Acquiring Students Loans in Singapore? Find Out What You Need to Know

Acquiring Students Loans in Singapore? Find Out What You Need to Know

August 30, 2022 Off By Ariana Rogers

Students who want to study further join a university or polytechnic in Singapore. Nonetheless, there are several aspects to consider when seeking tertiary education. One of the most essential ones is funding their education, wherein university tuition fees and other expenses related to university education are expensive.

If you want to realize your career dreams, you need to find ways to finance your university education. Student loans from banks in Singapore are the best option, for it is common among students to get the monetary assistance to pay their university education expenses, which include tuition fees, everyday expenses, accommodation charges, transportation, etc. 

You can find several leading banks in Singapore offering study loans and they come with different features. Here are some key features of student loans offered by banks.

  • Interest rate

Your choice of a study loan from a bank depends majorly on the interest and processing fee, which differs from bank to bank. It is advisable to look for the one that offers competitive interest rates and processing fees. For instance, DBS/POSB offers Further Study Assist at an interest rate of 4.38 percent p.a. and a 2.5 percent processing fee. 

It is better to keep looking for the latest announcements on promotional offers by banks to get the best interest rate on study loans.

  • Maximum loan amount

When it comes to choosing a study loan, it is essential to know the maximum loan amount a bank will give. The university education expenses differ based on the course and university you wish to join. 

You can find DBS/POSB offering a maximum loan limit of 160,000 SGD or 10 times the combined monthly income of your guarantor and you, whichever is less. Students who want to study abroad can use this maximum loan limit to pay off the expensive tuition fees and accommodation abroad.

  • Flexible repayment period

Knowing the repayment schedule of a loan, particularly a student loan, is important. Most banks in Singapore have different repayment plans, which may be a standard payment or deferred payment option. 

The standard payment option is similar to the one followed by banks in the case of normal bank loans, wherein you have to repay the loan amount with interest in monthly instalments. You can choose this repayment schedule if you have considerable income and savings or financial assistance from your family. 

The deferred payment option requires the student to pay only the interest during their education in the university and repay the principal amount later when the student starts working full-time after their graduation.

For instance, some banks give a flexible repayment period of 10 years suitable to your needs.

What are the eligibility requirements for acquiring student loans?

For a borrower: 

A borrower must be:

  • A Singapore Permanent Resident or Singapore Citizen
  • At least 17 years of age and would become 65 years of age upon the loan maturity
  • Have 18,000 SGD as minimum annual gross income

For a guarantor: 

A guarantor should be:

  • A Singapore Permanent Resident or Singapore Citizen
  • At least 21 years of age and would become 65 years of age upon the loan maturity
  • Have 24,000 SGD as minimum annual gross income
  • An immediate family member

Other than the eligibility requirements, you need to submit the following documents.

For salaried employees:

  • NRIC or National Registration Identity Card (NRIC) and either A. OR B. OR C. OR D.
  • The recent Income Tax Notice of Assessment or the CPF Contribution History Statement of the last 12 months
  • Statement showing the salary credited to the bank account or the most recent pay slip (Computerized) 

For commission-based employees:

  • NRIC and 
  • the CPF Contribution History Statement of the last 12 months or the recent Income Tax Notice of Assessment 

For self-employed:

  • NRIC and Income Tax Notice of Assessment of the last 2 years

Here are the mandatory documents you need to submit:

  • A copy of NRIC for both the applicant and guarantor (if applicable)
  • Letter of Acceptance from the university showing the course type and duration
  • Invoice for paying the course fees
  • Marriage certificate or birth certificate of the applicant showing the relationship with the guarantor

The details given will help you find a suitable student loan to finance your university education and realize your dream of studying a specific course at your choice of university.