facebookI can afford to pay for my University tuition fees fully. Does it make sense to still take up a bank loan to earn extra interest? - Seedly

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Anonymous

07 Jun 2019

Property

I can afford to pay for my University tuition fees fully. Does it make sense to still take up a bank loan to earn extra interest?

Was thinking to take up a study bank loan and use the money to put it in a high interest Fixed Deposit account and earn the interest then repay the loan fully before I graduate? It'll still be interest free and I'll get to earn additional interest from the loan amount.

Discussion (8)

What are your thoughts?

You might want to consider dragging the repayment as long as you can as a 4.75% 'loan' is quite cheap, for retail (not hard to get returns above that) - speaking from my own experience

View 1 replies

Jonathan Chia Guangrong

Jonathan Chia Guangrong

19 Nov 2018

Level 12·Cybersecurity Trainee at Bank in blue

Will you be able to invest your own funds to achieve a better yield as compared to the interest rate of the loan? If yes then consider taking up the loan.

No, dont take a loan unnecessarily. Why pay the interests cost. Typical private uni u only need to pay term by term. So u will not need to come out with the full lump sum at the onset.

Let say it cost $35k for the entire uni fees. And if you take a loan, the interest rate is about 5%....

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