Tertiary students seeking a tuition fee loan in Singapore can tap on the Ministry of Education’s Tuition Fee Loan. They can approach DBS or OCBC to apply, depending on their course of study.
Like in any advanced country, higher education in Singapore doesn’t come cheap.
Tuition fees for tertiary education such as university degrees and polytechnic diplomas typically cost upwards of several thousand dollars, and even more for specialised courses like medicine, dentistry, architecture and music.
Thankfully, tertiary study is heavily subsidised for Singapore citizens, which help make diplomas and degrees much more affordable. But even with subsidies, the tuition cost of a university degree can still run into several thousands of dollars each year.
Just take a look at the tuition fees of some of the more popular degree courses in Singapore.
|Course||Tuition fee for Singaporeans (per year, with subsidy)|
|Humanities and Sciences||S$8,250|
|Design and Engineering||S$8,250|
To help offset these eye-watering high costs, the Ministry of Education Tuition Fee Loan was created.
It is the go-to loan (in fact, it’s the only loan) for those looking to fund their tuition fees when studying in local universities and polytechnics in Singapore.
So how do tuition fee loans in Singapore work? That’s what we’ll be covering in this article.
At-a-glance: Singapore tuition fee loans
|What is a tuition fee loan?||A higher education loan issued by the Ministry of Education (MOE).|
It can be used to pay for university and polytechnic courses in Singapore, after subsidies.
The MOE Tuition Fee Loan is administered by OCBC and DBS.
|What is the interest rate?||4.75% per annum. |
Note that no interest is charged on your loan during the course of your study.
|How much can I borrow?||University degrees: Up to 90% of the tuition fees|
Polytechnic diplomas: Up to 75% of the tuition fees
|What is the loan tenure?||University degrees: Up to 20 years |
Polytechnic diplomas: Up to 10 years
|Who is eligible for the tuition fee loan?||Students who are studying full-time subsidised undergraduate and postgraduate programmes in the autonomous universities.|
Singapore Citizen students who are studying part-time subsidised undergraduate programmes in the autonomous universities.
Students who are studying full-time in any of the polytechnics.
|Is a guarantor required?||Yes.|
The guarantor should be between 21 and 60 years old, and must not be an undischarged bankrupt.
They should have the same citizenship status as the borrower of the loan.
|How to apply?||NUS or NTU students: Approach DBS or OCBC|
SMU students: Approach the institution
All other students: Approach DBS
Understanding tuition fee loans
What is the interest rate for tuition fee loans in Singapore?
The tuition fee loan interest rate in Singapore is 4.75% per annum, as at May 2022.
This interest rate is derived from an average of the prime lending rates of three leading banks — DBS, OCBC and UOB — which you can view on this page.
At present, the prime lending rates are as follows.
|Bank||Prime lending rate (per annum)|
|Tuition fee loan (average of the three)||4.75%|
What can I use a tuition fee loan for?
You can use a tuition fee loan to cover the costs of your university degree or polytechnic diploma courses. This applies to:
- Full-time study of undergraduate or postgraduate degrees
- Part-time study of undergraduate or postgraduate degrees (Singapore Citizens only)
- Full-time study of polytechnic diploma courses
The good news is that the tuition fee loans may be applied on subsidised tertiary courses — this helps to make higher education available to the largest swath of the population as possible.
How much can I borrow, and for how long?
For university degrees, you can borrow up to 90% of the tuition fees, after subsidies. You can repay this loan over a maximum of 20 years.
For polytechnic diplomas, you can borrow up to 75% of the tuition fees, after subsidies. The maximum loan tenure for diplomas is 10 years.
Note that you do not have to borrow up to the maximum loan limit — you can borrow lesser amounts if you wish, according to your financial ability.
Repaying your tuition fee loan
Tuition fees loans in Singapore are disbursed on a deferred basis — i.e., you do not have to start repaying your loan immediately. Rather, you can wait until you complete your studies to pay down your loan.
|Commencement of payment||University degree: 2 years after graduation|
Polytechnic diploma: 1 year after graduation
|Minimum instalment payment||S$100|
|Late payment fee||1% interest|
As shown above, you have a grace period of one or two years before you need to start repaying your tuition fee loan, depending on whether you’re taking a diploma course or a university degree.
If you do not start paying even after this grace period is over, you’ll be charged an additional 1% interest on your loan, which will add up over time.
Hence, it is preferable to start paying down your loan as soon as possible; the minimum payment of S$100 per monthly instalment makes this quite manageable.
In fact, here’s a tip that you can use to pay off your loan faster.
Note that no interest is charged on your loan throughout the duration of study. Therefore, every dollar you pay back during the interest-free period will go purely into reducing the principal of your debt.
A smaller principle means you’ll pay less interest in total — compare 4.75% per annum on a S$10,000 loan to the same rate on a S$12,000 loan, say. This, in turn, reduces the size of your total debt. So, if possible, try to start paying down your loan while you’re studying — even a small amount will go a long way.
How to apply for a tuition fee loan in Singapore?
If you are in need of a tuition fee loan, you may apply for one at either of the two commercial banks that are administering the loan — OCBC or DBS.
This will depend on your course of study, and in some cases, the institution at which you are taking up the course.
Here’s a quick reference.
|Type of applicant||Where to go for tuition fee loan|
|NUS or NTU student||DBS or OCBC|
|All other tertiary students||DBS|
Conclusion: DBS vs OCBC — which tuition fee loan should you choose?
There is actually only one tuition fee loan in Singapore, which is offered by the Ministry of Education.
While the loan may be administered by DBS, OCBC or SMU, all aspects of the loan are the same. Hence, it makes no difference where you are getting your tuition fee loan from.
Besides, as detailed above, you may not have a choice as to where to go for your tuition fee loan.
However, if you’re an NUS or NTU student and do have a choice, you might probably want to pick a bank that you are more comfortable with.
Read these next:
The Real Cost: How Much Does Higher Education Really Cost in Singapore?
Not Ju$t You: Does A Degree Guarantee Financial Stability?
Guide To Tuition Fee Loans In Singapore – What Are Your Options For Funding Your University And Polytechnic Studies?
Best Education Loans in Singapore 2022
Complete Guide to Tuition Grants in Singapore for Diploma & Undergraduate Courses 2021
By Alevin Chan
An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.