Big or Litte Loan?

Roro_2

I'll be starting a PhD in September, it will be full time, and I shall be working around 20 hours a week.

I can't afford the course fees, so I was wondering whether it would be better to get a loan for most of the fees up front, or to get little loans over the course of my studies, eg £8000 up front or £4000 for two years.

I should point out that I'm not eligible for a career development loan, and I am attempting to crowdfund money for my fees too, google Sumerian Xmas Pudding (I'm too new to post a link)


Thanks

Tixy

Borrowing the full £8,000 initially means you will be paying interest immediately on money that is just set up in a bank account.

And your monthly repayments will be much higher in the first year than for a £4k loan (assuming taken over the same term).

For many people there would also be a greater risk of them overspending and not ensuring they do put away half of it until the second year.

And the £8k loan will be harder to be accepted for on an affordability basis (what is your income going to be to service that loan on the 20h a week job?, do you already have that part time job?)

Downsides to the idea of trying to obtain 2 smaller loans, 1 each year, is what you will do if you find you cannot get accepted for the second loan in year 2. And that potentially the APR could be higher on smaller sized loans.

Roro_2

Yeah, that is part of the worry, there is the temptation to spend the other half, and also paying interest on money I don't need yet, vs. the risk of not getting the second loan.

I can also reapply for funding next year, though the chances of getting that a slim to none. There's no real money in the humanities, so competition is fierce.

I do already have my part-time job, and have used it to fund my masters, though I am looking for a better one. I get paid £6.87 an hour, and often find myself doing a fair bit of overtime. I know it is going to be hard getting the loan, but my credit rating is excellent, and I'm used to have almost no money day to day.

thebritishbloke

You're paying to do your PhD? Have you not looked into asking a university if they will fund you? I know a fair few people who are doing their PhD's and they all get £13,000 tax free funding p.a from the university (and there's no course fees).

A career development loan may be a better option, Barclays offers one which you can see here.

I genuinely wouldn't recommend doing a PhD unless you find a university to sponsor you.

Roro_2

I'm doing an Arts/Humanities subject so there is very little money for PhD students. I've applied but got turned down despite having 'an excellent application'. It's quiet easy to get it in the sciences though.

Also I'm not eligible for the Careers Development Loan. There aren't that many options available to me.

I've thought Long and hard about whether I want to take the risk or not, and I do, so now I'm trying to figure out the safest way to do it.

I could go part-time which would half the cost of each year, but still add up to the same amount by the end, but then I'd have to pay tax, which would add up to the same amount monthly as taking a loan.

Tixy

Realistically I cannot see you getting accepted for a loan of £8k with an gross income of less than that amount. Even a £4k loan could be difficult to get accepted for.