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The MOE Higher Education Student Loan (HESL) 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 HESL. If you are unable to repay your MOE HESL 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 HESL, please refer to this link.

 

On the other hand, if you borrow from a member (lender)’s CPF Ordinary Account (OA), the interest starts to accrue from the time the savings are withdrawn to pay the educational institutions.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 the member’s OA, you are simply restoring their OA balance to what the government would have paid them regardless. There is no additional benefit to them. By not using the member’s OA savings, the government will be paying them an OA interest of up to 3.5% during your period of study, allowing them to accumulate more CPF savings for their retirement.