be tailor-fit to your needs and resources.
- Standard Repayment Option includes the payment of the loan’s principal and interest once the amount is disbursed.
- For a graduated scheme, only the loan’s interest is needed to be paid while studying, and the payment of the principal amount plus interest will only begin after graduation.
- Lastly, for graduated plus, only interest is paid while studying and another year after graduation. The principal amount and interest will only be paid from the third year onwards.
2. Maybank Monthly Rest Education Loan
- Loan amount: Minimum: S$15,000 Maximum: Up to 8 times the monthly income of the borrower, up to S$150 000
- Interest rate: 4.45%
- Processing fee: 1.5% of the approved loan
- Repayment period: Flexible repayment options; max loan tenure 10 years
Eligibility: Maybank Monthly Rest Education Loan is open to all Singapore citizens or permanent residents who are at least 18 years old but not more than 65. The borrower must be a salaried employee, variable income/commission-based earner, or self-employed. The requirement of a guarantor depends on the type of loan.
In the case of full-time studies, guarantor(s) is required at all times. Guarantor must be 21 – 65 years old upon loan maturity. He or she must be a citizen or permanent resident and have a minimum annual income of $30,000. One of the guarantors (s) must be closely related to the student (spouse, parent, parent-in-law, sibling, legal guardian)
Repayment options: Similar to OCBC Frank Education Loan, Maybank also has three payment schemes. These schemes are the interest servicing scheme, partial repayment scheme, and standard repayment scheme. Each payment scheme tries to accommodate different situations of students.
- Interest Servicing Scheme allows the students to pay monthly installments comprising of the interest-only that is payable up to a maximum period of 36 months or for a period to be determined by the Bank from time to time.
When the Interest Repayment PEriod lapses, the monthly installment may be adjusted for the remainder and the agreed tenure. This is convenient for students because they will not have the burden to pay the principal loan and interest during their studies.
- For the Partial Repayment Scheme, the students shall have to pay monthly installments comprising both the principal and interest, which shall also be payable up to a maximum of 36 months or for a period as may be determined by the Bank from time to time.
During the period of partial repayment, the bank, from time to time, may allow a one-time variation of the computed installment amount. Upon the period’s expiration, the monthly installment will have to be adjusted based on the remainder and the agreed tenure.
- Lastly, in a Standard Repayment Scheme, the borrower shall pay monthly installments comprising both the principal and interest for a period to be determined by the Bank from time to time.
The amount shall also be computed based on the agreed tenure and the loan amount or part thereof. This scheme appears to be burdensome for students since they must pay both the principal and loan interest as they pursue their studies.
3. CIMB Monthly Rest Education Loan
- Loan amount: Minimum: S$1,000 Maximum: Up to 8 times the monthly income of the borrower, up to S$200,000
- Interest rate: 5.39%
- Processing fee: 2% of the approved loan
- Repayment period: Flexible repayment options; Loan tenure up to 10 years
Eligibility: CIMB Monthly Rest Education Loan is available to all Singapore citizens or permanent residents who are at least 16 years old but not more than 50 years old. The borrower must be a salaried employee, variable/commission-based, self-employed, and has a minimum annual income of S$24,000.
A guarantor/collateral of the loan must also have a minimum annual income of S$24,000. He/she must be an immediate family member of the borrower.
Repayment options: CIMB Monthly Rest Education Loan provides for two payment schemes. These schemes are Interest Servicing Repayment and Standard Repayment scheme. In general, they are similar to the payment schemes of the education loans of OCBC and Maybank.
- For Internet Servicing Repayment, the borrower shall only pay the interest of the student loan during the course of study, which shall in any case not exceed 4 years.
The Interest Servicing Period is rounded up to the next 6-month mark, so if the course is 3 years and 7 months, the Internet Servicing Period will be 4 years. After the lapse of the period, the repayment of the principal and interest shall begin.
- While in Standard Repayment, it is the complete opposite. The borrower shall pay the monthly installment of the loan consisting of the principal and the interest all at the same time. The amount will also depend on the loan tenure.
