Postgraduate Loan vs Bank Loan

Owain_8

Hi new member here. I know this has been discussed before I was just wondering if any of the previous posters has experience of what they decided to do.

I'm a doctor about to start a postgraduate doctoral degree. The job is a full time research job in the NHS and has a significant pay cut compared to my clinical jobs. University fees are on a part time basis with a total cost of approx £8000.

I still have a plan 1 (I think the current interest rate is 1.2%) undergraduate loan with aprox 19K left on it.
I need to borrow to fund the degree so should I go for a post grad loan from the SLC at 6.1%APR. I think this would work out around £160per month salary deduction. The only advantage of this I can see is should I stop earning at any point repayments would stop or a bank loan at around 2.8% APR which would cost me around £140 per month over 5 years.

I expect to pay back all student loans within the 30 year cut off.

I'd rather not line anyones pockets unnecessarily but should I trade extra APR for some sort of security should I not be able to work in the future.

Cheers Owain

DCFC79

Owain_8 wrote: »

Hi new member here. I know this has been discussed before I was just wondering if any of the previous posters has experience of what they decided to do.

I'm a doctor about to start a postgraduate doctoral degree. The job is a full time research job in the NHS and has a significant pay cut compared to my clinical jobs. University fees are on a part time basis with a total cost of approx £8000.

I still have a plan 1 (I think the current interest rate is 1.2%) undergraduate loan with aprox 19K left on it.
I need to borrow to fund the degree so should I go for a post grad loan from the SLC at 6.1%APR. I think this would work out around £160per month salary deduction. The only advantage of this I can see is should I stop earning at any point repayments would stop or a bank loan at around 2.8% APR which would cost me around £140 per month over 5 years.

I expect to pay back all student loans within the 30 year cut off.

I'd rather not line anyones pockets unnecessarily but should I trade extra APR for some sort of security should I not be able to work in the future.

Cheers Owain

Are you dead certain to be accepted at the 2.8% ?

DrEskimo

Hey Owain,

Is there not a possibility to get a funded post-doc? Either through existing money or by applying for various research grants?

Ed-1

Owain_8 wrote: »

Hi new member here. I know this has been discussed before I was just wondering if any of the previous posters has experience of what they decided to do.

I'm a doctor about to start a postgraduate doctoral degree. The job is a full time research job in the NHS and has a significant pay cut compared to my clinical jobs. University fees are on a part time basis with a total cost of approx £8000.

I still have a plan 1 (I think the current interest rate is 1.2%) undergraduate loan with aprox 19K left on it.
I need to borrow to fund the degree so should I go for a post grad loan from the SLC at 6.1%APR. I think this would work out around £160per month salary deduction. The only advantage of this I can see is should I stop earning at any point repayments would stop or a bank loan at around 2.8% APR which would cost me around £140 per month over 5 years.

I expect to pay back all student loans within the 30 year cut off.

I'd rather not line anyones pockets unnecessarily but should I trade extra APR for some sort of security should I not be able to work in the future.

Cheers Owain

When was your plan 1 loan course start date? If between 1998 and 2005, that loan's written off at age 65, or (as the higher balance suggests) if it was post-2006 (but pre-2012) then it's written off after 25 years. Interest rate currently 1.5% but will likely rise as base rate rises. Repayment 9% over £18,330.

As for doctoral loan, that's £25,000 and repaid at 6% over £21,000. Written off after 30 years. It's a trade off. But with the 6.1% interest rate (6.3% from September), you'd have to earn a lot of money over those 30 years to pay off £25,000 + interest when repayments taken are only 6% over £21,000.

Owain_8

Thanks for the responses .

DCFC79. I see no reason why not. clear credit history. no other debt except mortgage and previously stated student loan

dr eskimo- my research is funded by the NIHR so they pay my salary but not specifically the associated degree. I need the money to live from I won't be able to save enough to completely cover the tuition fees .

ed-1- My undergraduate loan started sept '06. I started repaying in 2011. Theres nothing I can do about that currently pay around £300 a month in salary deduction so I think I have 5ish years before this is paid off. With regards to the doctoral loan I'm only looking for 8K to cover the tuition fees not 25K. So if i went down the SLC route will definitely pay it off.

[Deleted User]

Owain_8 wrote: »

DCFC79. I see no reason why not. clear credit history. no other debt except mortgage and previously stated student loan

You mentioned a significant pay cut. That may be one reason why not.

What income will you be on?

Pixie5740

In your shoes I would take the student finance. You're going to be living off a reduced income whilst you do your post doc so can you afford to live off the reduced income minus another £140+ for personal loan repayments? I'd rather have the breathing space that comes with student finance.

Student finance is not reported to the credit reference agencies so that may or may not be an important factor to you once you complete your post doc. There's nothing stopping you from making overpayments to your student loan once you've finished your post doc to reduce the amount of interest payable.

You might struggle to find a lender who will allow you to borrow money to fund study. You could always fib, I'm sure many do, but personal loan applications usually ask if you expect your income/expenditure to change during the loan term or in the very near future and of course your income will drop.

DrEskimo

Owain_8 wrote: »

dr eskimo- my research is funded by the NIHR so they pay my salary but not specifically the associated degree. I need the money to live from I won't be able to save enough to completely cover the tuition fees .

Ah OK. I presume you are costed in as a salaried research staff on a RfPB or Programme grant?

I know these grants do not directly allow PhD funding, but my old university used to just use some of the overhead costs to cover the fees...Now i'm not suggesting you do this exactly, but I would seriously discuss this with the head of your research department and ask if there are additional funds you could use to cover the fees. It's in their interest as much as yours to get a completed PhD student for their department. Considering the main bulk of your funding is covered directly by a NHIR grant, you are not asking a lot IMO. It's not uncommon for there to be unallocated funds left over from other monies that need to be spent before they are clawed back by their respective funders.

If you have exhausted all these options to getting the fees covered for you by the University, then my preference would also be the Post-Doc loan.

Good luck! Interested to hear what your PhD will be on, but don't want to derail the thread