Education is fundamental to a person’s learning growth where we can attain skills and knowledge. Aside from financial assistance and scholarships the government and organizations give the students to help them with their school costs, applying for a student loan is also one of the solutions of most students who wanted to go to school.
A loan won’t be a loan without interest that is why student loans also have their own interest rate but what is good with this type of loan is that it has its “repayment holiday” where the borrower can start paying the loan after graduation. Repayment holidays are a good chance for students to focus on their studies rather than having difficulties balancing both their studies and student loan repayment.
Loans have different kinds of repayment terms and with a student loan, you can choose three repayment terms which are the following:
- The first option is the repayment holiday. As mentioned, a repayment holiday is when you can start paying your loan after you graduate.
- The second option is when the only amount you will be paying during your studies is just the annual interest then after you are done with your course; you will then start paying the actual loan amount or principal and the interest.
- The last option is when you will start repaying the loan amount and the interest right after you’ve got the loan disbursement. This option might be hard for some especially that they have their studies to attend as well; there are still some who would grab this offer because of having a lesser interest rate of 1%.
You might be worried about the interest rate for the student loan. If you are going to compare student loan interest rate, it is actually lower than a personal loan but also higher than a home or mortgage loan.
Most banks and some legal moneylenders in Singapore that offers student loans have fixed interest rate where the rate of your interest will be the same until you finish paying the loan which is usually about five to seven years. There are also others who have their floating interest rate where the bank can change your loan’s interest rate depending on the standard interest rate in a certain timetable.
Just like with other loans in Singapore, applying for a student loan may also require some fees for the borrower. A processing fee is a charge the borrower will pay the lender for his or her loan approval. There are some other banks as well that doesn’t charge any processing fee so you can ask their representative that maybe they can just have it waived for you.
There are some cases where banks would allow no further prepayment penalties for those borrowers who weren’t able to pay their student loans after their contract was finished as long as they are going to settle the loan using their own sources.
You may also choose to transfer your prepayment penalty to another bank which sometimes happens in student loans but most banks would charge another 2% interest rate from your outstanding balance for this.
Expenses covered by education loan
Enrolling to school may require several expenses and these expenses may be included on your loan; depending on the bank you are have applied. The usual expenses that may be charged to the bank are the following:
- Examination and laboratory fees
- Travel expenses for students studying abroad
- Purchase of uniforms and books
- Fees payable to school
Aside from these, there are still some other school expenses that the bank can pay on your behalf and would just add it in your student loan. Most banks that offer student loans are paying 80% to 90% of a student’s overall school costs.
If you are able to obtain a scholarship but there are additional school costs that you can’t afford to pay, student loans are also applicable for this kind of situation; as long as it is school related, you can always get a student loan.
There were also instances when you wanted to attend a seminar or workshop that would require you to spend money for the registration and other fees the program has, you may get a student loan for this too.
With all the banks in Singapore that offers student loans, it is definitely the best if you are going to do your own bank survey first and check which one has the most benefits and would help you get the college degree you always wanted.
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