Where to get an education loan to further your study? That's the headache my friend Kim is having right now.
A 26-year-old friend of mine named Kim is a young, ambitious digital marketing executive earning $20,000 per month. She's looking to further her career by enrolling in a marketing master's program. However, the program costs over $100,000, and Kim is unsure how she can finance it.
Luckily, she got a friend like me (who likes to dig out the best deals). I got her research on education loans in Hong Kong, including those from the government and various banks and I am sharing this information to help you who may be in a similar situation.
Don’t forget, if you find this blog post helpful, consider bookmarking it for future reference. And now, let's get down to business.
Where to get student loans in Hong Kong?
Ideally, you can get education loans in Hong Kong through 3 places: the Student Finance Office, the Hong Kong Mortgage Corporation, and banks. Here is a quick comparison of the 3 types of loans:
Student loans comparison in Hong Kong
Organization | Advantages | Disadvantage |
Student Finance Office | – Lowest annual interest rate: 1.231% | – Limited to specified courses – Cannot apply online – Long waiting time – Funds not disbursed all at once |
Bank Personal Loans | – Faster approval process – No restriction on courses – High loan amount | – Need to pay attention to terms and conditions – Floating annual interest rate |
Student Finance Office: Extended Non-means-tested Loan Scheme (ENLS)
When it comes to the lowest interest rate, The Extended Non-means-tested Loan Scheme (ENLS) offered by the Student Finance Office is the best option. Most local universities' master's and doctoral programs, and even some bachelor's programs, are eligible for loan applications.
The repayment period starts from the completion of the course, with a maximum repayment period of 15 years. The current annual interest rate is 1.231%, and interest is calculated from the day the loan is disbursed, including during the academic period, until the loan is fully repaid.
The maximum amount of loan you may borrow is the total tuition fees payable in an academic year. Do note that the lifetime loan limit under the ENLS is $372,700, and once an applicant has exhausted the limit, you can't apply for the loan again.
Although the interest rate is attractive, you should also consider that the loan amount does not exceed the tuition fee payable, plus the required application time.
The Student Finance Office usually starts counting the three-week waiting period from the day all the required application documents are collected, including the Hong Kong ID card copies of the applicant, guarantor, and witness, and the copy of the admission letter from the university.
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. And the first instalment is usually paid within 3 weeks upon the date of approval. If you have paid for your tuition fees, that part of the loan will be credited to your designated bank account instead.
Banks: Personal Loans
When it comes to ease of application, private loans from banks are undoubtedly the easiest. You can submit the application form online, and get approved as fast as the same day. Plus the loan amount is 12 to 20 times the applicant's monthly salary. Other than paying for tuition, it can also help with your daily expenses.
As for which bank has the best interest rate, we uses the example of applying for a HK$200,000 loan and repaying it in 48 months, comparing BEA (Bank of East Asia), Standard Chartered Bank, DBS Bank, Hang Seng Bank, and HSBC.
Borrowing HKD 200,000 for 48 months, comparison of interest rates for 5 banks:
Bank | Annual Interest Rate | Monthly Repayment |
Standard Chartered Bank | 6.30% | HKD 4,709 |
Bank of East Asia | 8.35% | HKD 4,887 |
DBS Bank | 6.21% | HKD 4,607 |
Hang Seng Bank | 7.2% | HKD 4,787 |
HSBC | 7.9% | HKD 4,846 |
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