Are you an Indian student who has been admitted into a prestigious course in an institute of higher learning in Singapore? If you’re looking for fund sources to finance your tuition fee and hostel charges, you could consider this loan option from SBI. The bank offers student loans exclusively for students from India who have been accepted into courses offered by selected educational institutions in Singapore.
This student loan will be secured against a Standby Letter of Credit (SBLC). It will be issued by a branch of SBI in India when you apply for a student loan there. This letter can be obtained by pledging securities such as a property mortgage or a cash deposit in India, acceptable to the bank.
You could borrow up to 100% of the tuition fee with this loan and enjoy a maximum tenure of 10 years. The following section has been dedicated to the closer inspection of each of these features.
Wondering if you should really consider this loan? Here are the special features of this loan:
High Borrowing Limit: You could receive up to 100% of the tuition fee and up to 75% of the hostel fee through this loan. The SBLC amount should be a minimum of 110% of the loan quantum and in Singapore dollars only. This will include interest accumulated until the end of the grace period (moratorium).
Low Minimum Loan Amount: You could borrow as little as S$20,000 through this loan.
Flexible Loan Tenure: You may not be able to stretch this student loan beyond 10 years. This will include the study period.
No Need to Make Loan Payment During the Study Period: You won’t have to service the loan during the course of your study. In fact, you’ll enjoy an additional grace period of 6 months from the time you graduate. This could mean that you’ll enjoy complete peace of mind during the period of study. Also, the grace period could give you enough time to land a job before you start servicing the loan.
Multiple Repayment Period Options: The repayment period could be from 1 year to 5 years. This will include a moratorium or a grace period of 6 months from the time you graduate.
Availability Period: The loan will be available for 3 months from the time the acceptance letter is issued by the bank.
Low Interest Charges: The interest rate applicable will be 4% above the 6-month SIBOR.
Convenient Loan Disbursal: You won’t have to act as an intermediary between the bank and your school. The bank will disburse the loan directly to the school. The time of disbursal will depend on the fee invoice or payment schedule provided to it by the school.
No Processing Fee: The bank won’t charge a processing fee on this loan. This could further add to your savings and make the loan more value-for-money.
Minors Could Be Eligible: You may be eligible for this loan even if you’re aged below 21 years. However, in such a scenario, your parent or legal guardian will have to execute the loan documents.
Interest will be charged on the outstanding loan amount. It will be 4% in addition to the current 6-month SIBOR.
Until the end of the grace period, interest will be levied on a simple-interest basis on the loan amount disbursed. After the grace period ends, you’ll have to start servicing the loan. The monthly instalments will comprise a part of the loan principal and the interest charge.
Currently, the 6-month SGD SIBOR stands at 1.87783%. This means that the current interest rate applicable on this loan is 5.87783%.
Let us make an illustration. In this example, let’s assume that you have a loan of S$50,000. Let us also assume that the study period is 2 years and the grace period is 6 months. Let’s say that you have chosen a tenure of 7 years or 84 months for this SBI loan.
What it means is that loan repayment will commence from the 31st month and stretch for the next 7 years. You’ll enjoy a fixed monthly instalment of S$810, beginning from the 31st month into your loan and going up to the 114th month.
During this period, although the monthly instalment would remain the same, the size of the interest component would progressively go down and the size of the principal component would go up. To elucidate this point better, let’s make a tabular representation of data as follows:
|Month||Monthly Instalment Amount||Principal Component||Interest Component|
If you study the table carefully, you would see that the principal component in the monthly instalment is increasing with every month while your interest charges are decreasing. This trend would remain constant for the entire tenure of the loan.
1. The numbers and figures used in this example are for illustration only. These results are just indicative and may bear no resemblance with actual results.
2. We have used the instalment calculator available on the bank’s website to make our deductions.]
The bank charges the following fees on this loan:
|Type of Fee||Amount|
|Cancellation fee||2% of the amount outstanding at the time of loan cancellation|
|Early redemption penalty||2% of the amount outstanding|
|Default fee||An additional interest of 2% on the amount overdue|
Before you ask the bank to process your application, you should probe the following points carefully:
To be eligible for this loan, you’ll have to satisfy the following conditions:
You’ll also have to submit the following documents for verification:
Want to apply? Use any of these modes listed below to complete the process:
Securing admission to a top school in Singapore could require a lot of discipline, dedication, and effort. Would you want to encumber yourself any further with money problems? You need not. With this loan on your side, you could push those worries out of your head and enjoy complete peace of mind until you finish your study course. Best of luck!