Educational
Invest in yourself
What is an Educational personal loan?
Any approved personal requirement for educational expenses. Approval should apply to existing good clients of the Bank or if new applicants those who can provide BSV coverage of at least 1.5 Times Bank Security Value and with assured ability, preferably by deduct salary arrangement. Alternatively approval could apply to new clients where existing personal loan is being taken over from another bank in order to strengthen the overall security position of the new proposal and to ensure repayment capacity through S/D deduction. In this instance the term should be restricted to 12 months.
Why go with us?
Tonga Development Bank’s education loan has:
- A highly competitive interest rate
- Flexible borrower's contribution
- $15,000 borrowing limit
- Maximum loan could be higher due to requirements for payment of school fees for overseas institutions
From
8.00% pa
interest rate
| Personal Loan | |
|---|---|
| Loan Features | |
| Security | All items owned by borrowers. The BSV to be equal to or greater than 1.0x for mortgage or 1.5x without mortgage. |
| Term | Normally, the term is 15 months with maximum term of 24 months. |
| Repayment Percentage Salary Deduction | Salary deduction is preferable, up to 50% of net income, 60% can be considered depending on salary scale and other income. |
| Fees | Can be charged to account. |
| Disbursement | Can be paid directly to the borrower or as agreed draw down schedule. |
| Borrowers Contribution | Flexible but depending on terms of loans and security coverage. |
| Maximum Amount | $15,000 |
| Account Keeping Fees | Yes |
Eligibility Guideline – Applicants
- 1. Eligible Purposes:
Any approved personal requirement including motor vehicles, educational expenses, furniture, fittings and appliances. Approval should apply to existing good clients of the Bank or if new applicants those who can provide BSV coverage of at least 1.5 times BSV and with assured repayment ability, preferably by salary deduction arrangement. Alternatively approval could apply to new clients where existing personal loan is being taken over from another bank in order to strengthen the overall security position of the new proposal and to ensure repayment capacity through S/D deduction.
- 2. Amount of Loan:
Equivalent to six month salary or regular income. The maximum amount of loan could be higher due to requirements for payment of school fees for overseas institutions.
- 3. Repayment Monthly repayments are required:
Preferably by salary deduction or bank transfer.
- 4. Term:
36 months maximum
- 5. Interest Rate (Refer to Interest Rate structure Annex 2):
The interest rate is set for the term of the loan and is calculated on daily balance outstanding and charged to loan account monthly.
- 6. Security:
a) Preferred security includes mortgage on leasehold land with improvement, term deposit with TDB, fixed and movable assets and personal guarantee supported by assets. BSV coverage should be at least 1.5 times.
b) The vehicle purchased should be jointly registered in the borrower’s name and the Bank with certificate of Registration held by the Bank until the loan is repaid in full and the Bank’s name can then be cancelled.
- 7. Limitations:
a) Monthly repayments and other debt commitments are not to exceed 60% of monthly net salary and allowances of principal borrower and co-borrower(s). In marginal cases, regard may be given to other regular sources of cash income but the maximum commitment is not to exceed 60% of net salary.
b) For motor vehicles, preferred minimum cash deposit is 25% of the total cost of the vehicle.
i. repayment is through S/D or PPA
ii. The maximum terms are as follows: Second-hand vehicles: 36 months, New vehicles: 60 months
- 8. Insurance (Refer to section 2) (g)
Security assets must be insured to TDB’s requirements and owner’s interest assigned to TDB.
a) Security assets financed by the Bank must be insured with the policy assigned to the Bank.
b) It is preferable that all assets pledged as security be insured.
c) The minimum value of assets insured must be at least 1.5 times BSV.
d) Premium can be charge to the account or client can pay cash.
- 9. Payment of Fees:
a) Establishment fees must be paid in cash upfront before disbursement.
b) Bank fees instituted from time to time shall apply.
- 10. Computer Code to Use:
L62
- 11. Credit Risk Rating:
Generally Personal Loans are only approved for existing borrowers and the Personal Loan rating will use the rating already applied to the other loans. Where that is not the case then the general “book” rating of C1 is to apply unless the approving authority approves a higher rating.
