For most students at local public institutions, the cheapest education loan in Singapore is the Ministry of Education’s Higher Education Student Loan (HESL). It charges no interest during the course and gives up to 10 years to repay afterwards. Bank education loans come in mainly for courses HESL does not cover, such as private or overseas study.
This page compares the three main routes on cost: HESL, the CPF Education Loan Scheme and a commercial bank loan.
A caution on borrowing: a student loan is repaid from a starting salary that is not yet known. Bursaries and the Post-Secondary Education Account do not need repaying. Use those before any loan.
The Three Routes at a Glance
| Higher Education Student Loan | CPF Education Loan Scheme | Bank education loan | |
|---|---|---|---|
| Lender | Government scheme, through DBS or OCBC | A CPF member’s Ordinary Account | A bank |
| Courses | MOE-subsidised programmes at ITE, polytechnics, arts institutions, autonomous universities | Full-time subsidised diploma and degree courses in Singapore | Set by the bank; may include private and overseas courses |
| Covers | Up to 90% of subsidised fees (citizens); more if means-tested | Up to 40% of accumulated OA savings, within fees payable | Set by the bank |
| Interest during study | None | 2.5% a year from the first deduction | Usually charged; check the terms |
| Interest after study | 3-month compounded SORA plus 1.5 percentage points | 2.5% a year | The bank’s rate; compare EIR |
| Repayment | Up to 10 years; minimum S$100 a month | Starts one year after graduation; up to 12 years | Set by the bank |
| Guarantor | Required, aged 21 to 60 | Not applicable | Usually required for a student |
HESL and CPF figures are from MOE, DBS, OCBC and CPF Board, as at November 2026.
How the Higher Education Student Loan Works
MOE describes two parts.
The base provision is open to Singapore Citizens, Permanent Residents and international students. It covers up to 90% of subsidised tuition fees, depending on citizenship. OCBC’s page for the universities it serves lists up to 90% for citizens, 65% for Permanent Residents and 45% for international students.
The means-tested provision is for households with a gross monthly per capita income of $3,500 or less ($1,875 or less for international students). For citizens it can cover the remaining fees, a living allowance and, for undergraduates, an overseas programme. For Permanent Residents and international students it covers the living allowance only.
The agent banks list these amounts:
- Living allowance: up to $3,200 per academic year for diploma students and $4,100 for undergraduates.
- Overseas student programme: up to $12,000, once during undergraduate studies.
HESL consolidates the earlier Tuition Fee Loan and Study Loan. DBS notes that existing borrowers under those schemes are not affected and continue repaying as before.
Applications go through the StudentLoanSG portal with Singpass. Both student and guarantor need an account with the agent bank for their institution.
What It Costs: An Education Loan Example in Singapore Dollars
An illustrative graduate finishes with $30,000 borrowed under HESL. Nothing has accrued during the course.
The post-graduation rate floats with SORA, so any example needs an assumption. We assume a constant 3.5% a year, for illustration only. The actual rate is revised every April and October and may be higher or lower.
- Over 5 years: about $546 a month; total interest about $2,750
- Over 10 years: about $297 a month; total interest about $5,600
Paying over 10 years halves the instalment and doubles the interest. Repaying part of the loan as a lump sum at graduation, before interest starts, reduces both.
The same $30,000 through CPF. Interest at 2.5% runs from the first deduction. On the assumptions in our guide to the CPF Education Loan Scheme, about $32,300 is owed by the time repayment starts, and about $36,600 is repaid over 10 years.
The CPF rate is lower and guaranteed, but it starts earlier, and the money comes out of a parent’s retirement and housing savings. The interest goes back into that parent’s account.
The short version: For a subsidised local course, start with bursaries and the Post-Secondary Education Account, then the Higher Education Student Loan, which is interest-free until graduation. Treat CPF savings and bank loans as the next layers, and compare any bank loan on EIR and total repaid.
Bank Education Loans: How to Compare
A commercial education loan is the usual route for private institutions, overseas degrees and part-time courses outside the government scheme. We do not list bank rates here because we could not confirm current figures on the banks’ own pages on the day we checked.
When you ask a bank for an offer, compare:
- The EIR, not the advertised rate. MoneySense explains the difference.
- What you pay during the course. Options commonly include full instalments from the start, interest only, or a deferred start. Deferring feels easier but interest builds on the full amount.
- Fees. Processing fees are often a percentage of the loan and deducted upfront.
- The guarantor’s obligation. A guarantor is legally liable for the debt if the student does not pay.
- Currency. For overseas fees, a loan in Singapore dollars leaves the exchange-rate risk with you.
MAS treats education loans differently from other unsecured borrowing. They are not subject to the $20,000 minimum income rule, and they are excluded from the debt counted under the Credit Limit Management Measure. Lenders still assess the borrower and guarantor on their own criteria.
Before Any Loan
MOE advises students to consider other options before applying:
- Government bursaries and institution financial aid. Your school’s financial aid office assesses these.
- The Post-Secondary Education Account (PSEA). Balances can be used for approved fees, and DBS lists PSEA among the ways to repay HESL.
- Scholarships and awards, which carry no repayment.
Parents weighing their own savings can read our guide to helping children without draining retirement. It is about housing, but the same trade-off applies to fees.
Repaying After Graduation
- Minimum instalment. Both agent banks list $100 a month. On $30,000 at our assumed 3.5%, the first month’s interest alone is about $88, so the minimum barely reduces the debt at first.
- Late payments. The late rate is 3-month compounded SORA plus 4.5 percentage points.
- Leaving without graduating. DBS states the full amount becomes due, though you can appeal to pay monthly.
- Other borrowing. A graduate with a study loan who then takes a personal loan or a car loan is stacking instalments on a first salary. Student loan repayments are counted when you later apply for a home loan.
What To Do Next
- Check bursary and PSEA eligibility with your institution’s financial aid office.
- Read MOE’s HESL page for the provisions you qualify for, then apply through StudentLoanSG.
- Decide with your guarantor how much to borrow. The maximum is a ceiling, not a target.
- Plan the repayment before graduation. Our debt payoff calculator shows instalments at different periods, and the budget planner tests them against a starting salary.
- For a private or overseas course, ask two or three banks for the EIR, fees, in-course payments and total repayable.
- Before choosing a loan, see the full university fees in Singapore for 2026/27 and how families pay them.
