POSB Education Loan Review: Best for Higher Education in Private Institutions
Are inflated tuition fees and sky-high living expenses keeping you away from higher education? POSB Further Study Assist can come to your rescue. You can borrow up to 6x the combined monthly income of you and your guarantor, subject to certain conditions. It can go up to 10x in case of preferred institutions. Flat rates of interest can be as low as 4.6% p.a. The bank also offers flexible tenure options with this education loan.
Preferential Interest Rates, No Early Repayment Charges: Should You Opt for This Loan?
This POSB study loan offers a number of benefits. Some of the most attractive ones are:
High borrowing limit: You can borrow up to 10 times the combined income of you and your guarantor. However, it will be capped at S$80,000.
More than one tenure option: The repayment period for this loan could be between 1 year and 5 years, in general. For students enrolled in study programmes offered by preferred partners, the maximum tenure available is 10 years. With this flexibility, you can choose a tenure that best suits your budget plans.
High interest savings: Enjoy nominal interest rates as low as 4.6% p.a. on this loan if you’re pursuing education at a preferred institution. The interest rate can be as low as 5.88% p.a. if you’re pursuing education from an approved institute of education. With these rates, you can hope to make lower interest payments every month.
Quick turnaround: The processing of a loan application may take up to 7 business days in general.
Immediate intimation on approval: The bank will send you a text message informing you of approval. It will also dispatch, by post, a welcome letter along with a cashier’s order (loan disbursement). The bank may send the cashier’s order between 3 and 5 business days after approval.
No additional charges for early loan redemption: The bank will impose no additional charges on early loan repayment. Therefore, you may be able to save further on interest charges by repaying the loan before maturity.
No fee on issuance of cheques: The bank won’t charge you additional fees for issuance of subsequent cheques.
Enjoy Exclusive Promotional Rates and Processing Fee Waiver for Limited Period
Apply for this loan by 28 February 2019 to enjoy the following special offers:
- A lower applied interest rate of 4.38% p.a.
- A waiver on the processing fee.
The following conditions will have to be fulfilled to enjoy these offers:
- A promotional application form available on the bank’s website will have to be used for application.
- The tenure of the loan can’t be less than 3 years.
- The bank has to approve the loan before 15 March 2019.
- You can’t have an existing Further Study Assist (FSA) loan from POSB/DBS at the time of application.
Make Your Interest Savings Bigger With This Loan
The bank charges different interest rates for preferred institutions and other approved institutions. Take a look at the rates below:
|Preferred Institutions of Education
|Other Partner Institutions
Let Us Illustrate:
Let us assume that you have applied for a loan amount of S$5,000 with a tenure of 5 years. The bank has approved your application and offered you an applied interest rate of 5.88% p.a. Considering that a processing fee of 3% p.a. applies, the actual loan amount disbursed will be S$4,850 [=(5,000-3/100x5,000)].
The following table shows the monthly instalment that will be charged for the tenures 1 year, 2 years, 3 years, 4 years, and 5 years:
|Period of Repayment
||Instalment Amount Every Month
- The numbers used here are for illustrative purposes only and may bear no resemblance to actual results.
- The results may have been simplified for the purpose of easy understanding.
- Interest payable has been calculated using the monthly reducing rest method.]
Fees and Charges That You Are Most Likely to Pay
The following fees and charges may apply on your borrowing:
|Processing fee (one-time)
- 2% in case of preferred partners
- 3% of the approved loan amount for other institutions
|Early repayment fee
|Late payment fee
||S$30, if you don’t pay by the first day of every month
|Loan disbursement fee
||No additional charge for issuance of demand drafts or cashier’s orders
|Request for a change of disbursement amount after issuance of cashier’s order or demand draft
|Request for a change of payee name on a cashier’s order or demand draft
|Some other service fees
- Request for stopping the payment of a cashier’s order: S$15
- Request for stopping the payment of a demand draft: S$35
- Request for re-issuance of a cashier’s order: S$5
- Request for re-issuance of a demand draft: Difference in foreign currency rates, if any, to be borne by you
Don’t Ignore These Points: No Amount Below S$2,000 Can Be Borrowed
Before applying for a POSB education loan, you should contemplate the following:
- A loan amount below S$2,000 may be rejected.
