Despite being heavily subsidised, tuition fees for polytechnic and university courses in Singapore are still costly for most students. Besides, the cost gets even higher if you are looking for a more specialised or advanced degree or want to study abroad.
Fortunately, there are tuition fee loans that you can apply for to help finance the high costs of tertiary education in Singapore. In this article, we’ll look at what is tuition fee loan in Singapore, how it works, the types available, and how to apply and qualify.
Let’s dive in.
What Is A Tuition Fee Loan?
A tuition fee loan is a government education loan aimed at helping Singaporean students needing assistance to pay tuition fees.
Students can borrow a tuition fee to cover up to 90% of the subsidised tuition fees paid by Singaporean citizen students. However, the loan doesn’t cover other miscellaneous fees, and there are no income criteria for qualification.
The amount you can borrow depends on your course of study and the school you’re attending. Tuition fee loans are usually given at low-interest rates than other loans and have a longer repayment period. The lengthy period implies that you’ll have ample time to repay the tuition fee loan, and it’ll be more affordable.
However, it’s important to note that a tuition fee loan in Singapore is not available to students attending private schools. Private students will have to borrow a study loan.
Tuition Fee Vs Study Loan
A tuition fee loan is a government education loan aimed at helping Singaporean students needing assistance to pay tuition fees.
Singaporean students in autonomous universities and polytechnics can apply and benefit from the tuition fee that covers up to 90% of their tuition. However, this loan doesn’t cover any other miscellaneous fees, and there is no income criteria qualification for the loan.
On the other hand, a study loan is a government loan for students in Singapore who need assistance to finance their education.
The loan is available for those who’ve already taken up the tuition loan with a gross monthly per capita income of $2,700 or less. Students can use the study loan to finance the remaining fees helping students from low-income families receive a top-quality education.
A study loan can be used to pay for miscellaneous fees such as books, supplies, living expenses, and other related expenses.
Besides, the loan is accessible to students in private universities. Depending on the lender, study loans can be categorised as private student loans.
How Does It Work?
A tuition fee loan covers up to 75% of subsidised fees payable by polytechnic students and up to 90% of the subsidised Singapore citizens’ fees payable to university students. A tuition fee loan is tenable for the complete course duration.
The loan is interest-free during the study, with interest only starting upon graduation and working. The maximum loan repayment period is up to ten years for loans taken by polytechnic students and twenty years for loans taken by university students, with a minimum of $100 per month.
However, if a student leaves the university without completing the course, the outstanding loan immediately becomes due and payable. There is a monthly late payment charge of 1% on installments in arrears.
Tuition Fee Loans In Singapore
There are several tuition fee loans in Singapore.The tuition fee loan also referred to as a tuition grant, is a scheme set up by the Ministry of Education (MOE).
The loan helps students finance their tuition fees in local institutions such as polytechnics, universities, and the Institute of Technical Education (ITE). OCBC and DBS offer the MOE Tuition Fee Loan. The prime lending rates per annum for DBS, OCBC, and UOB are 4.25%, 5%, and 4.75%, respectively.
There’s one tuition fee loan in the country offered by the MOE. While OCBC, DBS, or SMU may give the loan, all loan aspects are similar. This means there’s no difference in where you’re getting the tuition fee loan.
Moreover, you may not choose where to get your tuition fee loan in Singapore. However, if you’re an NTU or NUS student without a choice, you might want to pick a financial institution you’re more comfortable with. The tuition fee loans available in Singapore include the following:
- CPF Education Loan
- MOE Tuition Fee Loan
- POSB Further Study Assist
- OCBC Education Loan
- Maybank Education Loan
- CIMB Education Loan
How To Apply
Different loans have different application methods. For instance, with a CPF education loan, you can use your CPF savings or your parents’ Ordinary Account to pay tuition fees. This covers up to 100% of the fees with up to 12 years to make the repayment.
For the MOE tuition fee loan, you may need to approach the tertiary institution, and you’ll need to start repaying it within two years after graduation. The POSB further study assists loans offered directly by POSB and DBS banks.
Application Steps
- A completed copy of the tuition fee loan application form
- Copy of the blank Letter of Offer
- Passport/NRIC for both the student and guarantor
- Final Offer Letter of Admission or Provisional Offer for new students or Singapore University of Social Science’s student card for the existing students
You should submit the above documents in person at any DBS branch for the loan application before the stipulated deadline.
Tips To Note When Applying For A Tuition Fee Loan
Why Do I Need A Guarantor?
Your tuition fee loan is given to you unsecured without collateral, meaning the lender will need a guarantor in case you default. The only exception is when you’ll be using a CPF Education Scheme where a guarantor is not required.
Will The Loan Affect My Total Debt Servicing Ratio (TDSR)?
The simple answer is yes.
Like all unsecured loans, tuition fee loans in Singapore are counted towards your TDSR. Therefore, the loan could carry implications for your future plans, such as mortgage loans.
This means you’d have to free up your TDSR enough by increasing your income or paying off your debts as you start your career.
Eligibility And Requirements
- A guarantor is needed except for the CPF Education Scheme
- The guarantor must be between 21 and 60 years old
- The guarantor should not be a bankrupt
- Singaporean students will need Singapore Citizen guarantors
- Singaporean/SPR guarantors are acceptable for SPR students
- Singaporean/SPR/non-Singaporean guarantors are acceptable for international students
Final Thoughts
You can use a tuition fee loan or a study loan in Singapore to finance your studies. Students can borrow a tuition fee to cover up to 90% of the subsidised tuition fees paid by Singaporean citizen students.
To learn more about how you can take advantage of these loans, check out U Credit student loan programs to select the best that fits you.
