Using a Loan to Pay University

Rowlands

I am considering paying my university accommodation in full via a loan... I know it's insane...

The Uni I will be studying at want 7 payments of £897 which is £6279 a year.

I simply can't afford that every month, even with my student living loan and a job + family support (trust me I have a spreadsheet)

Now here's the fun part:

The university offer a 5% discount for paying the sum in full, and I've found a HSBC personal loan for £6000 which I am eligible for. The loan only has a 3.3% interest rate and would spread the cost over 12 months. Leaving me with roughly £300 more money every month.


Any advice/thoughts would be great, thanks

Owain_Moneysaver

You're paying over 12 months but do you get 12 months accommodation?

Would you be stuck outside term time paying both the loan and rent on non-uni accommodation?

Work out the total payable with compound interest as a 3.3% loan might not actually be cheaper than not getting a 5% discount.

Rowlands

Owain_Moneysaver wrote: »

You're paying over 12 months but do you get 12 months accommodation?

Would you be stuck outside term time paying both the loan and rent on non-uni accommodation?

Work out the total payable with compound interest as a 3.3% loan might not actually be cheaper than not getting a 5% discount.

I get closer to 10 months accommodation (from September to July) however I would be moving back home during the other two months where I pay quite low rent so this wouldn't be an issue, in fact I would be working full time during this period so I'd have much more money.

I've calculated the interest and I am indeed better off doing it this way, but thanks for that I wouldn't of thought about it.

YorkshireBoy

Is the HSBC loan a special one for students? Because the tipping point for 3.3% on their website seems to be for >£7K loans. EDIT: I see they have a graduate loan at the rate/amount you state.

When you say "eligible for" do you mean all they want is a signature?...or simply that you're eligible to apply for it (like 1,000s of other people are)?

Rowlands

YorkshireBoy wrote: »

Is the HSBC loan a special one for students? Because the tipping point for 3.3% on their website seems to be for >£7K loans.


When you say "eligible for" do you mean all they want is a signature?...or simply that you're eligible to apply for it (like 1,000s of other people are)?

I mean eligible as in I simply need to sign and it's mine

[Deleted User]

Rowlands wrote: »

I mean eligible as in I simply need to sign and it's mine

Are you sure about that and about the APR they might offer you ?

Pixie5740

Are you absolutely positive that you can obtain a £6k loan from HSBC with an APR of 3.3%? When I look at personal loan rates on HSBC's website the representative APR for a £6k loan is 6.1%. The representative APR of 3.3% is for personal loans between £7k and £15k.

I would be very surprised if HSBC, a notoriously choosy lender, would give a student with a part time job a £6k loan especially one to be repaid over 12 months. I'm not saying it's impossible but I wouldn't put money on it.

In theory your idea could work if you can a loan at that sort of rate.

YorkshireBoy

Pixie5740 wrote: »

Are you absolutely positive that you can obtain a £6k loan from HSBC with an APR of 3.3%? When I look at personal loan rates on HSBC's website the representative APR for a £6k loan is 6.1%. The representative APR of 3.3% is for personal loans between £7k and £15k.

I would be very surprised if HSBC, a notoriously choosy lender, would give a student with a part time job a £6k loan especially one to be repaid over 12 months. I'm not saying it's impossible but I wouldn't put money on it.

In theory your idea could work if you can a loan at that sort of rate.

It seems it's a graduate loan, for which HSBC do offer 3.3% on £6K. OP must be doing some kind of post-grad study?...and be within 5 years of graduation.

Pixie5740

I wonder what HSBC will count towards the £10k annual income....

enthusiasticsaver

If it really is 3.3% and you are happy to pay it over 12 months then it sounds feasible.

Rowlands

Just to clear things up, it is a graduate loan, I have been told that all I would need to do is sign some paperwork. I might only work part time but I work long hours.

Thank you for all the comments so far.