Get The Best Education Loan Interest Rate 2024

Wondering which bank has the best Education Loan rates in Singapore? Compare the best Education Loan Interest rates with MoneySmart’s student loan calculator and comparison tool. That way, you can better plan out the repayment schedule for your university fees. Read More
10,000 personal loan Paid over 3 years
S$
We found 4 Personal Loans for you!
Maybank logo

Per Month

S$315

Per Month
Interest Rate
From 4.5%
Total Amount Payable
S$11,350
Processing Fee
S$225
Per Month
S$315
Read More
POSB logo

Per Month

S$314

Per Month
Interest Rate
From 4.38%
Total Amount Payable
S$11,314
Processing Fee
S$250
Per Month
S$314
Read More
OCBC logo

Per Month

S$250

Per Month
Interest Rate
From 4.5%
Total Amount Payable
S$11,350
Processing Fee
S$250
Per Month
S$250
Read More
Maybank logo

Per Month

S$315

Per Month
Interest Rate
From 4.5%
Total Amount Payable
S$11,350
Processing Fee
S$225
Per Month
S$315
Read More

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Best Education Loans In Singapore

Whether you're a student or a mid-career professional transitioning back to academia, the expense of pursuing further education can be a substantial amount every year. This financial commitment can get a little overwhelming at times. In Singapore, we are fortunate that the government does provide some assistance in the form of tuition fee loans, study loans and bursaries in collaboration with many educational institutions here.

If you're not a Singapore Citizen, there are also many study loans by banks which are available, and such loans offer a more extended repayment period to make managing your fees more feasible. Let's take a look at which education loan options are most suitable for you.

What Is An Education Loan & How Does It Work?

In Singapore, the government significantly subsidises the cost of education in various institutions, especially for Singaporean students admitted to publicly-funded Institutes of Higher Learning. Most students are responsible for paying the residual fees. For those requiring financial assistance with such fees, Government bursaries and institutional financial aid are accessible. Additionally, for further support, education loan options like Tuition Fee Loans and Study Loans are also available.

Tuition Fee Loan (TFL) and Study Loan (SL) in Singapore

Both TFL and SL are financial assistance programs provided by the Singaporean government to support students from Singapore in funding their higher education. However, they differ in terms of coverage and eligibility. Below is an overview of each type of loan.

Tuition Fee Loan (TFL)

  • Covers up to 90% of the subsidised tuition fees for Singaporean students attending universities and polytechnics.
  • Interest-free throughout the duration of the study.
  • Repayment commences after graduation, with interest charged at the average prime rate of DBS, OCBC, and UOB.
  • Minimum monthly repayment set at $100.
  • Repayment period extends up to 20 years.

Study Loan (SL)

  • A means-tested loan that covers the remaining 10% or 20% of subsidised tuition fees, depending on household income.
  • May also include a living allowance of up to $3,600 per year.
  • Interest-free during the study period.
  • Repayment starts after graduation, with interest charged at the average prime rate of DBS, OCBC, and UOB.
  • Minimum monthly repayment set at $100.
  • Repayment period extends up to 10 years.

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Tips For Picking The Best Education Loan

Assess your needs

From course and institution to the loan amount, consider the total cost, including tuition fees, living expenses, books, and any other miscellaneous costs, and borrow only what you need. Keep in mind a loan is not free money; it comes with interest.

Compare interest rates

Understand the difference between flat vs. reducing balance rates. Flat rates may seem lower, but reducing balance rates often end up being cheaper as you pay interest on the reducing principal amount. In addition, look at the Effective Interest Rate (EIR) for a true comparison as it includes fees and the loan repayment schedule.

Understand the fees and terms

Some banks charge a processing fee, while others don't, so check in detail with your preferred bank and note the prepayment penalty if you intend to pay off the loan early, and also, the repayment period required. Longer repayment periods mean smaller monthly instalments but more interest in the long run.

Consider the repayment flexibility

While certain loans allow you a grace period where you don't have to make payments while you're studying, interest may still accrue. Thus, it is important to check with the bank if you can make partial repayments during your study to reduce the overall interest.

Look for subsidies or discounts

Some financial institutions offer promotional rates or subsidies for certain courses or institutions as they may have a collaboration with certain banks that offer special rates to its students. Moreover, you may apply for some government-subsidised loans or financial aid programs if you meet the eligibility criteria. These often come with lower interest rates and more favourable terms.

Read up on reviews

Look for reviews or ask friends or family about their experiences with the bank or lender and be sure of the lender's reputation and customer service style and speed, as you'll be dealing with them for the duration of your loan.

Evaluate insurance options

Some education loans come with insurance to cover unforeseen circumstances like illness or accidents. It helps to be aware of such coverage, understand the terms and decide if it's beneficial for you, as such insurance coverage is usually helpful if it’s part of an overseas education loan where there will be more uncertainty due to your distance away from home.

Future income consideration

Consider the potential income you'll earn after completing your course and ensure your future income can comfortably cover your loan repayments as you do not want to end up struggling to pay off a loan which you cannot cope with. If you're unsure, seek advice from a financial advisor such as our MoneySmart’s team of financial experts who can provide personalised advice based on your financial situation and needs.

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Pros & Cons Of Education Loans Vs. Personal Loans

ProsCons
Education Loan
  • Education loans generally offer lower interest rates compared to personal loans. 
  • Many education loans provide a grace period where repayments are not required while you are studying, and sometimes for a short period after graduation. 
  • Education loans often have longer loan tenures, resulting in lower monthly repayments. 
  • Education loans are tailored to cover tuition fees and other education-related expenses such as digital devices, course materials and living expenses which most personal loans may exclude.
  • There are certain usage restrictions as the funds from an education loan can typically only be used for educational purposes. 
  • The loan amount might be limited to the cost of tuition and other approved educational expenses.
  • A guarantor is usually required, depending on your age, whether it is full-time or part-time studies, and if you are applying for a loan amount exceeding your eligible credit limit, a guarantor is most likely necessary.
Personal Loan
  • There’s greater flexibility in usage as personal loans can be used for any purpose, not just educational expenses. This can be beneficial if you need funds for a variety of needs including living expenses, or to cover other costs not included in education loan coverage.
  • The approval and disbursement process for personal loans is generally faster, which can be crucial if you need funds urgently.
  • Personal loans usually come with higher interest rates compared to education loans. 
  • There’s usually no grace period as repayments for personal loans typically start immediately after the loan is disbursed.
  • Shorter loan tenures is one feature that most personal loans have. Personal loans usually have to be repaid over a shorter period compared to education loans, leading to higher monthly repayments.
  • A guarantor is not required most of the time.

Frequently Asked Questions

What is the difference between Tuition Fee Loan (TFL) and Study Loan (SL) in Singapore?

Both the TFL and SL are financial assistance programs provided by the Singaporean government to support students from Singapore in funding their higher education. However, they differ in terms of coverage and eligibility. The TFL covers up to 90% of the subsidised tuition fees for Singaporean students attending universities and polytechnics while the SL is a means-tested loan that covers the remaining 10% or 20% of subsidised tuition fees, depending on household income.

Which education loans are the best in Singapore?

There are no “best” loans for your education in Singapore as each student’s needs will be different. It is more important to find one that is most suitable for you, you may refer to our “Tips For Picking The Best Education Loan” in the above section or take a look at MoneySmart’s recommended education loans including POSB Further Study Assist Loan, OCBC FRANK Education Loan, Maybank Education Loan (Local) and Maybank Education Loan (Overseas).

Do education loans offer better interest rates than personal loans?

Yes, education loans generally offer lower interest rates compared to personal loans.