Loan for Master’s Degree

Deciding to pursue a Master’s degree is a big step in your education and career, but rising tuition and living costs could be a big roadblock for some. Fortunately, there are loan options for Master’s degrees in Malaysia, available from government agencies like MARA and PTPTN or via commercial banks. In this article, let’s go through the different types of loans that you can take as a student to continue your studies to the Master’s level, as well as how to apply for loans, who is eligible, the interest rates to expect, and some other options you can consider.

Types of Loans for Master’s Degree Available

There are various loans which can be used to finance your Master’s level studies. These needn’t simply be the educational loans offered by government agencies, but may also be loans from within the commercial bank system who are more flexible, but perhaps also present their own conditions.

Loans from Government Agencies (MARA & PTPTN)

In Malaysia, the main agencies that sponsor loans for a Master’s degree are MARA and PTPTN. Loans from these government agencies are much cheaper as well as more flexible in terms of repayment. MARA offers loans for Master's degrees exclusively to Bumiputera students who wish to pursue their further studies either overseas or locally. This loan covers tuition fees, living expenses and other associated expenses.

The PTPTN Master’s loan is available to Malaysian citizens pursuing their degrees at public (IPTA) or private (IPTS) institutions of higher education within Malaysia, but it is more restrictive than MARA loans.

Educational Loans from Commercial Banks

Besides government agencies, there are also loans for Master’s degrees from commercial banks like Maybank, CIMB, and RHB. Loans from commercial banks are usually more lenient in terms of application conditions and payment periods, but the interest rate is more expensive compared to MARA & PTPTN’s loans so be sure you know all the terms of either.

Eligibility and Requirements for Applying for Master’s Loans

Before submitting a loan application, it pays for the borrower to understand the conditions he must meet. Each type of loan has its requirements. Meeting the stated "conditions of eligibility" is the first step toward having a loan application approved.

General Criteria for All Loans

In general, to apply for a Master’s loan, you must:

1. Be a citizen of Malaysia.
2. Have an offer to study.
3. In the case of “but when offer I have to meet the criterion set by the agency funding the loan”
4. Have no criminal record or disciplinary actions which violate the law.

In the case of age, different types of loans have different requirements. For example, MARA loan for the Master’s Degree, local studies, under 40 years old; overseas studies under 35 years old.

Eligibility for MARA and PTPTN Loans

Who can apply for MARA loans for Master’s degrees? Malay or Bumiputera students who meet strict academic admission requirements. Who can apply for PTPTN loans? All Malaysian citizens who fulfil the eligibility criteria as prescribed by PTPTN, even if they are not of Bumiputera descent. Is PTPTN loan easy to get? Overall, yes, it is easier to get a loan from PTPTN. However, the amount of loan approved depends on your academic qualifications and the institution that you are applying to.

Interest Rates and Loan Terms

Interest rates are an important thing to consider before applying for a loan for a Master’s degree, as each type of loan has different interest rates depending on the lender and type of loan chosen.

Difference in Interest Rates Between Government Loans and Commercial Bank Loans

Loans from government agencies such as MARA and PTPTN are generally lower interest loans than commercial bank loans. For example, PTPTN loans for Master’s degree courses are only charged at ~1% a year, while bank loans can range from 4% to 6% a year, depending on your credit profile.

Government loans are more flexible and allow for a discount if you repay early; but if you are going to borrow from a bank you may get an offset to the higher interest in a longer term and a larger loan.

How to Apply for a Master’s Loan

The steps worth knowing to apply for a Master’s loan will differ depending on which type of loan you’re looking at. However, here are the steps to follow in general.

Application Procedure and Important Papers

1. Filling the application form: Each bank or agency that grants loans has its own application form, which one can fill up either online or at their office.
2. Documents required: Applicants would also be required to submit copies of their ID card, their university admission offer letter and academic transcripts or any other proof.
3. Eligibility assessment: Once the application is submitted, the agency or bank will evaluate the applicant's eligibility according to the established criteria. If approved, the applicant will receive a loan offer letter.
4. Disbursement of the loan: The loan will be paid to the borrower's account, or directly to the post-secondary institution.

Alternatives to Master’s Loans

In addition to loans for Master’s degrees, education can be funded through additional means.

1. Scholarships and Grants: Scholarships or grants offered by the government or private organizations are available to many individuals. These usually do not require payback, and are therefore more favorable than loans.
2. Corporate Sponsorship: Some private companies provide sponsorship per student with the students working for them after graduating. The sponsorship tends to cover the tuition fees and some parts of the living expenses.
3. Personal Loans: While quick loans from banks can be used to finance education, they come with higher interest rates and shorter repayment periods, making them less suitable for students.

Conclusion

Applying for a Master’s loan, as explained here, is an important step for students wishing to pursue a Master’s degree. By understanding what types of loans are available, what eligibility is required and how much the interest rates vary, applicants can make the best decisions and better plan their finances around loan repayments later on. There are alternatives such as scholarships and sponsorships which reduce the financial burden on students which they should also take into consideration when looking for forms of studies and loans. With all of this planning, taking a Master’s loan to achieve your academic and career goals could be a powerful tool.

FAQ