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Best Education Loan for University Students 2018

For most of us, education loan is one thing we can’t run from when trying to further our education especially in this “paper-laden” society where it is almost-mandatory to have a university degree.

Whether you are a local university student looking to fund your remaining 10% of your university fees or you are looking to widen your options or to fast track your route with a private university either locally or overseas.

Here Are The Best Education Loan for University Students 2018

FeaturesBest Education Loan
Cheapest for Local UniversityOption 1: OCBC FRANK
Option 2 and 3: RHB and Maybank
Cheapest for Overseas UniversityOption 1: OCBC FRANK
Option 2: POSB Bank
Best for Part-time Students (Local)Option 1: Maybank
Option 2: POSB Bank

The Cost Of Education Loans

Taking up a loan isn’t as easy as borrowing a dollar and return that same dollar back. The bank ought to earn something from loaning you money after all.

How so? You might ask. Through the interest on loan and the processing fee.

These are your costs. With that, let’s compare them across the education loans by the banks.

Assuming the loan taken up has,

  • Loan Amount: S$20,000
  • Loan Tenure: 6 years / 72 months
BanksPOSB BankPOSB Bank -
Preferred Institution
OCBC FRANKRHB/ Maybank -
Local Institutions
RHB/ Maybank -
Overseas Institutions
CIMB
Processing Fee
(A)
3%3%2.5%2%2%2%
600600500400400400
Interest Rate (p.a.)5.88%4.6%4.5%4.78%4.88%5.39%
Monthly Repayment
(B)
330318317320321326
Total Cost (S$)
(A + 72B) - C
4,3843,4963,3593,4403,5123,872

*Note: RHB and Maybank has the same costs for both Local and Overseas Institution.

Cheapest Education Loan – Local Institutions

Based from the calculation above, the education loan with the lowest total cost required are

  • Option 1: OCBC FRANK Education Loan
  • Option 2 and 3: RHB and Maybank
 Option 1:
OCBC FRANK Education Loan
Option 2 or 3:
RHB Monthly Rest Education Loan
Option 2 or 3:
Maybank Education Loan
Processing Fee2.5%2%2%
Interest Rate (p.a.)4.5%4.78%4.78%
Max. Tenure8 years10 years10 years
Min. LoanS$1,000S$3,000S$5,000
Max. Loan10X your monthly income capped at S$150,0006X your monthly income capped at
S$100,000
8X your monthly income capped at
S$200,000
Late Payment FeeS$5010.7%3% (min. S$30)
Early Repayment Fee1% of loan prepaid1% of loan prepaid1% of loan prepaid

Cheapest Education Loan – Overseas Institutions

  • Option 1: OCBC FRANK Education Loan
  • Option 2: POSB Further Study Assist
 Option 1:
OCBC FRANK Education Loan
Option 2:
POSB Further Study Assist
Interest Rate (p.a.)4.5%5.88% / 4.6% (preferred institutions)
Max. Tenure8 years5 years / 10 years (preferred institutions)
Min. LoanS$1,000S$2,000
Max. Loan10X your monthly income capped at S$150,0006X your monthly income capped at
S$80,000
Late Payment FeeS$50S$30
Early Repayment Fee1% of loan prepaidNil
Additional Requirement
Annual Income Required for GuarantorS$24,000S$24,000
Applicant Age17 and above17 and above

Cheapest Education Loan for Part-time Students

Working and studying part-time is very taxing in itself, yet with all these loan requirements to fulfil can be a huge headache.

Low Minimum Income Required

Here are some education loans with a low minimum income required for part-time students you can consider:

  • Maybank Education Loan
  • POSB Further Study Assist
 Option 1:
Maybank Education Loan
Option 2:
POSB Further Study Assist
Interest Rate (p.a.)4.78% (local) / 4.88% (overseas)5.88% / 4.6% (preferred institutions)
Max. Tenure10 years5 years / 10 years (preferred institutions)
Min. LoanS$5,000S$2,000
Max. Loan8X your monthly income capped at S$200,0006X your monthly income capped at
S$80,000
Late Payment Fee3%
(min. S$30)
S$30
Early Repayment Fee1% of loan prepaidNil
Requirement for Applicant
Annual Income RequiredS$18,000S$18,000
Applicant Age18 and above21 and above

Maybank does offer the cheapest loan available with a low minimum income requirement. However, if you are enrolling in POSB’s preferred institutions, POSB Further Study Assist would be a better choice.

Both of which has an income requirement of S$18,000 for the applicant, which amounts to S$1,500/month.

Repayment Methods

There are banks that provide various methods of repayment to better fit your current financial situation.

  • If you are tight on cash while pursuing your studies, RHB allows you to defer you payment until upon graduation.
  • All three banks allow you to pay interest only while you are studying, and continue your monthly instalment upon graduation.
 OCBC FRANK Education LoanRHB Monthly Rest Education LoanMaybank Education Loan
Repayment Methods1. Standard
Monthly instalments = Principal + Interest, once your loan is disbursed.
1. Standard
Monthly instalments = Principal + Interest, once your loan is disbursed.
1. Standard
Monthly instalments = Principal + Interest, once your loan is disbursed.
2. Graduated
While Studying: Pay Interest Only
Upon Graduation: Monthly instalments = Principal + Interest
2. Graduated
While Studying: Pay Interest Only
Upon Graduation: Monthly instalments = Principal + Interest
2. Partial Repayment
While Studying (or up to 3 years whichever is earlier): Pay partial instalments
Thereafter: Monthly instalments = Principal + Interest
3. Graduated Plus
While Studying + 1 year after Graduation: Pay Interest Only
Third Year Onwards: Monthly instalments = Principal + Interest
3. Deferred
(for full-time local study only)
While Studying: No payment required
Upon Graduation: Monthly instalments = Principal + Interest
3. Interest Servicing
While Studying (or up to 3 years whichever is earlier): Pay only interest
Thereafter: Monthly instalments = Principal + Interest
NOTE: For Graduated and Graduated Plus, the loan tenure includes the period of study.

Other Alternatives

Of course if you are not in a hurry to get your degree, you can start by working for a few years and saving up to further your education!

We hope that this article will aid you to choose the education loan that will benefit you and your financial situation the most. Knowing that you will have to spend some time of your career clearing your student loan debt, it is important to ensure that you have chose the most cost-effective scheme for yourself.

If you do encounter any scenarios, do share with us on the Seedly Community platform where our Community will gather to help you in your situation. (Don’t worry, you can choose to remain anonymous too!)

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