Many people regard getting a postgraduate degree as an investment in their future, and so they borrow money to achieve this goal. However, loans for postgraduate study are not student loans in the sense that many UK undergraduates are used to: they are bank loans with come loaded with a significant amount of interest. If you are trying to decide whether to opt for a postgraduate loan, then this guide is exactly what you need.
Postgraduate student loans: pros and cons
As we have already mentioned, postgraduate student loans are in fact bank loans - they are obviously useful because they allow you to fund all or part of your study, but they do have some possible drawbacks. Bank loans are ‘proper adult loans’ so there are serious consequences if you do not keep up with repayments. You may think that a master’s looks good on your CV, but it’s not worth having bankruptcy on your records for it!
There is no guarantee that will be able to get bank loans for postgraduate study. First you must apply for one and attempt to demonstrate to a bank that there will be a return on investment, plus your credit rating needs to make you a trustworthy borrower for them to agree to lend you the cash.
However, despite all the doom and gloom, bank loans are generally a safe and good option if you are responsible about lending. You need to be able to manage your money and make sure that you can always make repayments, and if you feel confident in that, then there is no reason why you shouldn’t get yourself a bank loans.
Professional and Career Development Loans
If you are over 18 and are a UK resident or have been settled in the UK for at least three years and intend to work in the UK or EU after completing your degree then a Professional and Career Development Loan might be an option for you if you need a loan for postgraduate study.
Career Development Loans (CDLs) are a new type of loan being sponsored by the government and organised by Barclays Bank, The Royal Bank of Scotland and The Co-Operative Bank. The aim is to give loans that will help people advance their careers. Postgraduate degrees fall into this category, and therefore CDLs can be a perfect way to fund your study.
Pros and Cons of Career Development Loans
There are certain conditions that come with CDLs, both good and bad.
On the plus side you do not need to start paying back the loan until after you complete your course, which means you will not be laden with debt while studying as the government pays for your interest as you study. The interest is also fixed so you don’t have to worry about a massive jump in the cost of the loan – you always know where you stand with what you need to pay.
However there is some rigidness to contend with. There are fixed percentages on what you can spend your loan on – for example, no more than 30% can be spent on your living costs.
Also, the issuing of the career development loan is still subject to the bank’s agreement, so if you suffer from a poor credit rating you may not qualify for the loan.