Guide To Tuition Fee Loans In Singapore – What Are Your Options For Funding Your University And Polytechnic Studies?

Between CPF savings, government loans and private-sector education loans, here are six options for financing the expensive tuition fees of university degrees and polytechnic diplomas.

Despite being heavily subsidised, tuition fees for university and polytechnic courses in Singapore can still cost upwards of several thousand dollars. 

And if you’re taking more advanced or specialised degrees, or want to study overseas, your cost will go even higher — easily into the six figures for the latter.

Good thing, then, that there are tuition fee loans you can use to help you finance the high costs of tertiary education in Singapore. 

Here are six options to consider.

Tuition fee loans available in Singapore

CPF Education Loan

You can actually make use of the CPF savings in your own and/or your parent(s) Ordinary Account to pay for your tuition fees. 

This is made possible under the CPF Education Loan Scheme, and should be the default choice for most tertiary students in Singapore.

Using this loan, you can cover 100% of your tuition fees, and have up to 12 years to repay the loan. Also, you have up to one year after graduation before you have to start your repayments.

Pros

• Lowest interest rate of all — 2.5% per annum (prevailing rate for Ordinary Account)
• Open to all students studying at local universities and polytechnics
• Option to waive repayment of this loan, provided the lender is 55 years and above, and has put aside the Full Retirement Sum (S$192,000 at the time of writing)

Cons

• Can only use up to 40% of the balance in the lender’s Ordinary Account, which might not be sufficient to fully cover your tuition fees
• Only applicable for subsidised full-time courses in Singapore, and cannot be used for overseas studies
• Restricted to your first tertiary course only, subsequent diplomas or degrees cannot be paid for using this method

Ministry of Education (MOE) Tuition Fee Loan

If using CPF savings is not an option, you can also try applying for a Tuition Fee Loan, which is offered by the Ministry of Education.

This loan can be used for both polytechnic and university courses, but have different loan amounts and tenures for each. 

For university degree courses, you may borrow up to 90% of your tuition fees, and have a maximum of 20 years to repay your loan. 

For polytechnic diplomas, you may borrow up to 75% of your tuition fees, and may repay your loan over 10 years.  

You may approach your tertiary institution to apply for this loan. Note that you’ll need to start repaying your loan within two years of graduation. 

Pros

• Competitive interest rate of 4.75% per annum
• No admin fee
• Longest loan tenure of up to 20 years
• Can cover up to 90% of tuition fees
• Also applicable for part-time university study (citizens only)

Cons

• Only applicable for subsidised university and polytechnic courses in Singapore
• Cannot be used for study overseas

POSB Further Study Assist 

The POSB Further Study Assist loan is an education loan offered directly by DBS and POSB banks. 

It is not to be confused with the MOE Tuition Fee Loan, which is administered by DBS/POSB and OCBC, depending where you’re taking your tertiary course. 

Currently, this loan offers the lowest interest rate among similar education loans in Singapore. It allows you to loan up to 10x combined monthly income between you and your guarantor, or a maximum of S$160,000.

The longest loan tenure available is 10 years, but you’ll have to start repaying your loan immediately. Depending on the amount payable in each instalment, full-time students may find this difficult to sustain. 

Pros

• 4.38% per annum interest, lowest among bank education loans
• Borrow up to 10x monthly income (max S$160,000) for up to 10 years
• May be used for local and overseas tertiary studies

Cons

• Repayment begins one month after loan approval and disbursement
• Admin fee of 2.5%

OCBC Education Loan

As mentioned in the previous entry, OCBC is also appointed to administer the MOE Tuition Fee Loan, and this is different from its Education Loan. 

Which loan you can apply for will depend on your needs, so take note not to mix up the two.

The OCBC Education Loan lets you loan up to 10x the monthly income of you and/or your guarantor, with the loan amount capped at S$150,000. 

The longest loan tenure available for this loan is eight years; this shorter maximum duration will affect how low your monthly instalment payments can go.

Repayment starts immediately, but at least you can opt to pay only the interest on your loan while studying and up to one year after graduation. 

Pros

• Competitively priced, 4.5% per annum interest
• Borrow up to 10x monthly income (max S$180,000) for up to 8 years
• Can opt to pay only interest while studying and for up to one year after graduation
• May be used for local and overseas tertiary studies

Cons

• Repayment begins one month after loan approval and disbursement
• Admin fee of 2.5%
• Maximum tenure is shorter than with other loans

Maybank Education Loan

The Maybank Education Loan comes with an attractive interest rate of 4.45% per annum, but you’ll need to be quick to take advantage of this promotion, which is ending 31 March. 

You’ll also receive free CapitaVouchers worth up to S$150 if your loan application is approved under this promo. 

In any case, this loan grants you up to 8x your monthly income in credit, up to a maximum of S$200,000. You can take up to 10 years to repay your loan.

Repayment begins immediately (or at least, in the next month after you receive the loan), but you can choose to ease the process with interest-only instalments for the initial 36 months of the loan. 

Pros

• Attractive 4.45% per annum interest rate
• Borrow up to 8x monthly income for up to 10 years
• Highest loan quantum available, up to S$200,000  
• Can opt to pay only interest during your first 36 months
• May be used for local and overseas tertiary studies

Cons

• Repayment begins one month after loan approval and disbursement
• Admin fee only available during application

CIMB Education Loan

One more option to pay your tuition fees is with the CIMB Education Loan, which offers credit up to 8x your monthly income, or a maximum loan amount of S$200,000. You can choose tenures of up to 10 years.  

This loan has an interest rate of 4.78% per annum, which is the highest on the list. However, it offers a slightly lower admin or processing fee of 2%.

Once again, loan repayment will begin immediately, but you have the option to pay only the interest on your loan for the duration of your studies. 

Pros

• Borrow up to 8x monthly income for up to 10 years
• Highest loan quantum available, up to S$200,000  
• Can opt to pay only interest while studying
• Slightly lower admin fee
• May be used for local and overseas tertiary studies

Cons

• 4.78% per annum interest, highest among its peers
• Repayment begins one month after loan approval and disbursement

Things to note when applying for a tuition fee loan

Why do I need a guarantor?

Well, your tuition fee loan is extended on an unsecured basis without collateral, which means the lender has no recourse should you decide to dodge your debt by never coming back after your studies.

Therefore, having a guarantor ensures there is at least one other party around to make good on the debt.

The only exception is if you’re using the CPF Education Scheme — no guarantor is required.

Will taking a tuition fee loan affect my Total Debt Servicing Ratio (TDSR)?

The answer is yes. 

Like all unsecured debt, tuition fee loans and education loans are counted towards your TDSR, which has recently been revised downwards to 55% of your monthly income. 

This carries implications for your future plans. 

Say you’re planning to marry your high-school sweetheart once you complete your Masters, and need to apply for a BTO flat. 

Depending on how high your tuition fee instalment payments are, and along with whatever other financial obligations you may have, you might not be able to get a mortgage large enough to afford the BTO you want.

This is especially likely for those just starting their careers. You may have to delay your wedding until you free up your TDSR enough — either by paying off some debt, or by increasing your income. 

Read these next:
A Cost Guide To School Fees In Singapore: Primary, Secondary, Post-Secondary and Tertiary
Complete Guide to Tuition Grants in Singapore for Diploma & Undergraduate Courses 2021
Not Ju$t You: Does A Degree Guarantee Financial Stability?
Best Education Loans in Singapore 2021
An 8-Step Plan to Saving S$80,000 for University in Singapore