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Humanising Finance
February 2017

Taking up an education loan - what to consider?

Are you thinking of pursuing a higher education, such as getting an MBA qualification? Or perhaps going overseas to further your studies, for example to pursue your interests in a new field? One of the factors that hold many people back is the issue of how to afford this, as the associated costs are often very high.

Besides using your life-long savings, an alternative is to apply for an education loan. Here are some pointers to consider before taking that step.
How much do you want to pay each month?
Taking up an education loan will mean that you have to commit to servicing the loan at an agreed interest rate for a number of years. You should therefore consider how long you want to take the loan for and how much you are comfortable to pay each month.

Currently in the market, banks are offering interest rates from 4.78% per annum. For selected institutions, preferential interest rates may start from as low as 4.50% per annum. See the table below for an illustration of estimated monthly payments.
Pursuing a local degree
Pursuing an overseas degree
Applied loan amount
Loan period
5 years
10 years
Monthly payment
How do you want to repay your loan?
You can usually choose from among three repayment schemes for your bank education loan. Pick the scheme which suits you best, depending on your financial situation and capabilities:
Standard repayment scheme
Requires you to pay the principal and interest every month
Partial repayment scheme
You pay partial instalment while you are studying, and standard monthly instalments (principal + interest) will commence thereafter
Interest servicing scheme
You pay interest only during your period of study, and standard instalments will commence thereafter
How much can you borrow?
It's also helpful to find out from the bank how much you are eligible to borrow for your education loan. Typically, a bank can loan up to 8X your monthly income, or S$200,000, whichever is lower. In the event that your income is insufficient for you to obtain your desired loan amount, a guarantor may be required.

Other expenses to consider?
Besides the tuition fee, you may require additional financing, for example for school textbooks and accommodation. Some banks offer financing for such expenses at a different interest rate, so do check out if you are eligible to apply for additional financing for these other education-related expenditure.
Furthering your studies is a milestone in your life and at Maybank, we are here to support you in pursuing your dreams. Take the first step to funding your education by calling our customer relationship executives on 1800 629 2265 (1800-MAYBANK) who can advise you further.

Always wanted to find out more about a finance-related issue? Email us at: corporateaffairs@maybank.com.sg
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