Higher education can open doors to rewarding opportunities. However, even with government subsidies, scholarships, and sponsorships, tertiary and college fees can still cause a huge dent in your wallet. To ease the financial strain, students can opt to take up a study loan. And no, banks are not the only options. There are also legal money lenders in Singapore that offer flexible student loans.
In this article, Cash Direct, one of the best licensed money lenders in Jurong East, debunks five myths about study loans.
Myth 1: “I need to go to a bank for student loans.”
There is no need to rely only on a bank or financial institution to secure a student loan. In fact, many licensed money lenders in Singapore provide study loans.
Study loans are considered a necessity or purposeful loans. Generally speaking, most study loans are interest-free during the course of study, and usually have a fixed interest rate that is lower than that of other loans (such as personal loans).
It is vital to understand that there are different types of student loans, with different terms. Before choosing a loan from a money lender, you must factor in your future repayment ability.
Myth 2: “I can’t get a study loan if I don’t have a salary.”
If you do not have a source of income and want to obtain an education loan, you can get a working parent or close relative to guarantee the loan on your behalf. Those under the age of 21 will generally need a guarantor to take a study loan. If you will be studying part-time while working, you will need to verify that you have a constant source of monthly income and are in a position to study.
Myth 3: “I can always pay off student loans later when I’m more successful in my career.”
It is not prudent to wait for a dream salary before paying off loans as interests accrue. Ideally, you want to pay off your loans as soon as possible so that you end up paying as little as possible. Make it a point to fully understand your repayment policy to know whether you need to start making payments for the loan from the moment you graduate or before.
If there is no interest charged before graduating and you are in a position to make repayments earlier, you should do so to avoid the interest fees that would incur should you delay repayment. A simple example: if you’ve already paid half of your S$40,000 loan before a 3% interest kicks in at the end, you would end up paying 50% less interest.
Myth 4: “I’ll never be able to pay off my student loans.”
This is often not true. Before taking a student loan, you should budget accordingly. This entails knowing your monthly expenses so that you can set a monthly budget. By budgeting well and automating your payments, you would be able to pay for the necessities first – including loan repayments – and set aside enough for emergencies before splurging on luxuries.
Most student loans allow you to make additional payments without penalties, so be disciplined about using any income from part-time work or side gigs to consistently reduce your loan amount. Remember to adjust your installment amount accordingly if your financial situation improves.
Myth 5: “I can’t take a personal loan to pay off student loans.”
Gradually chipping away at your student debt may seem like the most obvious way forward, but it’s not your only option. There are other financial options to pay off student loans – including taking a personal loan from a money lender such as Cash Direct (located in Jurong East) to pay off the lump sum.
Depending on your financial situation, you may find it suitable to take out a personal loan to settle a portion or the entire student debt upfront should it offer more favourable terms. This may seem counterintuitive, but restructuring personal loans with better interest rates can help you save costs as opposed to staying stagnant and accumulating interest.
Interested in securing a student loan from a legal money lender in Jurong East? Find out more about loan options with Cash Direct Pte Ltd. We take pride in being one of the best Jurong East money lenders in Singapore. Reach out to us today!