Best Education Loan 2019

University tuitions have risen dramatically in recent years. For many students, getting an education loan may be essential in order to obtain a degree. Below, we have prepared a list of the best education loans available in Singapore to allow you to compare rates and features.

Table of Contents

Our Picks For the Best Standard Payment Education Loan in Singapore

Education loans come in a few different flavors. Some are specific to domestic institutions in Singapore, while others can help you fund your education overseas. They also come in different repayment methods that could delay your repayment until after you graduate from school and get a job, thus making enough income to pay back your debt. Below, we organize the best education loans available in Singapore by cost and characteristics to help you find the best option for your need. To estimate the total cost, we assume the borrower gets a loan of S$25,000 over 6 years.

Education Loans - Standard PaymentProcessing FeeInterest Rate During SchoolInterest Rate After SchoolMonthly Instalment During SchoolMonthly Instalment After SchoolTotal cost
CIMB Education Loan2%5.39%5.39%S$407S$407S$4,816
Maybank Education Loan2%4.78%4.78%S$400S$400S$4,306
OCBC FRANK Education Loan2.5%4.50%4.50%S$397S$397S$4,198
POSB Further Study Assist3%5.88%5.88%S$413S$413S$5,479
POSB Further Study Assist - Preferred Institutions2%4.60%4.60%S$398S$398S$4,156
RHB Education Loan2%4.78%4.78%S$400S$400S$4,306
Maybank Education Loan - Overseas Studies2%4.88%4.88%S$401S$401S$4,389
RHB Education Loan - Overseas2%4.88%4.88%S$401S$401S$4,389

Best Education Loan for Local Studies

For funding your education in Singapore, we think the below four options are the best education loans available in Singapore. While some may cost a bit more than others, all are cheaper than other options we’ve seen and the difference in their overall cost over 6 years is actually quite miniscule. You won’t go wrong picking any one of these options. Therefore, you could consider other factors like minimum annual income, processing fees, limits on loan sizes and miscellaneous fees to pick one that suits you best.

Cheapest Education Loan for Local Studies: OCBC FRANK Education Loan

Consider this if you require an education loan for a local university

Early Repayment Fee 1% of loan prepaid
Late Payment Fee S$50
Age 17 & Above

Considering the total cost of an education loan, which includes both processing fees and interest payments, OCBC's FRANK Education Loan is one of the best options available in Singapore. The bank charges the lowest available interest rate for education loans at 4.5% and a reasonable processing fee of 2.5%. It also has one of the allows students to borrow up to S$150,000 or 10 times their monthly income, which allows for large loans than other banks. The table below summarizes all the main features of OCBC FRANK Education Loan for those who are interested.

OCBC FRANK Education Loan
Processing Fee2.5%
Interest Rate4.50%
Tenure1-8 Years
Min PrincipalS$1,000
Max PrincipalS$150,000 or 10x monthly income of guarantor
Annual Income Requirement of GuarantorS$24,000

Cheapest Loan for Low-Income Students: Maybank Education Loan

Consider this if you require a education loan with a low minimum income requirement for part-time studies

Early Repayment Fee 1% of loan prepaid
Late Payment Fee 3% min $30
Age 18 & Above

Maybank's Education Loan stands out due to its lowest minimum income requirement for part-time students seeking education financing of S$18,000. It is also one of the cheapest education loans for local studies, due to its low interest rate of 4.78% and processing fee of 2%. The bank offers an even lower rate, of 4.5%, to students that attend its list of selected institutions. Finally, the bank offers some of the largest education loans in Singapore, with a maximum loan size of S$200,000 or 8 times the borrowers monthly income. Please see our table below for detailed breakdown of the product.

Maybank Education Loan
Processing Fee2%
Interest Rate4.78%
Tenure1-8 Years
Min PrincipalUnknown
Max PrincipalS$200,000 or 8x monthly income of guarantor
Annual Income Requirement of GuarantorS$24,000

Education Loan With the Lowest Penalty Fees: POSB Further Study Assist

Consider this if you need an education loan and are worried about making on-time payments

Early Repayment Fee N/A
Late Payment Fee S$30
Age 17 & Above

POSB Further Study Assist is a unique education loan in Singapore. On one hand, it can actually be slightly cheaper than OCBC FRANK Education Loan if you attend one of its preferred institutions. However, it has a maximum loan limit of only S$80,000, which can be quite limiting for a lot of prospective students who are trying to fund their tuition and other expenses during school. With that said, it can be a great option for students who want the flexibility to be a bit late on their monthly payments or even repay their debt early without penalty. It imposes no early repayment penalty fee, while others will usually charge a 1% fee on the amount you prepay. Make sure that your school is included in POSB’s list of preferred institutions to qualify for its low-cost program. Otherwise, this loan could be one of the most expensive ones you can find in Singapore. Below is a table detailing POSB Further Study Assist’s characteristics.

POSB Further Study Assist - Preferred Institutions
Processing Fee2.00%
Interest Rate4.60%
Tenure1-10
Min PrincipalS$2,000
Max PrincipalS$80,000 or 10x combined monthly income of you and your guarantor
Annual Income Requirement of GuarantorS$24,000

Best Education Loan for Overseas Studies: OCBC FRANK Education Loan

Consider this if you require an education loan for university outside of Singapore

Early Repayment Fee 1% of loan prepaid
Late Payment Fee S$50
Age 17 & Above

OCBC's FRANK Education Loan is also the cheapest education loan for international studies. Due to its low interest rate of 4.5%, the total cost of OCBC's education loan is the cheapest option for financing studies outside of Singapore. The bank also allows students to borrow up to S$150,000 or 10 times their monthly income, which allows for large loans that may be necessary for expensive universities abroad. The table below summarizes OCBC's FRANK Education Loan.

