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Some banks and other lenders offer private student loans for Masters degrees or other postgraduate courses. Postgraduate bank loans are different to the postgraduate student loans provided by the UK Government. They are offered based on your financial circumstances and will usually need to be repaid in set instalments within a specific period.
This page explains how personal loans for postgraduate study typically work and provides some information on UK lenders that currently offer them. The information here is not offered as financial advice and we don’t endorse or recommend any individual lenders or products.
Postgraduate bank loans are private student loans offered by commercial lenders rather than government student finance agencies. Unlike other personal loans they are designed specifically for students studying Masters degrees or similar courses.
Lenders assume that your postgraduate degree will improve your future earnings and career prospects, allowing you to repay the money they lend you to help with tuition fees and living costs.
Most of these loans take into account the course you are studying as well as your financial background. They use this information to set their eligibility criteria and to decide how much they will lend you.
In a sense, these loans represent an investment in your potential as a postgraduate student. However, this is a commercial investment and lenders will expect to generate profit through the interest they charge you. It’s very important not to confuse private student loans with government postgraduate loans.
This page gives a general overview of how private student loans work for postgraduate degrees. We hope it helps you make sense of this option, but we can’t offer a comprehensive guide to every loan product out there. You should check with specific lenders – and make sure you consider other funding as well.
Most private loans will allow you to borrow more than a UK postgraduate loan (currently £11,222 for English-resident students). Some offer maximum loans of £100,000 or more, making them suitable for more expensive postgraduate courses such as MBAs or postgraduate Law degrees.
In most cases the amount you can borrow will be based on your circumstances. Lenders will consider how affordable they think your repayments will be (based on factors such as potential future earnings for your course). They will then offer a loan amount and interest rate tailored to you.
Some postgraduate bank loans are also linked to your tuition fees: you may only be able to borrow what your course costs, or the amount you can borrow specifically for living costs may be capped.
Money for tuition fees will be paid directly to your university; money for living costs will be paid to you in regular instalments.
Lenders are free to set their own rates (just as they are for other personal loans). What makes personal loans for postgraduate study different is that the course you are studying will help determine how ‘risky’ your loan is perceived to be and, therefore, how high your interest rate is.
You will usually be given your personal interest rate as part of your loan offer. This may be fixed for the duration of your loan, or it may vary.
Some lenders will provide a representative APR for their loans. Others will wait to calculate an actual APR as part of your loan offer.
Annual Percentage Rate (APR) is a simplified way of predicting the cost of a loan. It takes into account your interest rate plus any other charges. APR is given as the percentage of the amount borrowed that will be added to your debt each year. So, if you borrow £1,000 and have an APR of 10% your loan will be costing you £100 a year.
You should make sure you understand the cost of any loan you take out for a postgraduate degree. Your lender should be able to provide clear information about its payments. You can also check other sources of advice.
Repayment terms for private student loans are very different from government postgraduate loans. They won’t be income-contingent (linked to your earnings). Instead you will have to repay a minimum amount each month for a set period. You will also be expected to repay your loan in full (your debt will not be cancelled after a set time like a government loan).
Actual terms will be set by each lender. Some will start taking repayments as soon as you receive your loan; others may offer reduced repayments whilst you study and / or a ‘grace period’ while you look for work.
Before moving on to eligibility, it’s important to be very clear about what this page covers and ensure you don’t confuse these loans with other types of funding:
You can read about other types of postgraduate funding elsewhere on our site.
Most lenders will consider applications from all students aged over 18 studying a Masters degree or other postgraduate course. Unlike UK student finance they won’t set hard restrictions on upper age limits or existing qualifications.
However, commercial funders will also consider a range of other factors when deciding whether to offer you a loan. This information will also be used to determine how much you can borrow and what your interest rate and repayment terms will be.
Each postgraduate lender will set its own criteria and weight them differently, but they are likely to include some or all of the following:
Most lenders use their own algorithms to quickly process this information when you ask for a quote.
