Postgrad versus bank loan

istead

Hello,

I am considering taking out a £10k postgrad loan.

I have a permanent job and will be going down to part time hours to study the course part time. Therefore I have a stable source of income and expect to return to full time work after the course finishes.

Maybe I am missing something, but the 3% + RPI rate offered on the postgrad loan seems strictly worse than a cheap £10k personal loan (e.g. 2.8% with TSB) unless inflation goes below -0.2%. Assuming I could get a 5 year loan at a rate close to 2.8%, I am confident I could repay it over that time frame, so am I right to say this seems a far better option that applying for the govt postgrad loan?

Grateful for your thoughts!

Iven

robber2

How do you know you will get a tsb loan at only 2.8%? I think its incredibly unlikely.

Rob

istead

Fair point... the soft loan checker on here says 50% chance, with 70% for a 3% loan from another provider (both over 5 yrs). So assuming I did get that rate, it'd make sense to take that rather than go for the postgrad loan.

Arleen

Sure, if you can get a better rate elsewhere then it makes perfect sense. Most people cannot.

Ed-1

istead wrote: »

Hello,

I am considering taking out a £10k postgrad loan.

I have a permanent job and will be going down to part time hours to study the course part time. Therefore I have a stable source of income and expect to return to full time work after the course finishes.

Maybe I am missing something, but the 3% + RPI rate offered on the postgrad loan seems strictly worse than a cheap £10k personal loan (e.g. 2.8% with TSB) unless inflation goes below -0.2%. Assuming I could get a 5 year loan at a rate close to 2.8%, I am confident I could repay it over that time frame, so am I right to say this seems a far better option that applying for the govt postgrad loan?

Grateful for your thoughts!

Iven

The question you need to be asking is firstly whether you expect to repay the full postgraduate loan in the 30 year repayment period before it gets written off.

The second is that the repayment rate is 6% above a threshold of £21,000. Fall on hard times (or even relatively modest times) and repayments stop. They don't with a commercial loan...