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Loans

What do I need to consider before taking out a loan?

It is important to check whether the loan company offering you a loan is authorised by the Financial Conduct Authority (FCA) so you can protect yourself from fraud or other unauthorised activity. The FCA website which explains how you can do this and where you can check the register of authorised firms.

You should also make sure you fully understand the terms and conditions of any loan or credit that you take. Before you decide to take out a loan first check:

  • how much you need to borrow
  • how much your monthly repayments will be
  • what the interest rate is and whether this is fixed or variable
  • the length of the loan agreement
  • the frequency and timing of payments
  • how you will repay the loan from your future earnings
  • at what point in your studies to take the loan – this will depend on your own circumstances; some students may need the money earlier in their studies, while others may need it later
  • what happens if you take longer to complete your studies than originally planned
  • whether you can reduce the amount you need to borrow by exploring other sources of funding or reducing your spending
  • How much in total you will end up repaying

Contact a Welfare Adviser in the Advice and Counselling Service if you would like some help thinking through these issues before you make a decision about taking out a loan.

UK Government Postgraduate Master's Loans

A new system of postgraduate loans for Masters degrees in the UK was introduced for courses starting from the 2016-17 academic year onwards. These are intended as a contribution towards the cost of study, so eligible students can use them as they wish to (e.g. for tuition fees, or living costs, or other costs).
It is non-income assessed and has to be paid back. You must be aged under 60 on 1st August of the year in which you start the course

Which courses can I get a Master's Loan for?

Master's Loans are available for study at any UK university with degree awarding powers, or an alternative funding provider with degree awarding powers.

Master's Loans are available for both taught Masters programmes as well as Masters by Research, and across all subject areas. They are also available for designated distance learning courses, provided you are living in England.

Students are not eligible for a Master's Loan where they are eligible to apply for a healthcare bursary or are in receipt of a social work bursary from any of the following:

  • National Health Service (NHS)
  • Department of Health, Social Services and Public Safety (DHSSPS)
  • Student Awards Agency Scotland (SAAS)

A full-time course must be a maximum of 2 years long, and a part-time course must be either:

- a 1 year full-time equivalent course studied part-time over 2 years, or

- a 2 year full-time equivalent course studied part-time over 3 or 4 years, or

- 3 year part-time course which does not have a full-time equivalent

How much can I borrow?

Eligible students can borrow up to a maximum for the whole course of:

  • £10,609 for students starting in 2018-19
  • £10,280 for students starting in 2017-18
  • £10,000 for students starting in 2016-17

If the course is longer than one year, the total loan amount will be split across the number of years of the course, for example on a two year course starting in 2016 you would get up to £5000 in each year.
If you initially choose to borrow less than you are entitled to, but later decide that you need to borrow more, you can ask SFE to amend the loan amount. You need to complete a ‘loan request form’ which you can download under the 'change an application' section (you cannot make this request online). The deadline for doing this is the end of May in the first academic year if your course is one year long, or by the end of May in the second academic year if your course is more than one year long.

What is the interest rate on the Master's loans?

Interest is charged from the date you receive your first loan payment. The interest rate is the current RPI (Retail Prices Index) percentage rate, plus an additional 3%. This means that from 1 September 2017 until 31 August 2018 the interest rate will be 6.1%.

How is the Master's Loan paid?

Payment will be released once your university has confirmed to SFE that you are studying. The Master's Loan will be paid from the Student Loans Company direct to you in three equal instalments across the academic year as follows:

Payment 1 – Once you have enrolled on your course (normally in late September or early October)

Payment 2 – last Wednesday of January

Payment 3 – last Wednesday of April

How and when do I apply for a Master's Loan?

Applications should be made online to Student Finance England. Apply as soon as you can to try and ensure that your loan is available at the start of the academic year.

You must apply no later than the end of May in your first year if your course is one year long, or by the end of May in your second year if your course is more than one year long.

The application deadline may be extended if you were not eligible for the Postgraduate Loan at the start of the academic year but only became eligible part way through.

You will submit your Online Terms and Conditions (OTC) via your online account with an Electronic Signature (E-Signature) so you will not need to sign any paper forms and send them by post.

What documents will I need to provide?

This is explained on the gov.uk website.

Do I need a National Insurance Number (NINO)?

No payments will be released until a valid National Insurance Number (NINO) has been received and verified, unless you are a non-UK EU student. If you have already had your NINO verified as part of an earlier SFE application, the NINO does not need to be verified again.

What if something changes after I have applied?

If any personal information changes after you submit your application, such as a change of address or bank account details, you can update this information via your online account.

If other changes happen, for example you decide to enrol at a different university or on a different course, you cannot change this online, so you need to download and send in a ‘change of circumstances form’.

I already hold a Masters or higher level qualification – can I get a Master's Loan?

If you already hold a Masters degree or higher level qualification (regardless of how it was funded or whether or not it was achieved in the UK) you won’t normally be eligible for a Master's Loan.

I started a previous Masters but did not complete it – can I get a Master's Loan?

Eligibility for a Master’s Loan is not affected by previous postgraduate study if you did not achieve the qualification and did not receive a loan. However, in order to receive a Master's Loan you must undertake a full master’s degree course and not a partial course topping up from previous study or experience.

