Post grad loan or self-fund - will I gain on interest if I take the loan?

doriangray23

If I do a Master's, I can get a loan of £12,000.
I'm looking at three courses, each costing £5,500, £7000 or £10,800 (I will pick one).

I earn more than £21,000 but less than £27,000 a year, and will be studying part time.

If I take the loan, will I gain more interest by putting the bit I don't need into a good savings account (let's say 4.5% although I know some are greater) than I will lose by paying it back? Or will I lose* either way?


*I'm not losing, because it's education and I like that. But the lowest cost course I could likely fund myself and I'm wondering whether that's sensible or silly.

easyasonetwothree

What's the interest rate on the loan?

Ed-1

doriangray23 said:

If I do a Master's, I can get a loan of £12,000.
I'm looking at three courses, each costing £5,500, £7000 or £10,800 (I will pick one).

I earn more than £21,000 but less than £27,000 a year, and will be studying part time.

If I take the loan, will I gain more interest by putting the bit I don't need into a good savings account (let's say 4.5% although I know some are greater) than I will lose by paying it back? Or will I lose* either way?


*I'm not losing, because it's education and I like that. But the lowest cost course I could likely fund myself and I'm wondering whether that's sensible or silly.

You'll struggle to find a savings account paying more than 7.8% which is the current rate on postgraduate loans (nornally RPI +3%).

Voyager2002

What are your expectations for your income over the years to come?

If you expect to be low-paid then you will never repay the loan; never make any interest payments; so in effect it is free money.

Ed-1

Voyager2002 said:

What are your expectations for your income over the years to come?

If you expect to be low-paid then you will never repay the loan; never make any interest payments; so in effect it is free money.

The repayment threshold for postgraduate loans is £21,000 which is below national living wage.