Posted on April 19th 2018





Written by Qiu Yiming, edited by Jackie Tan.

Many students in Singapore take up loans for the purpose of financing their higher education. This makes student loans fundamentally different from other consumer loans, which are made by households to purchase goods that would be consumed immediately. Taking student loan is, in some way, more similar to an investment – it helps borrowers to to gain knowledge and skills through their university education, which would enable them to perform better and gain higher earnings in the future.

Similar to all investment activities, taking student loans involves giving up resources and exposure to risks. Upon graduation, borrowers will face a substantial amount of debt, accumulated during the years of studies which has to be repaid regularly together with interest. Most students would want to repay the loans as soon as