If you undertook a previous postgraduate Master’s degree and received a Master's Loan or any other loan provided by a UK government authority for that course but did not receive the qualification, you will be ineligible for another Master's Loan (even where you did not receive full payment of your loan), unless you can prove that you did not complete the course due to a compelling personal reason (CPR). Contact a Welfare Adviser if you think this applies to you. 

What is the personal eligibility criteria?

Please see the Appendix at the end of this guide for information about eligibility.

How will loan repayments work?

Loans are normally repayable from the April following course completion, so if you study a one year programme startng September in the 2017-18 academic year, you will become liable for repayments in April 2019.

You will only be liable to make repayments once you are earning at least £21,000 gross in a tax year, or the equivalent to this amount in any shorter period that you work (for example if in any week or month your earnings would equivocate to an annual income of at least £21,000). You will repay 6% of your income above £21,000.

If you will also be repaying an undergraduate loan, those are repayable at 9% of income above £21,000 a year. Therefore your combined loan repayments would total 15% of income above £21,000. The postgraduate loan repayment information on the Find a Masters website has worked examples and a calculator you may find useful to help you calculate your individual repayments. The gov.uk page also has repayment information.

If you are repaying from overseas, the repayment threshold will be based on the cost of living in your country of residence.

What happens if I fail to complete my Masters?

If you do not achieve your Masters qualification, or if you are awarded a lower level qualification, Master's Loan funding that you have already received will not be considered an overpayment. However, further Master's Loan funding will not be available for a new course unless you failed to complete the first course due to compelling personal reasons.

Where can I get more information?

https://www.gov.uk/postgraduate-loan

www.findamasters.com/funding/guides/new-uk-postgraduate-loans-scheme.aspx

I am from Wales, Scotland or Northern Ireland - can I get a Master's Loan?

See the Eligibility section of this guideThe findamasters.com website explains how much loan is available in 2017/18 for students from Wales, Scotland and Northern Ireland who are studying in the UK.

 

UK Government Postgraduate Doctoral Loans

If you’re starting a postgraduate Doctoral course on or after 1 August 2018, you may be eligible for a Postgraduate Doctoral Loan. This is to help towards your tuition and living costs. It is non-income assessed and has to be paid back. 

What is the eligibility criteria?

  • You must be aged under 60 on the first day of the first academic year of your course. Please click here for the definition of an academic year
  • You must not be receiving any Research Council Funding (even a partial award)
  • You must not have already received a Doctoral Loan
  • You must be studying for your first Doctoral degree. If you already hold an equivalent or higher level qualification, you aren't eligible
  • You must be studying on an eligible course (see below)

Which courses are eligible?

Your course must:

  • be a full, standalone doctoral course (not a top-up course)
  • have started on or after 1 August 2018
  • last between 3 to 8 academic years
  • be provided by a university in the UK with research degree awarding powers

There are no restrictions on subjects, disciplines, research areas or topics.

If more than one university delivers your course and one is overseas, you’ll still be eligible for the Postgraduate Doctoral Loan so long as:

  • the UK university is the lead institution
  • you spend at least 50% of your study time over the whole course in the UK

The course can be either full or part-time.

If your course is undertaken by distance learning, you must be living both in England on the first day of the first academic year of your course, and within the UK for the whole of your course.

Eligibility also depends on your nationality and residence. Please see the Appendix of this guide for eligibility information.

How much can I borrow?

You can borrow up to £25,000 for the whole course. This is not income assessed. 

How is the Doctoral Loan paid?

The total loan will be divided equally across each year of your course. For example, if you apply for the maximum amount of Postgraduate Doctoral Loan and study over four years, you’ll get £6,250 in each year of your course.
The amount of loan you can receive each year will be split into three instalments and payments will be spread accross the year. After your application has been approved you’ll be sent a letter with your payment dates or you can check them in your online account. You will usually get the first payment shortly after you have enrolled.

How and when do I apply for a Doctoral Loan?

Online applications are expected to open in summer 2018. 

What is the interest rate?

Interest is charged from the date you receive your first loan payment. The interest rate is the current RPI (Retail Prices Index) percentage rate, plus an additional 3%. This means that from 1 September 2017 until 31 August 2018 the interest rate is 6.1%.

How will loan repayments work?

Loans are normally repayable from the April following course completion. You will only be liable to make repayments once you are earning at least £21,000 gross in a tax year, or the equivalent to this amount in any shorter period that you work (for example if in any week or month your earnings would equivocate to an annual income of at least £21,000). You will repay 6% of your income above £21,000. If you already have a Postgraduate Master’s Loan then you’ll make a combined repayment of 6% covering both postgraduate loans.

If you will also be repaying an undergraduate loan, those are repayable at 9% of income above £21,000 a year. Therefore your combined loan repayments would total 15% of income above £21,000. 

