POSB Further Study Assist Education Loan Review: How Does it Compare?
POSB Further Study Assist Education Loan Review: How Does it Compare?
ValueChampion Rating 
Pros
- Great rates when attending POSB's preferred institutions
- Lower penalties for late payments
Cons
- Not the cheapest possible education loan
- Not great for oversea studies
Individuals that plan to attend one of POSB's preferred institutions may find POSB as a good source for educational financing. First, the bank offers competitive interest rates to students that attend these institutions. It also charges the lowest late payment fee, which benefits students that may occasionally struggle to make on-time payments.
| Summary of POSB Education Loans |
|---|
| Relatively High Interest Rates: 5.88% |
| Competitive Rates for Preferred Institutions: 4.38% |
| Processing Fee: 2% - 3% |
| Low Late Payment Fee: S$30 |
| Low Minimum Income Requirement: S$24,000 |
Table of Contents
What Makes POSB's Student Loans Stand Out to Borrowers
POSB offers vastly different study loan products based on the schools that students attend. For example, students that attend POSB's preferred institutions are offered cheaper interest rates, a lower processing fee and more flexible loan terms. In fact, these rates tend to be some of the lowest interest rates and fees in Singapore, making POSB's student loans very affordable for these students. However, students who plan to attend other universities are subject to much higher fees and rates.
POSB Loan Features
| Preferred Institutions | Other Universities | |
|---|---|---|
| Interest Rate | 4.38% | 5.88% |
| Processing Fee | 2% | 3% |
| Loan Tenure | 1 - 10 years | 1 - 5 years |
| Maximum Loan Size | 10x combined monthly income (max. S$80,000) | 8x combined monthly income (max. S$80,000) |
Unfortunately, POSB's list of preferred institutions is somewhat limited. For example, it only includes 30 schools and none are international. This can be limiting for students that would like to attend university overseas. However, students that are considering one of these schools should absolutely consider POSB's Further Study Loans.
Total Cost of POSB's Further Study Loans - Preferred Institutions
| Tenure | Processing Fee | Interest Rate | Monthly Payment | Total Cost |
|---|---|---|---|---|
| 5 Years | 2.0% | 4.38% | S$465 | S$3,383 |
| 6 Years | 2.0% | 4.38% | $395 | S$3,974 |
| 7 Years | 2.0% | 4.38% | S$346 | S$4,573 |
| 8 Years | 2.0% | 4.38% | S$309 | S$5,180 |
| Assuming loan of S$25,000, total cost includes impact of fees | ||||
Who Can Apply: Eligibility Criteria
Citizens and Permanent Residents of Singapore between the ages 17 and 50 are eligible for POSB's study loans. All applicants are required to have a guarantor, except for part-time students aged 21 to 50 that earn at least S$18,000 annually. To be an eligible guarantor, individuals must be between 21 and 55 years old, earn at least S$24,000 annually, be an immediate family member of the applicant and not be an existing applicant or guarantor for another POSB student loan.
Complete List of POSB's Preferred Institutions
| Local Institutions | Private Institutions |
|---|---|
| BCA Academy | Asian International College |
| Nanyang Polytechnic | At-Sunrice GlobalChef Academy |
| Nanyang Technological University | Auston Institution of Management |
| National Institute of Education | Curtin Education Centre |
| National University of Singapore | ERC INSTITUTE |
| Ngee Ann Polytechnic | Informatics Academy |
| Republic Polytechnic | James Cook Australia Institute of Higher Learning |
| Singapore Institute of Technology | Kaplan Higher Education Academy |
| Singapore Management University | Kaplan Higher Education Institute |
| Singapore Polytechnic | Kaplan Learning Institute |
| Singapore University of Social Sciences | Lasalle College of the Arts |
| Singapore University of Technology & Design | Management Development Institute of Singapore |
| Temasek Polytechnic | Nanyang Academy of Fine Arts |
| Nanyang Institute of Management | |
| Ngee Ann Academy | |
| PSB Academy | |
| Singapore Institute of Management | |
| TMC Academy | |
| Trent Global College of Technology and Management |
Other Charges and Fees
POSB charges a 3% processing fee, which is higher than those of other banks in Singapore. However, POSB lowers this fee to 2% to students that attend one of POSB's preferred institutions. The bank also charges a late payment fee of S$30, which is the lowest amount charged by banks in Singapore. This can be very helpful to students that may struggle to always make payments on-time. Not only that, the bank also does not charge any fees for early repayment, loan cancellation or cashier fees, making it one of the more flexible student loan lenders.
| Fee | Amount |
|---|---|
| Processing Fee | 2% - 3% |
| Late Payment Fee | $30 |
| Cancellation Fee | N/A |
| Early Prepayment Fee | N/A |
| Cashier Fee | N/A |
How to Apply: Application Process
Individuals interested in POSB's education loans must submit an application form. Applicants must also provide income documents. For salaried employees this includes either their latest 12 months' CPF contribution history statement, latest Income Tax Notice of Assessment, latest computerised payslip or salary crediting into a DBS/POSB personal bank account during 3 consecutive months. Variable or commission based employees must submit either their latest 12 months' CPF contribution history statement or their latest 2 years' Income Tax Notice of Assessment. Finaly, self-employed individuals must provide their latest 2 years' Income Tax Notice of Assessment
Other Required Documents:
- NRIC (photocopy front & back) for applicant & guarantor (if applicable)
- Certified true copy of letter of acceptance
- Invoice of payment for course fees
- Birth certificate or marriage certificate (if applying with guarantor)
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Stephen Lee is a Senior Research Analyst at ValueChampion, specializing in insurance. He holds a Bachelor of Arts degree in International Studies from the University of Washington, and his prior work experience include risk management and underwriting for professional liability and specialty insurance at Victor Insurance. Additionally, Stephen is a former US Peace Corps Volunteer in Myanmar (serving between 2018-2020), where he continues to provide business development consulting services to HR companies in Asia Pacific.