Thanks to the 2018-19 budget from the government, you can receive $20,000 to contribute to your education from the Continuing Education Fund.
Even though the amount of this fund has doubled compared to previous years, it is far from covering the full cost of a postgraduate program.
My friend Kim earns $20,000 per month and is now looking to “upgrade” himself by enrolling in a masters program. However, tuition fees can set him back by over $100,000.
I told Kim not to fret – there are a lot of education loans offered by government and different banks. Here is the comparison of 3 institutions offering education loans:
Education loan #1. Student Finance Office.
The Extended Non-means-tested Loan Scheme (ENLS), covers most postgraduate courses and eligible bachelor programs at local universities.
You don’t have to repay anything until you complete your program. Once you finish your courses, you will have to pay monthly instalments at an annual interest rate of 1.132% for up to 15 years.
If you borrow $200,000, you will have to pay 180 equal instalments of around $1,208 per month. The maximum amount of loan you may borrow is the total tuition fees payable in an academic year. The lifetime loan limit under the ENLS is $358,600, and once an applicant has exhausted the limit, no re-application will be allowed.
Typically, you hear back on whether you have been approved within 3 weeks of your application submission. Once approved, the loan will be paid by instalments via cheques. The first instalment is usually paid within 3 weeks upon the date of approval. If you paid for your tuition fees, that part of the loan will be credited to your designated bank account.
Education loan #2. The Hong Kong Mortgage Corporation
If you are not eligible for applying ENLS, you’ll probably have to consider other options. With the Self-enhancement Loan, you can borrow up to a maximum amount of $100,000 from The Hong Kong Mortgage Corporation. Borrowers only have to pay interest during the principal repayment holiday. However, the interest rate is around 8-9% per annum, which is higher than what the banks can offer.
Education loan 3. Banks
Banks offer 2 types of loan plans:
1. There are a few banks that offer personal loans that are considered an “Education Loan.” OCBC Wing Hang Bank offers a maximum loan amount up to $1,200,000, which covers tuition fees and oversees living expenses.
The interest rates are as follows:
Wing Lung Bank also offers $100,000 for an Education Loan, but it is specifically tailored for students from the School of Continuing & Professional Studies at the Chinese University of Hong Kong. The annualized percentage rate (APR) is around 6.33%.
2. You may prefer Personal Instalment Loans from other banks, as their interest rates are lower than the two banks mention above.
For example, Citi bank offers a $2,000,000 loan, with a welcome offer of $2,000 supermarket coupons once you apply online. HSBC has a quick application process which takes up to 1 minute.
Standard Chartered also offers a $2,000,000 loan, with a fee waiver on redemption and handling fees. For online applicants, they have a welcome offer of up to 5,000Asia Miles. On the other hand, if you borrowed $300,000 from DBS, you can enjoy 0.05% monthly flat rate.
We compared different loans based on a $200,000 loan with a 24 month term for repayment – check it out below:
