02 January,2017
Table of Contents
Singapore is a vibrant country presenting opportunities galore for the working professional. Therefore, it comes as no surprise that students from all over the world flock to Singaporean universities so that they can secure for themselves a fledgling career after graduation. However, like most popular education destinations, Singapore too can be expensive to study in, requiring you to take a loan to support your education. In this blog, we’ll provide you with all the information you need before taking an international student loan in the country.
A general set of rules applies for international students who wish to take education loans in Singapore. These rules may be slightly tweaked by universities and banking institutions that offer loans to students. Here are the general eligibility criteria –
• The minimum age limit for education loans in Singapore is 21 years, and anyone who is 21 or above can apply for a student’s loan
• Next, the borrower’s per capita income (or PCI) must be a minimum of $12,000 to $30,000 (this vast range has been presented as different lenders may have different requirements. However the minimum amount will fall within this range)
• The student himself or a parent or a relative need to act as a sponsor to the loan in order to get the loan (this way it’s not necessary for you to have the above PCI yourself, your sponsor or guarantor having such a PCI will qualify)
• Maximum two sponsors will be allowed for an educational loan
• You also get the choice of nominating a guarantor
• Your guarantor will be responsible for the repayment of the loan shall you fail to do so
• For your guarantor to qualify, he or she must have an annual income of a minimum of $30,000.
Different Universities may put an Added Restriction; wherein you may fail to qualify if you haven’t received certain grants. For example, Singapore Tech University has made it mandatory for international students to be recipients of MOE Tuition Grants so that they can qualify for the loans offered by this college.
The various kinds of loans available in this country for students can be divided into two broad categories. In the first category, the loan is calculated on the basis of the interest rate (monthly rest or flat rate) and in the second category; the loan amount is calculated on the basis of the duration (short-term or long-term). Here are the four types of education loans you can take –
• Monthly Rest Loan
In this type of a loan, the interest rate is not fixed. It varies each month depending upon the balance remaining after each monthly repayment. This can prove to be beneficial for most borrowers as it’ll be much more affordable than loans which have a fixed interest rate. However, be cautious when making your choice as certain banks may display both the monthly rest as well as fixed rates of interest. So enquire about your loan package thoroughly.
• Flat Rate Loan
As the name suggests, for this type of loan you will have a fixed rate of interest. This rate is calculated on the entire amount of your loan at the very beginning. The entire amount of your interest payments is calculated this way so that you have a good idea of the repayments you have to make from the start. Flat rate loans are generally more expensive than other types, though.
• Emergency Aid
Emergency aid (also known as short-term loans) is provided to the student by his or her university if the student faces an unexpected financial adversity. This type of a loan can be used by you to either pay your monthly tuition fee or to cover your day to day living expenses, including an educational trip you have to undertake (this can vary from university to university). To qualify for this loan, your household income should not be above a specified limit (generally, it’s very low, for example, $850 or something in that range). The tricky bit over here is the residency criteria which can be different for different applicants so be sure to check with your university.
• Long-term loans
Long-term loans that cover the payment of your entire tuition fee are offered by both banks as well as educational institutions. For a long-term loan, you need to have a guarantor (unlike short-term loan where it’s not a necessity). Even a long-term loan can be used to pay for your living and other expenses such as books etc. To be eligible for this loan, though, you need to be enrolled in a university for a full-time course. However, if you’re paying the full fees on your own, you will not be eligible for a long-term loan. An interest rate will be charged by banks. However, certain universities may offer the loan interest-free.
Do contact your university or your bank for further details. Your local bank in your home country may also have certain loan plans available for studying in Singapore so be sure to check with them too.
Several universities offer very flexible loan plans for students. Here’s a list of the university loans you can get as an international student in Singapore. We’ve talked about each loan in detail; for further information, you can always refer to the university’s website.
Nanyang Technological University offers its students financial assistance in various forms. You can opt for study loans, tuition fee loans, etc. The eligibility criterion for each of them is more or less the same. You must be availing either one these schemes: CPF Education Scheme, Tuition fee loan, Mendaki Loan or Mendaki Tertiary Tuition Fee Subsidy. Your PCI should not be lower than $1,200. However, if you’re on scholarship, you will not be considered eligible for any loan from this university. Also, you should not be in your final year if you’re applying for a loan.
Now let’s take a look at the individual financial assistance programs offered by this university.
• NTU Study Loan – This loan starts bearing interest after the student graduates. Apart from a discounted tuition fee, students can also expect to get a living allowance of either $1,200 or $2,400 or even $3,000 depending on the rules of the university. This allowance will be given for each of your academic years. You can expect the loan to be disbursed in the first and the second semesters.
• NTU Student Loan – You can only avail this loan one time during your entire course. The amount you will get can go up to a maximum of $2,000. However, you need a guarantor for this loan who should be between 21 to 60 years of age with a sound financial record, and he or she must be a full-time employee. The guarantor should meet a few other requirements as well which you can check out on the university’s website. This loan is interest-free.
• Tuition Fee Loan – To get a tuition fee loan, you just need to be an undergraduate student of the university. However, for international students, the fees is higher, so their entire tuition fee will not be covered by this loan You need a guarantor for this loan too, and you will be charged an average interest rate that is followed in banks such as OCBC, DBS, etc.
Apart from these three, you can also apply for exchange program grants, emergency loans, bursaries, etc. Visit the college website to know more.