OCBC FRANK Education Loan
Processing Fee2.5%
Interest Rate4.50%
Tenure1-8 Years
Min PrincipalS$1,000
Max PrincipalS$150,000 or 10x monthly income of guarantor
Annual Income Requirement of GuarantorS$24,000

Our Top Picks For the Best Interest-Only Education Loan in Singapore

For people who prefer the option of delaying the process of repaying their loans as long as possible, many banks provide an option of "interest only" education loans. This means that the borrower only needs to pay the interest portion of the loan until their study is over (usually about 4 years). For people who may not have the ability to pay more than a few hundred dollars back to the bank per month while attending school, this option can allow them to focus on their studies and worry about repaying their debt after they graduate and get jobs. However, this also means that the borrower ends up paying a lot more to the bank over time. Below is a list of the available options in Singapore. We estimate their costs based on a loan of S$25,000 over 6 years with an interest-only period of 4 years.

Education Loans - Interest ServicingProcessing FeeInterest Rate During SchoolInterest Rate After SchoolMonthly Instalment During SchoolMonthly Instalment After SchoolTotal cost
CIMB Education Loan - Interest Servicing Repayment2%5.99%5.39%S$125S$1,101S$7,918
OCBC FRANK Education Loan - Graduated2.5%4.50%4.50%S$94S$1,091S$6,314
OCBC FRANK Education Loan - Graduated Plus2.5%4.50%4.50%S$94S$2,134S$6,864
RHB Education Loan - Graduated2%4.78%4.78%S$100S$1,094S$6,544
RHB Education Loan - Deferred2%4.78%4.78%S$0S$1,319S$7,157

Best Interest-First Education Loan: OCBC FRANK Education Loan - Graduated

Consider this if you require an interest-servicing education loan

Early Repayment Fee 1% of loan prepaid
Late Payment Fee S$50
Age 17 & Above

OCBC's Graduated FRANK education loan is the cheapest interest-only education loan available in Singapore. It's interest rate of 4.5% is the lowest available and its processing fee of 2.5% is only slightly higher than the lowest in the market. OCBC's graduated education loan allows for up to 4 years of interest-servicing. The bank also offers a Graduated Plus option that offers an interest-only period of up to 5-years. Aside from the method of repayment, the other terms associated with OCBC's Graduated FRANK education loan are identical to the standard payment option we mentioned above. Below is a demonstration of how monthly payments and total cost differ for standard option and interest-only option.

Loan of S$25,000 over 6 YearsOCBC FRANK - StandardOCBC FRANK - GraduatedOCBC FRANK - Graduated Plus
Monthly instalment During SchoolS$397S$94S$94
Monthly instalment After SchoolS$397S$1,091S$2,134
Total costS$4,198S$6,314S$6,864

Best Deferred Interest Education Loan: RHB Education Loan - Deferred Repayment

Consider this if you are unable to make any repayments while you study

Early Repayment Fee 1% of loan prepaid
Late Payment Fee 10.7% on overdue amount
Age 21 - 62 (at loan maturity)

RHB is unique because it is the only bank that allows borrowers to pay nothing while they study at university. The bank offers a deferred repayment structure that allows students to begin repaying their loans after they've completed their studies. While this may sound very attractive to students with very little income, it is important to know that this type of loan is generally much more expensive than standard and interest-first loans. Therefore, this type of loan is best best for students that cannot afford to make any regular repayments during school, but not other students.

Loan of S$25,000 over 6 YearsRHB - StandardRHB - GraduatedRHB - Deferred Repayment
Monthly instalment During SchoolS$400S$100S$0
Monthly instalment After SchoolS$400S$1,094S$1,391
Total costS$4,305S$6,544S$7,157

Study Loan From Your School: DBS, OCBC and UOB

Some public universities and polytechnics in Singapore also provide a loan of their own through DBS, OCBC and UOB. These loans are typically quite cheap & do not charge interest or require repayment until after graduation. Interest rates are average of DBS, OCBC and UOB’s prime lending rates. This loan can be used to pay up to 90% of the subsidized tuition fees (or 75% for polytechnics).

Typically, students who are enrolled in a local university, NIE or polytechnic is eligible for such a loan if they do not fall into any category below:

  • Students receiving any Government/Statutory Board/any school scholarships which cover tuition fees
  • Students receiving full Tuition Fee Subsidy from MENDAKI
  • Students using CPF savings for payment of 100% of the subsidized tuition fees
  • Students on self-funded courses

Below is a list of links to the local institutions and links to their education loan pages for people who are interested in finding more information:

Cost Comparison of Education Loans

Below, we have prepared a graphical comparison of education loans according to their costs. Cost includes both the processing fee and interest payments over the course of the life of a loan. We assume that each monthly payment is paid on time (no early or late payments), and that the loan is taken out at S$25,000 for 6 years.

Comparing the total cost of education loans from major banks in Singapore in terms of total interest cost, categorized by interest type, payment method and domestic vs overseas study, assuming a loan of S$25,000 over 6 years
Cost Comparison of Education Loans in Singapore
Duckju Kang

Duckju is the Senior Vice President of ValueChampion Singapore. He covers the financial services industry, consumer finance products, budgeting, and investing. He previously worked in the financial services industry, including at such hedge funds as Tiger Asia and Cadian Capital.

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