Where can I get more information?

https://www.gov.uk/masters-loan
https://www.findaphd.com/funding/guides/uk-phd-loans-scheme.aspx​

Professional and Career Development Loans

PCDLs are operated by the Skills Funding Agency through the Co-op bank. They can be used to help fund vocational or work-related training which enhances your job skills or boosts your career prospects but they are not available for all courses. A PCDL can help fund a standalone programme of up to two years, or the last two years of a longer programme. So you would normally not be able to take a PCDL until you are within two years of completing your programme, otherwise you would be required to make repayments while you are still studying. PCDLs are commercial bank loans that are partially government subsidised.

The Skills Funding Agency pays the interest on the loan while you are studying and for one month afterwards, after which you would pay it back in instalments with interest. Interest rates on the loans are set to be competitive with commercially available loans. PCDLs are being offered at a rate of 9.9% per annum. Here is an estimate of the repayments you would make depending on the loan amount and term, but you would need to check the exact terms with the bank:

Loan

Amount

Representative

APR

Term

Monthly

Repayment

Total payable

£300

9.9%

36 months

£9.63

£346.49

£5000

9.9%

36 months

£160.43

£5775.43

£10000

9.9%

60 months

£210.39

£12623.58

The gov.uk website advises to apply two months before your course starts to give the bank enough time to process your application, and not to apply more than two months ahead, as your application won’t be accepted.

As well as the type of academic programme you are doing, banks will assess your eligibility for a PCDL by considering other factors such as how long you have been living in the UK and your credit history, before making a decision on your application. The eligibility criteria is set out on the Co-op bank website. You must be:

  • Be a single applicant aged 18 or over.
  • A UK citizen.
  • Have been living in the UK for at least 3 years before your course starts.
  • Not had any County Court Judgments (CCJs), entered into any Individual Voluntary Arrangements (IVAs), or Trust Deeds, nor been declared bankrupt within the last 6 years. 
  • Not in arrears, and have not missed more than 2 payments on any credit agreement in the last six months. 
  • Plan to work in the UK, European Union (EU) or European Economic Area (EEA) after your course is completed. 
  • Unable to finance the course yourself, with reasonable or adequate access to funds.

If your application is successful, you can usually borrow between £300 and £10,000 to pay for:

  • course costs such as fees, books, travel and childcare
  • living costs such as rent, food and clothing if you are unemployed or working less than 30 hours per week

It is advisable to get a decision on your PCDL application before you start your programme, otherwise if your PCDL application is turned down after you have started, you might have to take time out or leave due to a lack of funds.

To request an application pack and to discuss your eligibility for a PCDL with an adviser, contact The National Careers Service on 0800 100 900. Other contact options include webchat, an online forum and a free callback service.

There is more information on PCDLs on the gov.uk website.

There is also a step-by-step guide to applying for a PCDL and advice about repaying PCDL’s to try and minimise the overall amount of interest you pay here.

EU+

You can apply to the Postgraduate Loans Scheme if you have been ordinarily resident in the UK for at least three years before the start of your programme, and you intend to work in the UK or elsewhere in the European Economic Area after you complete it.

Can I take out a Postgraduate Loan and a PCDL at the same time?

The Skills Funding Agency have advised that eligible students can apply for both a Postgraduate Loan and a PCDL if a Postgraduate Loan would not provide you with sufficient income. You are advised to first apply for a Postgraduate Loan as the interest rate is less, repayments are income contingent, and it does not require a credit rating. If the Postgraduate Loan does not meet your expected expenses, you can try applying for a PCDL to increase your funding. It is likely that you will need to have prepared a budget for your PCDL application showing your expected expenditure, to show how much funding you need. You may find it useful to use our online budget planner to help you with this.

Before taking out both loans, you should think very carefully about whether you will be able to afford the repayments of two loans after course completion. See the previous section ‘What do I need to consider before taking out loans?’

Shariah-Compliant Loans

Islamic Sharia law prohibits 'Riba', which means the paying and receiving of interest for profit. The prohibition is usually applied to excessive or unreasonable interest but is sometimes deemed to include the commercial rate of interest paid on a Professional and Career Development Loan, Student Finance loan, bank overdraft or credit card. For more information on Shariah-Compliant loans see the Advice and Counselling Service Student Loans and Shariah law webpage.

Other Loans

Other bank, private and payday lending loans are available. They may seem attractive but their terms and conditions such as high interest rates or immediate repayments tend to make them unsuitable for students.

A credit card is another type of loan which enables you to borrow money. Unless you pay off the balance in full every month, you will be charged interest. Although there are some 0% interest and balance transfer offers, there can be hidden charges such as transfer fees as well as high interest rates once the offer period ends. Always check the terms and conditions before taking a credit card and make sure you know what the interest rate is, how you will afford the repayments and what you will be charged if you fail to make the minimum monthly repayment.

If you already have credit cards and cannot afford to make repayments or you are only making the minimum monthly repayment and being charged high levels of interest, contact a Welfare Adviser in the Advice and Counselling Service for advice about your options. You might also find it helpful to look at the debt section of our website.

Or you could contact the charity Stepchange for advice about your options.


Disclaimer:
Law, regulations and policies can change quickly. The information on our website is given in good faith and has been carefully checked but QMUL cannot accept responsibility for any errors or omissions. QMUL is not responsible for the content or reliability of the linked websites which are provided for further information.

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