Mature Student- Masters Degree Loan

aadd

Hi im starting a part time 2 year Uni course in a few weeks, Im currently working a will be taking some time off to attend the course.

I was thinking I may take the Masters Loan out with student finance england of 10K to pay for the course, ( I have the money but am saving for a deposit for a house) The interest rate on the loan is currently 6.1%.

Rate is set by adding 3% to the Retail Price Index (RPI)

So am I rite in thinking that would cost me £610 over the 2 years Fixed. So I wouldnt pay anymore that that? Im trying to find out if its worth taking the loan or not.

thanks

agrinnall

I've put your figures into three loan repayment calculators online, two agreed that the amount repayable would be £10,647, the third said £10,630.

Ed-1

aadd wrote: »

Hi im starting a part time 2 year Uni course in a few weeks, Im currently working a will be taking some time off to attend the course.

I was thinking I may take the Masters Loan out with student finance england of 10K to pay for the course, ( I have the money but am saving for a deposit for a house) The interest rate on the loan is currently 6.1%.

Rate is set by adding 3% to the Retail Price Index (RPI)

So am I rite in thinking that would cost me £610 over the 2 years Fixed. So I wouldnt pay anymore that that? Im trying to find out if its worth taking the loan or not.

thanks

No that's not right. As the rate is based on the March RPI which changes every year the rate is only 6.1% until 31st August 2018 after which it will change again based on the March 2018 RPI and then each year thereafter until the loan is paid off or written off after 30 years.

aadd

Ok, I have the money to pay for the course but im saving for a deposit for a house. Hence why i thort about taking the loan. Do you think its worth taking the loan or just paying for the course out of my savings?

Voyager2002

aadd wrote: »

So am I rite in thinking that would cost me £610 over the 2 years Fixed. So I wouldnt pay anymore that that? Im trying to find out if its worth taking the loan or not.

Interest will be charged up until the moment when the loan is repaid. So if you repay after two years your estimate is about right. If it takes you longer to repay you could end up paying far more in interest.

If you have the money, why pay a fortune in British tuition fees when you can pay a minimal amount or nothing to take a Masters at an EU university? For instance, there are no fees at all at universities in Norway.

Ed-1

Voyager2002 wrote: »

Interest will be charged up until the moment when the loan is repaid. So if you repay after two years your estimate is about right. If it takes you longer to repay you could end up paying far more in interest.

If you have the money, why pay a fortune in British tuition fees when you can pay a minimal amount or nothing to take a Masters at an EU university? For instance, there are no fees at all at universities in Norway.

Given the repayment for postgraduate courses is set at 6% of earnings over £21,000 you'd be on a salary of over £100,000 to repay the loan in 2 years, unless you make voluntary repayments. But why would you make voluntary repayments when there is an incentive to pay as little as possible to increase the chance of the Government writing the rest of the loan off when it expires after 30 years?

aadd

Thanks Ed-1 good point