Cash woes? A personal loan to the rescue!

    Things to Know Before Applying for Student Loans

    Most banks will charge you a certain percentage of the loan disbursal amount as processing fee. CIMB, for example, charges 1% of the approved loan amount as processing fee. OCBC, on the other hand, charges 2.5% of the approved loan amount as a fee for processing. POSB charges a processing fee of 2% for students enrolled in a preferred institution and 3% for other applicants.

    • Prepayment charges:

    While most lenders won’t charge you a fee on prepayment or early redemption of your loan, some may levy a charge. You’ll have to carefully look for it when going through brochures and websites to gather information about student loans. POSB, for example, charges no fees on prepayment of your loan. Maybank charges a prepayment fee on its study loans. CIMB charges 1% of the total amount prepaid as early redemption fee. Check with the lenders to learn more about prepayment terms and conditions.

    • Exclusions:

    Most education loans will include a list of exclusions. It may or may not be mentioned on the bank’s website. If you don’t find a mention on the website, you may contact the respective lender to check if they have exclusions or not. Exclusions will mainly apply for full-fee paying international students. For example, the NUS Study Assistance and the SIT Study Loan aren’t available to full-fee paying overseas applicants.

    • Late payment fees:

    A lot of lenders charge a late payment fee for failure to pay the monthly instalment amount on time. SIT levies 1% per month on instalments. CIMB charges S$80 for late payment.

    • Cancellation fees:

    Some lenders may levy a cancellation charge while some may not. While it’s not as important a consideration as some of the other points on the list, it doesn’t hurt to have an idea. CIMB charges 1% of the undisbursed amount on loan cancellation while POSB charges nothing, provided you cancel the loan before approval.

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