Education is a necessary expenditure as well as an investment you have to make for yourself or for your children. However, finding quality education can set you back by thousands of dollars. Add to it the travel, and accommodation costs in case of studying abroad, and you are looking at a huge expense.
There are many banks in Singapore that help you or your children achieve their dreams by financing the course fee. CPF Ordinary Account (OA) can be used to get a subsidy on education for yourself, your spouse, your children and even your relatives in special circumstances. However, if you have low funds in your CPF account, help from banks become important.
POSB offers a chance to assist you to study further. The education loan offered by POSB is called POSB Further Study Assist. It is a type of personal loan where you do not have to provide any collateral.
POSB charges an interest rate of 5.88% p.a. on the Further Study Assist loan and a 3% processing fee.
For an approved amount of S$10,000, the amount disbursed after deduction of the processing fee would be S$9,700. Here is a table showing the break-up of the instalments for S$9,700 for a period of 5 years:
|Tenor||Instalment to be paid each month||Interest rate (calculated on a monthly reducing rest basis)|
Foreigners are not eligible to apply for the POSB Further Study Assist Loan.
Here is a table showing the various fees and charges that will be levied on your loan:
|Type of Fee||Fees and Charges|
|Processing fee||3% of the amount that is approved|
|Late payment fee||S$30 on the amount overdue will be applicable after the first day of the month|
|Disbursement fee||Nil, but the amount is disbursed after deducting the processing fee.|
|Early repayment/Prepayment fee (full/partial)||Nil|
|Eligibility Criteria||Eligibility Requirement|
|Nationality criteria for students||Singaporean or Permanent Residents|
|Nationality criteria for guarantors/joint applicants||Singaporean or Permanent Residents|
|Age criteria for guarantor||From 21 years to 55 years|
|Age criteria for applicant||From 17 years to 55 years|
|Income criteria for guarantor||S$24,000 p.a.|
|Income criteria for applicant||S$18,000 p.a.|
|Additional criteria requirement for guarantor||Should be a person from immediate family and not be an existing applicant or guarantor of POSB Further Study Assist.|
You could visit the website of POSB and navigate to the personal banking section. When you find POSB Further Study Assist, click on Download Form and take a print out, fill the details and submit it to the bank. Alternatively, you could visit any of the branches to apply for this loan.
Repayments on your loan will start the next month after the loan is approved. The first day of every month is when you need to make the payment. There will be one designated POSB/DBS savings account from where the instalment will be deducted. This account is called the Loan Servicing Account.
Q. When do I need a guarantor?
A. If you are below 21 years old and intend to study as a full-time student, you would need a guarantor. This is mainly because at that age you might not have an annual income of S$18,000 or a high credit limit.
Q. Can I repay after finishing my studies?
A. No, you are required to start repaying starting from 1 month after the loan approval.
Q. Will my interest rate change after approval if you have changed it?
A. No, the interest rates are fixed in the beginning of the tenor and will continue to remain so throughout the tenor.
Q. How many guarantors are allowed?
A. You can have only one person as your guarantor.
Q. How long will it take to process my loan application?
A. POSB will take around 7 business days to process your loan and you will be informed by SMS about the approval/rejection. In case you have forgotten to submit any document, the process will take longer.