Private loans don’t usually restrict eligibility to UK or EU students, though some lenders may have their own nationality criteria.
Getting a quote for a loan may not show up on your credit history but making an application usually will. You should check this in advance if you aren’t sure.
Private postgraduate loans will take account of your credit rating (this makes them different from government postgraduate loans). However, a poor credit score can sometimes be offset by other factors such as the reputation and future earnings potential for your course.
Postgraduate lenders know that many students may not have had time to build up a credit history. They may offset this by paying more attention to course-related factors or allowing you to provide a guarantor (see below).
A guarantor is someone (such as a family member) who agrees to take responsibility for your debt if you are unable to make future repayments. Some postgraduate lenders may ask you to provide a guarantor if you have a limited credit history.
The terms for your loan will be partly based on the Masters degree or other course you are studying. You will therefore need to confirm that you have been accepted before your loan can be finalised. Each lender will have their own process for this.
Various organisations offer private loans for Masters degrees and other postgraduate courses. Many have been set up to cater specifically for postgraduate students; others are established retail banks.
We can’t provide a comprehensive list of postgraduate lenders and their products, but what follows is a small selection to give you a sense of how these loans might work.
FindAMasters does not specifically endorse or recommend any lender or product mentioned on this page. You should check their websites for the most detailed and up-to-date information.
Future Finance is a specialist student lender, founded in 2014. They offer specific loans for postgraduate study:
Lendwise is a peer-to-peer lending service founded in 2018. They distribute funds from individual investors to students on postgraduate and professional courses:
Prodigy Finance was founded in 2007 and offers private student loans using funds from approved investors. They focus on international students completing postgraduate courses in Business, Engineering, Law, Medicine and Public Policy:
Danske Bank is a Danish retail bank founded in 1871. It offers postgraduate loans for tuition fees:
You can use a credit card to pay your Masters fees (most universities will accept payments in this way).
However, you should check the details for interest and repayments. Many credit cards offer low interest (or even 0% interest) for a fixed period, but rates may increase substantially after this. Make sure you have a plan for dealing with the repayments.
You can use a standard personal loan for your Masters fees or postgraduate living costs.
However, because they aren’t designed for students, these loans may have stricter eligibility criteria that don’t consider your course and focus much more on your credit score and history. Their repayment plans are also unlikely to take account of the time you spend studying.
You should also be very wary of which loans you consider. Short-term ‘payday’ loans are not suitable for students: their high interest rates mean that the amount you owe will have risen substantially before you graduate and earn enough to begin repayments.
Postgraduate bank loans are very different from government postgraduate loans offered through official UK student finance agencies.
All students from England, Wales, Scotland and Northern Ireland have access to these ‘public loans’, subject to some eligibility criteria. EU students can also access them in 2019-20.
We think you should always consider a government student loan first, but you may wish to investigate private student loans if you need extra funding for your Masters, or if you aren’t eligible for a standard student loan.
Here’s how bank loans compare to government loans:
Students from all parts of the UK and EU can access government student loans for Masters degrees and other postgraduate courses. You should learn more about these before considering private student loans.
Private Masters loans can be an option if you aren’t eligible for UK student finance or if you need some extra funding for your course. However, it’s important to think carefully before taking out a commercial loan for your Masters.
Here are some advantages and disadvantages for you to consider:
Postgraduate bank loans do have some advantages over more ‘traditional’ funding:
It’s no secret that relying on commercial finance has drawbacks that don’t apply to other postgraduate funding:
Whatever your circumstances, private loans almost certainly aren’t your only means of paying for postgraduate study.
We provide detailed resources for other funding options, including government loans, university scholarships and funding from charities and trusts. We’ve also covered other topics such as crowdfunding a Masters and seeking support from your employer.
You can also sign up to our newsletter for regular and completely impartial advice and news about postgraduate funding.
We can explain how different funding works, but we can’t offer financial advice. If you do need help or have a question about applying for a loan in your circumstances, we recommend you check the following services:
We currently list over 20,000 Masters degrees and other postgraduate courses, worldwide