Important Things that You Should Consider Before Applying for Student Loans

Important Things that You Should Consider Before Applying for Student Loans

Students most likely borrow funds if they wish to join a university for higher studies. They need money for tuition fees, living, and other academic activities. If the parents cannot resource their education, the only option is to apply for student loans. Most students feel uneasy getting a student loan because they know it is a debt, and they will have to repay the loan amount with interest after completing their studies. 

However, more than the repayment part, the student’s main worry is the interest rates that build up over the months. They are unable to repay the loan amount while studying because they do not have a job, or a part-time job does not help them earn much to repay the loan. 

It would do well for the students to know that they can procure a study loan and at the same time, feel at ease being fully aware that they would not have to spend a considerable amount of their future salary on repaying the loan.

What are the benefits of applying for student loans from banks?

One of the cheapest loans offered to students by banks and financial institutions is student loans. Financial institutions and banks like DBS allow students to repay the amount after completing their higher studies and when they start earning. The rate of interest the bank charges is very nominal. The benefits of applying for student loans from banks are: 

  • The interest rate is as low as 4.38% p.a. with a 2.5% processing fee.
  • Higher loan amounts of up to 10x 
  • Flexible repayment period of up to 10 years that best suit your needs.

The eligibility requirements for student loans from banks in Singapore 

The eligibility criteria for acquiring a study loan include:

For a borrower

  • The borrower must be a Singapore Citizen or a Singapore Permanent Resident
  • Must be of age between 17 and 65 years at the time of loan maturity
  • Minimum Annual Gross Income should be S$18,000  

For a guarantor

  • A guarantor should be a Singapore Citizen or Singapore Permanent Resident
  • Must have completed 21 years for applying and 65 years at the time of loan maturity
  • The minimum Annual Gross Income of the guarantor must be S$24,000
  • Must be an immediate family member

To avail of a student loan, the applicant needs to provide mandatory documents such as:

  • Photocopy of NRIC both for Applicant & Guarantor (if applicable)
  • Letter of Acceptance copy stating course type and course duration
  • Course fee invoice of payment 

The birth certificate or the marriage certificate is mandatory if the student is applying for a student loan with a guarantor in Singapore. The proof of the relationship between the applicant and the guarantor is essential. The proof of income of the borrower or guarantor (if applying with a guarantor), depending on whether they are salaried, commission-based, or self-employed, should be submitted.

You can start paying back the loan amount after you start earning enough to lead a comfortable life. There is no hurry to pay back the loan just as you start working, as the interest rates are comparatively low.

Students attending university can look for any further-study loan offers. Also, they can be active doing part-time jobs or earn money using their creativity, which will help them acquire student loans for their studies.

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