- You can’t borrow more than S$80,000.
- You can’t have more than 1 loan surety.
- Your loan sponsor has to be an immediate family member. You’ll also have to submit proof of relationship with your guarantor.
- Incomplete applications and applications not supported by proper documents may lead to delay in processing.
- A cashier’s order or demand draft sent to you by the bank will have to be presented to your university/college within a month of its issuance.
- You can’t request the bank to credit the loan amount to a bank account of your choice. It will only be disbursed through a demand draft or a cashier’s order.
- The start of loan repayment will commence a month from the time of loan approval.
- An instalment amount will be deducted from a designated POSB/DBS bank account only. Accounts held with other banks can’t be used for this purpose.
- Instalments will be settled on the first day of every month. An insufficient account balance that leads to a loan overdue, will attract a late fee.
- The bank will not issue monthly statements. Call the bank’s hotlines to find out about the outstanding balance on your loan.
- The loan amount, once approved, can’t be changed.
Do You and Your Guarantor Meet the Loan Eligibility Conditions?
You (the applicant) will be eligible if:
- You’re a full-time student aged between 17 years and 50 years OR
- You’re a part-time student aged between 17 years and 20 years OR
- You’re a part-time student aged between 21 years and 50 years.
You’ll also have to satisfy the following conditions:
- You should be a Singaporean or a PR.
- Your gross income in a year can’t be less than S$18,000.
- You’ll need a sponsor if you’re a full-time student or a part-time student aged between 17 years and 20 years.
- You’ll also need a sponsor if you’re a part-time student aged between 21 years and 50 years but don’t meet the minimum income requirement.
Your surety will have to satisfy the following prerequisites:
- He/she should be aged between 21 years and 55 years.
- Only a citizen or PR of Singapore can be a guarantor.
- He/she should be an immediate family member. A parent, a child, a spouse, or a sibling will be considered to be an immediate family member.
- He/she shouldn’t be a surety/applicant for an existing Further Study Assist loan.
- His/her annual gross income can’t be less than S$24,000.
Documents That Have to Be Submitted for the Purpose of Verification
In addition, the following documents have to be mandatorily submitted:
- A copy of both sides of your NRIC. Applies to you (the candidate). May also apply to your guarantor.
- Proof of payment of tuition fees for your chosen course. You could submit the relevant invoice as proof.
- A certified copy of the Letter of Acceptance issued by your institution of education. The letter should clearly indicate the type and duration of the course.
- You’ll have to provide proof of relationship with your guarantor, where applicable.
The following income documents will have to be submitted, too:
If you’re a salaried employee, provide any one of the following:
- Proof of credit of salary to a POSB/DBS account, if applicable.
- A copy of your computerised payslip.
- Proof of contribution to your CPF Account for the last 1 year.
- The most recent copy of the Notice of Assessment (NOA) document issued by the Income Tax department.
The bank may not ask for income documents if you have a salary account with POSB/DBS. However, make sure that your salary has been credited through GIRO into that account for at least 3 consecutive months.
If you’re self-employed, provide a copy of NOA detailing tax contributions for the last 2 years.
If you’re a variable earner or a commissioned employee, provide any one of the following:
Want to Apply? Here’s How You Can
Applying for this loan is easy and convenient. Use any of the methods mentioned below to get the job done:
- Visit a POSB branch nearby.
- Leave your contact details with the bank. Simply fill up an online form. The bank will call you back.
- Send the completed application form to the bank through mail.
Not everybody gets to be lucky enough to hunt down their dreams. However, with this education loan from POSB, you might. Get started today and make the most of this opportunity.