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The financial costs of studying overseas may seem daunting but it can be manageable with the right planning and a buffer for unexpected costs.
In this week’s Money Talks, Dr Chan Khai Leok from education consultancy company theRightU walks us through the key financial planning essentials - from funding options to major expenses.
File photo of a group of students on graduation day. (Photo: iStock/kali9)
Here is an excerpt from the conversation:
Andrea Heng, host:
(On) financing, immediately we think of study loans that are offered by financial institutions, for example. (Or) even some of the grants that are available through the school itself or even scholarships.
But what are some other common sources of funding, and what are some of the terms and conditions that are attached to those alternative sources of funding?
Dr Chan Khai Leok, theRightU:
I think (study loans are) a very common source of funds to top up what the family has. Fortunately, there are a few banks in Singapore that offer overseas loans, but typically they only cover the tuition fee component and not the living expenses. They also have a cap and it's capped at typically a multiple of your guarantor’s salary. So there's also a limit as to how much (they) can loan.
Now, how do you account for the rest of the costs?
And it can pay for quite a significant fraction of that total cost.
Andrea:
Going back to some of the bank loans that you talked about, the interest rates that are offered through these study loans, what's acceptable and what's bad? Because I've heard stories of people taking years to pay off their loans.
Dr Chan:
It is a long journey if you decide to not pay a lot in terms of the principal (amount). The interest at the moment is around four to five per cent so it is appreciable. It's relatively high because they have to take into (account) the possibility and the risk that you do not pay back - you run away, for example.
And just bearing in mind, your salaries will accelerate over the course of time.
Andrea:
So hopefully you pay a little bit more as you progress as well.
Dr Chan:
Exactly. If you think that you have sufficient savings to pay up everything in one shot, yes there's a little bit of a penalty, but you stop paying that four to five per cent (interest).
Find more episodes of Money Talks here.
A new episode of Money Talks drops every Tuesday. Follow the podcast on Apple, Spotify or melisten for the latest updates.
Have a great topic for us? Drop the team an email at cnapodcasts [at] mediacorp.com.sg
Source: CNA/jj
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FAST
The financial costs of studying overseas may seem daunting but it can be manageable with the right planning and a buffer for unexpected costs.
In this week’s Money Talks, Dr Chan Khai Leok from education consultancy company theRightU walks us through the key financial planning essentials - from funding options to major expenses.
File photo of a group of students on graduation day. (Photo: iStock/kali9)
Here is an excerpt from the conversation:
Andrea Heng, host:
(On) financing, immediately we think of study loans that are offered by financial institutions, for example. (Or) even some of the grants that are available through the school itself or even scholarships.
But what are some other common sources of funding, and what are some of the terms and conditions that are attached to those alternative sources of funding?
Dr Chan Khai Leok, theRightU:
I think (study loans are) a very common source of funds to top up what the family has. Fortunately, there are a few banks in Singapore that offer overseas loans, but typically they only cover the tuition fee component and not the living expenses. They also have a cap and it's capped at typically a multiple of your guarantor’s salary. So there's also a limit as to how much (they) can loan.
Now, how do you account for the rest of the costs?
And it can pay for quite a significant fraction of that total cost.
Andrea:
Going back to some of the bank loans that you talked about, the interest rates that are offered through these study loans, what's acceptable and what's bad? Because I've heard stories of people taking years to pay off their loans.
Dr Chan:
It is a long journey if you decide to not pay a lot in terms of the principal (amount). The interest at the moment is around four to five per cent so it is appreciable. It's relatively high because they have to take into (account) the possibility and the risk that you do not pay back - you run away, for example.
And just bearing in mind, your salaries will accelerate over the course of time.
Andrea:
So hopefully you pay a little bit more as you progress as well.
Dr Chan:
Exactly. If you think that you have sufficient savings to pay up everything in one shot, yes there's a little bit of a penalty, but you stop paying that four to five per cent (interest).
Find more episodes of Money Talks here.
A new episode of Money Talks drops every Tuesday. Follow the podcast on Apple, Spotify or melisten for the latest updates.
Have a great topic for us? Drop the team an email at cnapodcasts [at] mediacorp.com.sg
Source: CNA/jj
Get the CNA app
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