The National University of Singapore grants its students loans only after assessing their financial condition. But the good thing is that all the undergraduate students who are a part of the university are eligible for getting this loan. The only catch here is that they have to be the recipients of the MOE Tuition Grant first. The PCI for availing this loan is the same as that considered by NTU, and the interest rates are also an average of those of the banks (again same as NTU). Here too, you need a guarantor to avail your loan, and the funds will only be disbursed after you’ve met all the terms and conditions laid down by the university. The loan amount is only credited to the student’s account twice in a year in the months of September and February.
You can visit the NUS’s website to gather more information on the loans they provide.
Quite like the Nanyang Technological University, the Singapore Institute of Technology, too, provides its students with multiple financial assistance programs. Tuition fee loans, living allowances and various other types of grants and loans are offered by this university. The eligibility criteria are slightly different for each category of loan. However, before you can apply for a loan in this college, you will have to sign a TG (tuition grant) agreement. Not only that, to get a loan from SIT, you also have to work for a company based in Singapore for a total of three years after graduation. In any case, international university goers must be recipients of the MOE grant and only then can they get discounts on their tuition fee. As is the norm, you need to have a guarantor too. Moreover, to avail a study loan from this university, you have to apply for a tuition fee loan. As you can already see, the eligibility criteria are slightly complex for this loan.
(In a study loan, students are eligible to receive a living allowance of $3,600 per year)
International students will have to pay interest on the loans they take from SIT irrespective of their PCI, but the PCI should meet the basic eligibility criteria of being equal to or below $1,200. Having a guarantor is a mandate. The unique thing about SIT is that they also offer their students loans to buy a laptop in case they can’t afford it on their own.
The Singapore Management University offers all its full-time undergraduate students the opportunity to apply for an education loan. Students can take their pick from Tuition Fee Loans, CPF Education Scheme and Study Loans. Having a guarantor is a must who fulfills all the requirements that have been set by the university, and these requirements can be found on the college’s website. Once approved for a tuition fee loan, you can get up to 90% subsidy on your tuition fee. For study loans, this subsidy can go up to 20%, and for CPF Education Scheme, the subsidy can be 100% (these rates are the same for all of the above university loans as well).
Apart from these, an education loan is also offered by SMU in which students can get an amount of up to $5,000. For more details, refer to the college’s website.
The NIE offers loans to students who are pursuing teaching courses at their campus. No matter your nationality, you can apply for BA or BSc education tuition fee loan and get a subsidy of 90% on the tuition fee that is payable by students of Singapore. The eligibility criteria of the guarantor, the method in which the loan amount will be disbursed as well as information on the application process can be found on the college’s website. Graduate students can apply for a loan too, even if they are enrolled in part-time courses. However, if you have a scholarship, you don’t qualify for any of the loans given by the university. The list of courses for which the university offers loans include but are not limited to are masters in applied linguistics, a doctorate in philosophy, masters in education, etc. To know more, you can browse through the college’s website.
These were the top university loans in the country. Private loans are available in Singapore too, offered by reputed banks. However, only Singapore citizens or permanent residents of Singapore are eligible to apply. So if you’re an international student and still wish to get a bank loan to study in Singapore, its best for you to contact the local banks of your home country and find out if they have any plans or schemes.
Note – The interest rates have not been specified since their official websites do not mention a specific rate. This is because the interest rate for these loans is entirely dependent on an average of the interest rates offered by banks such as the OCBC, DBS, etc. The interest rates followed by these loans can fluctuate depending on the rates in the market. Contact the university to get an idea of the exact rates.
Singaporean universities have laid down strict terms on the repayment of loans, and it is important for you to follow them if you do not want to get into trouble. Below is a list of the general terms of loan repayment followed by most of the reputable colleges in Singapore.
• You have the choice of repaying the loan in either fixed monthly installments or as a lump sum amount after you’ve graduated
• The repayment of the loans should start no later than a period of six months after the date of your graduation or once you get a job whichever comes first
• You can repay the loan within 5 years (only if the interest on your loan has been waived) or 20 years (if you have to pay a fixed rate of interest on your loan)
• The repayment of your loan must be made on the first day of every month
• While the repayment amount for each month is fixed, a minimum of $100 per month has to be paid in any case
• If you are unable to repay the monthly installments on time, you will be charged a penalty interest. This penalty interest will be 1 percent per month of your installment
• Shall you leave your course midway i.e. without completing the course, the outstanding loan will have to be paid by you immediately
• You can repay this outstanding loan amount in installments if your university so allows after assessing your present circumstances
• If you plan to make an early payment on your loan, you will have to notify the authorities seven days prior to the repayment. Notification should be done via a written application
• You will be allowed to make partial payments too, and these shall be made only in multiples of $1,000.
Different universities can increase or decrease the loan terms so be mindful of that when chalking out a repayment plan. The repayment of your short-term or emergency loan has to be done within six months since your loan was disbursed. For more specific details, it is best to contact your college.
As for the application process, universities will only allow you to apply once of tuition fee or study loans. Your present financial condition will be reviewed by the college to determine whether you qualify for the loan. You will be required to fill an online form with all the necessary details. Once you’ve been deemed fit, you will need to accept the offer email sent to you on your student ID. The next step is to submit the necessary documents specified and to sign the loan agreement. Your loan will then be granted.
We hoped our comprehensive guide on the education loans in Singapore helped to simplify the complex details of international student loans in Singapore. You can utilize this handy guide whenever you feel the need to.
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