Compared to the MOE Tuition Fee Loan (TFL), isn't the CPF Education Loan a better option as I will pay the interest to my parents' Ordinary Account so that they can benefit from it?
The MOE TFL is interest-free during the course of study. This means that if you repay the loan fully right after graduation, you will not incur any interest at all for the MOE TFL. If you are unable to repay your MOE TFL due to further studies or financial difficulties due to unemployment or medical condition, you may appeal to defer repayment and interest. Your appeal will be considered on a case-by-case basis. For more information on the MOE TFL, please refer to this link.
On the other hand, if you borrow from your parent’s OA, the interest starts to accrue from the time the savings are withdrawn to pay the educational institutions. When you repay the accrued interest to your parents’ OA, you are simply restoring their OA to what government would have paid them anyway. There is no additional benefit to them. By not using your parent’s OA savings, government will be paying your parent an OA interest of up to 3.5% during your period of study and they will be able to accumulate more CPF savings for their retirement.
