Whether you enrol in NTU, NUS, SMU, SIM, PSB Academy, MDIS or any other university, not everyone can afford the exorbitant tuition fees. Even the cheapest option is easily a 5-figure sum. Unless your parents are footing the entire bill, it would usually mean that you will need a tuition loan to fund for your tertiary education. So, how do you go about doing it and which is the best option?
In this article, we will discuss the possible options that you can explore, and ways for you to reduce your tuition fees before taking an education loan with one of the local banks in Singapore.
Firstly, Check Your PSEA Funds.
Remember the account that you use to reimburse your OCIP trips? PSEA, also known as post-secondary education account, is mostly left unattended after your junior college or polytechnic days. As a norm, most students would have around S$5,000 left in their PSEA funds by the time they graduate from university. If left untouched, it will be transferred to your CPF-OA when you turn 31 years old. This account earns you interest that is pegged to the CPF-OA account, which is currently 2.5% per annum. Whether you immediately utilise your PSEA funds will depend on whether you take up a CPF education loan or bank education loan. If you are using your CPF (or your parents) to pay for your tuition fees, it is different whether you use your PSEA or CPF in terms of opportunity cost, as the interest rate earned would still be at 2.5% p.a. However, we would recommend you to use your PSEA funds first, as you will need to repay back into your CPF-OA account should you choose to repay your education loans via your CPF.
Next, Check Your Eligibility For Bursaries
Many students have the misconception that bursaries and Edusave awards are only for students up to Junior College level. That is wrong! Tertiary education in Singapore offers bursaries to students as well, so long as you are within the monthly household requirement. As an example, NTU offers bursaries from S$1,350 to S$6,200, depending on the bracket of household income you fall under. Bursaries are offered on a per Academic Year (AY) basis, which means that you can receive S$5,400 to S$24,800 in your 4 years of university education! If you combine this together with your PSEA, you would have up to S$30,000 covered for your education fees, and this is even before you obtain an education loan!
Tuition Education Loan with Banks – As a Last Resort
Now that you have exhausted all means to repay your university fees, it is now time for us to look at the best option for you to obtain a tuition education loan with banks – for free! Yes, banks nowadays offer attractive loans such as 0% interest rate until you graduate or start working. Combining PSEA and bursaries, you are likely able to repay all your tuition fees before you graduate – by working part-time while you are pursuing your bachelor’s degree (we will get to that later). First, let us look at the various tuition loan options offered by banks in Singapore.
Student Loans by FRANK by OCBC (BEST OPTION!)
If you are studying at NTU, NUS or NIE, OCBC offers 0% interest loan while you are studying, which means that it is possible for you to get the loan for free by paying back the loan once you graduate. The interest rate charged would be based on the prevailing market rate, which is expected to be 4% – 4.5% p.a.
In comparison to other bank loan providers, their terms vary according to your tenure and amount of tuition loan, with most charging prevailing interest rates. OCBC would be your best bet if you are looking for an interest free student tuition loan.
As you embark on your university education, the last you would wish for would be financial distractions that will hinder your education pathway. Hopefully, this guide provides greater clarity and insights to repay your student loans soonest possible. If you are still falling short of repaying your loans after this guide, you may consider registering as a home tutor to earn some side income.