Comparing the Study Loans
|Interest rates||4.50% p.a.||4.45% p.a.||5.39% p.a.|
|Loan tenure||8 years||10 years||10 years|
|Repayment schemes||Both have interest-only servicing scheme and a standard payment scheme||Both have interest-only servicing scheme and a standard payment scheme||Both have interest-only servicing scheme and a standard payment scheme|
|Processing fee||2.5% p.a.||1.5% p.a.||2% p.a.|
*Data as of January 2021
Interest Rates: OCBC Frank Education Loan has the lowest interest rate (4.50%) among the three study loans. It is then followed by Maybank Monthly Rest Education Loan which interest rate is only at 4.45%. CIMB Monthly Rest Education Loan has the highest interest rate of the three study loans, which is 5.39%.
Loan Amount: Of the three student loans, CIMB Monthly Rest Education Loan offers the highest maximum amount with S$200,000. Both OCBC Frank Education Loan and Maybank Monthly Rest Education Loan offer a maximum loan amount of S$150 000. Note, however, that CIMB Monthly Rest Education Loan also has the highest interest rate.
Both OCBC Frank Education Loan and CIMB Monthly Rest Education Loan offer a minimum student loan amount of S$1 000. Maybank Monthly Rest Education Loan has a minimum education loan of S$15 000. Knowing how much you’ll be needing for your education plays an important factor in weighing which student loan is best for you.
Loan Tenure: OCBC Frank Education Loan has the lowest tenure, which is up to 8 years. Both Maybank Monthly Rest Education Loan and CIMB Monthly Rest Education Loan allow a loan tenure of up to 10 years. Depends on your preference, a loan tenure may help you decide which education loan is ideal for you.
Repayment Schemes: In general, all educations loans allow for an interest-only servicing scheme and a standard payment scheme. However, both OCBC Frank Education Loan and Maybank Monthly Rest Education Loan have a third option. The third option of the education loans are not similar, but they offer a hybrid version of interest servicing and standard repayment scheme.
Processing Fee: Maybank charges the lowest processing fee, which is 1.5% of the approved loan. It is followed by CIMB, which imposes 2% of the approved loan as a processing fee. OCBC charges 2.5% of the approved loan for processing fee making it the highest.
In summary, OCBC and CIMB offer the cheapest education loans. OCBC Frank Education Loan is the best interest only education loan and has the shortest loan tenure, which is up to 8 years. Maybank Monthly Rest Education Loan and CIMB Monthly Rest Education Loan have the longest loan tenure (up to 10 years).
Perhaps, a low-interest rate may attract students. Thus, while CIMB provides the highest maximum loan amount, it also has the highest loan interest. Students may find this fact burdensome.
Other Option: Personal Loan
- Loan amount: Minimum: S$3,000 Maximum: Up to 6 times the monthly income of the borrower
- Interest rate: 1-4%
- Processing fee: 10% of the principal of the loan when the loan is granted
If you find that none of the top bank education loans fit you, worry not. There is also another option that can help you with your studies. Bugis Credit offers a personal loan that you may apply to support your further studies. Bugis Credit is one of the top reliable money lenders in Singapore.
It is important to remember, however, that this is not like the student loans mentioned above. Thus, the flexibility of the repayment schemes of student loans may not be available.
Nonetheless, if you do not meet the student loans’ requirements or do not have an interest in either of the education loans discussed, then obtaining a personal loan from Bugis Credit will also help further your studies.
Eligibility: Borrowers must be at least 18 years old and the minimum salary of the borrower must be S$1 500 for locals and permanent residents. If the borrower is a foreigner, then he/she must have a minimum salary of S$ 2,000.
Repayment period: You can repay the loan from 6-12 months, depending on the terms and conditions of the agreement.
Unlike other money lenders that impose a fixed loan interest, Bugis Credit affords its borrowers a tailor-made loan package. Thus, its loans’ interest rates are adjusted depending on the terms of the loan entered into. A guarantor is also not mandatory for personal loans under Bugis Credit.
Getting further studies aids students to develop their greatest potential. As resources may be limited to students, obtaining education loans become a practical step. Students may find the education loans discussed in this article helpful in their pursuit of a successful career.
Our advice is that students consider their resources and the study’s program they want to pursue before deciding which of the education loans to take. As emphasized, interest rates, loan amount, and tenure should be considered when you get a study loan. A student loan is a tool that can help you advance your career provided that you make the right choice.