Terms and conditions for change of monthly instalment rate for education loan repayment

1. The student¹ is required to repay to the CPF member's² CPF Ordinary Account (OA), the CPF savings withdrawn under the CPF Education Loan Scheme including such interest that would have accrued on this amount has it not been withdrawn. Interest is computed monthly and compounded yearly based on the prevailing OA interest rate until the loan has been fully repaid. All repayments will be credited to the CPF member's OA.



Effective Date and Instalment Rate



2. Subject to CPF Board's approval, a student may apply to change the rate of his monthly instalment. The proposed new rate for any course of study should be minimally $100 or such higher amount as CPF Board may determine.


3. For a student making repayment via GIRO, if his request to change the rate of his monthly instalment is approved by CPF Board by the 14th of a month, the new rate will take effect from that month. Otherwise, it will apply the following month. This cut off date is subject to change by CPF Board. For a student making repayment via electronic modes (not via GIRO), the new rate shall apply immediately.



Modes of Repayment



4. Repayment to CPF Board by monthly instalments shall be made via GIRO or by such other modes of repayments approved by CPF Board. Please click here for more information on the various approved modes of repayment.


5. To repay via GIRO, the student has to complete and submit the GIRO/IBG form. The student must ensure there are sufficient funds in the GIRO account to cover the monthly deductions. Some banks levy a service charge for unsuccessful deductions; such service charges shall be borne by the student.



Repayment of Loan



6. Repayment must be made in cash. The student cannot use his own CPF savings for the repayments.


7. Repayment will commence
   1. one year after the student has completed his course of study; or
   2. one year from the date the student leaves the institution if he did not complete his course of study, whichever is applicable.


8. Students are encouraged to repay the outstanding loan as soon as possible to reduce the interest they have to pay. On top of monthly instalments, student may also make lump sum repayments from time to time to accelerate the full repayment of the loan.


9. The moneys withdrawn under the Education Loan Scheme and its accrued interest must be fully repaid over a maximum period of 12 years. CPF Board may at its discretion, require the student to increase the rate of the monthly instalments, or make a lump sum repayment to ensure that the student does not take more than 12 years to repay the loan.


10. If the student makes a repayment that is higher than the outstanding loan amount, CPF Board reserves the right to credit the excess repayment amount into the CPF member’s OA, without having to notify the student or the CPF member.



Default in Repayment



11. If the student fails to make repayment of the CPF savings withdrawn and the accrued interest in accordance with the repayment plan determined by CPF Board, legal action may be taken by CPF Board to enforce the repayment from the student and/or the guarantor (where applicable) for the whole or such part of the amount of CPF savings withdrawn and the accrued interest that are still outstanding.


12. In the event that CPF Board takes legal action against the student and/or the guarantor to enforce the repayment of the CPF savings withdrawn (including accrued interest), the student and/or the guarantor (where applicable) will be liable to pay all the legal costs and expenses on an indemnity basis including but not limited to all costs and expenses incurred for obtaining and enforcing any judgment or court order made against the student and/or the guarantor (where applicable).


13. In addition to paragraph 12 above, the student and/or the guarantor (where applicable) will also be liable to pay, on an indemnity basis, all preliminary legal costs and expenses incurred by CPF Board to recover the CPF savings withdrawn (including accrued interest) including but not limited to the cost of sending letters of demand.

¹ "Student" refers to the person who has used the CPF member's CPF savings for his education under the CPF Education Loan Scheme.

² "CPF member" refers to the person whose CPF savings have been used to pay for the student's education.