Shouldering study expenses is one of the biggest challenges that students face which is why financial institutions make education loans available. This is simply a loan where you borrow money to further your studies. The borrowed funds might be used for tuition fees, accommodation, transport expenses, meal charges and so on. In order to be granted a study loan, you simply have to identify a lending institution and apply for one. In Singapore, education loans are often given to those studying in tertiary learning institutions. Before applying for any loan, it is important to know the different kinds of packages that are available.
Types of Study Expenditure Loans
Education loans can either be sourced from private lenders or federal institutions. You can qualify for a federal loan without a good credit record although private banks in Singapore will often pull a credit background check. Unlike private study loans which have to be paid for shortly after the first disbursement, government loans are usually paid back after you get your first job. The term of the loan can range from one to ten years, but it depends on the amount borrowed and monthly repayment amounts. Most study loans normally have a fixed interest rate. However, there are several private lenders that offer indemnity protection in case of death or permanent physical incapacitation during the life period of the loan.
Qualifications For Study Loans in Singapore
To be eligible for study loan in Singapore, you must be aged between 21 and 62 years, a resident or valid citizen and your annual gross income should be at least $12,000. For those that don’t meet these requirements, there is the option of having a co-signer apply on their behalf. However, your guarantor is required to have at least $30,000 annual income in addition to a good credit history when applying to private lending institutions.
Some of the documents required during the application process include a letter of admission to a learning institution, fees structure, pay slips (for employed students), tax documents (for self employed students) and completed application documents signed by the applicant. Keep in mind that these requirements apply to Singaporean students applying for an education loan.
How to Find The Best Personal Loans
When looking for the best study loans in Singapore, make sure to seek the lowest interest rates. A flexible payment period would also be advantageous. Additionally, beware of lenders that charge additional fees. Depending on the lending policies of your lender, some institutions charge 1% of the principal borrowing amount for prepayments, partial payments or cancelation of the loan before the first disbursement of funds. In other cases, you can be charged a processing fee of up to 2% on the borrowing amount.
Additional charges might be incurred with regards to how the funds are withdrawn. Therefore, bear in mind that interest rates, loan tenure and extra charges are key aspects to compare when looking for an education loan in Singapore.