HSBC Professional studies loan - major debt, can anyone advise?

drsusan

Hi, Ive recently joined the forum as Ive just finished uni and am faced with a large amount of debt.

Ive just finished studying medicine in London and in order to do this in addition to my standard government loan (which im not worried about after reading Martin's article) I also took out a professional studies loan from HSBC in 2006, borrowing a total of £16,998 which will be repaid with 95 monthly repayments of £270.28 with a 9month holiday so payments start in February 2010. At the time of taking out the loan the pay for doctors was a lot different, but now new doctors are working less hours and pay has been cut.

I will be living in London and earning around25,000 a year before tax, paying off this loan and around £50 a month for the government loan. It has suddenly all sunk in and I am not sure if this is even possible.
My questions are 1. does anyone have any advice!
2. Is it worth starting paying back without this 9 month holiday and does anyone know if this is possible with HSBC? I cant find it in the documentation
3. Is it worth taking out a different loan to pay this one off as the interest rate is 2.75% above base rate

any advice welcome thankyou

gommsta

Hi

I also have a PSL with HSBC but for 60,000 pounds. I feel your pain!

1) Your loan is at 2.75% above base rate. You're not going to get a better rate than this anywhere at the moment. I've looked around the other banks and have been categorically told that they don't have anything that can touch it. (I'm on BOE +2)
2) Start paying back as soon as you start earning. The interest you're paying on the loan is as low as it's really going to get so best take chunks out of the loan now so as to counteract the interest rates when they do actually increase.
3) I've found HSBC to be very helpful with any queries. I'd recommend emailing Margaret.Nixon at hsbc dot com to see what is possible.

Hope this is of some help.

drsusan

thanks for the contact, and the empathy!, ill get in contact and see what happens :cheesy:

jonesMUFCforever

gommsta is correct with base rate at .5% you won't get a cheaper loan.
You could ask the bank whether you can pay off lump sums on an ad hoc basis before the repayments kick in (however the monthly repayments might be the same and you would pay it off earlier).

TEDDYRUKSPIN

The loan is cheap but try and pay it off as early as possible. It is only cheaper not due to the base rate being low.

£25k for being a junior doctor? I believe you have missed the other second pay you get. LOL. I do not believe you have actually worked out the salary. You will obtain another NHS allowance for working in London as well. Also I would add another £10k to your pay easily......
Stop worrying. Cutting hours or not, the average salary for a junior doctor is £35k a year start. This rises very quickly in less than 5 years to £55k and above when you start to enter your specialist role. When you become senior and you start to hate the hours you are working (LOL!!!!), you will be on £65k-£75k per year and wished you stayed as a junior doctor! LOL.

Stop worrying. You will have this loan paid off within 5 years. You will probably not want to pay it off. Ha.... I have seen alot of friends who are doctors, lawyers, accountants, pharmacists not paying it off. Besides, HSBC no longer provide these loans to newbies.

Good luck.

drsusan

TEDDYRUKSPIN wrote: »

The loan is cheap but try and pay it off as early as possible. It is only cheaper not due to the base rate being low.

£25k for being a junior doctor? I believe you have missed the other second pay you get. LOL. I do not believe you have actually worked out the salary. You will obtain another NHS allowance for working in London as well. Also I would add another £10k to your pay easily......
Stop worrying. Cutting hours or not, the average salary for a junior doctor is £35k a year start. This rises very quickly in less than 5 years to £55k and above when you start to enter your specialist role. When you become senior and you start to hate the hours you are working (LOL!!!!), you will be on £65k-£75k per year and wished you stayed as a junior doctor! LOL.

Stop worrying. You will have this loan paid off within 5 years. You will probably not want to pay it off. Ha.... I have seen alot of friends who are doctors, lawyers, accountants, pharmacists not paying it off. Besides, HSBC no longer provide these loans to newbies.

Good luck.

I can assure you that no, that is in fact my pay with london waiting, without it is 22,000 for a starting salary, unbelievable I know and that is why a lot of student doctors have been trying to raise the profile by demonstrating etc but most people still think we are big earners. I have just had this confirmed by my hospital. The pay does rise yes but not significantly until i specialise in about 6 years whilst this loan will be gathering more interest, many SHO's and specialists are also facing pay cuts as the NHS continues its inevitable decline. I perhaps should also mention that i am a graduate med student and therefore have debt from my previous degree so my debts total around 50,000. I will try to pay off as muc h as I can as soon as I can but I would advise anyone who isnt from a privileged background who wants to do medicine (of which there are very few) to only do this degree if you have wanted to do it for a long time as the costs, financial and otherwise, are huge.

CLAPTON

With a low rate of interest on the loan, I would suggest you don't start paying immediately but save as much as you can so you have a little financial buffer for things like flat deposit or whatever... just make you save it though and don't waste it.
You're virtually certain to have a steady rise in income so there's no point in rushing to pay in any case.
If you save the money and interest rates do rise then you can always consider using the money to pay off the loan but frankly you can just about match that in a saving account.