We recommend that you always use a government-backed scheme to fund your study where possible- see our Student Finance England for online courses guide.However, if you are not eligible or the fees for your chosen course are higher than the maximum student loan amount, then using an unsecured loan might make sense. Make sure you understand the impact and obligations taking out a loan with have on your financial situation. The Money Advice Service and Citizens’ Advice have excellent information about loans. The companies listed below provide commercial products and have stricter eligibility and repayment conditions than government loan schemes. Commercial loans can impact your credit rating. However, if you require a loan for your study, they may be a better option than a standard bank loan as they offer some flexibility around repayments whilst you are studying and for a set period upon graduation.
Will applying for a loan affect my credit rating?Yes, applying for a loan can impact your credit score. It can be positive over time if you make all your regular payments. However, just that action of applying for a loan will have a short-term negative impact on your credit score when the application is made. A lower credit rating can cause problems if you plan to get a mortgage or remortgage close to your application loan date. Experian is one of the main credit rating agencies in the UK, and they have advice on how loans can impact your credit score.
We recommend that you understand all the impacts before you make a loan application.
What will the interest rate be like compared to a government postgraduate loan?The interest rates on commercial loans are generally higher than on a government-backed postgraduate loan. You can find loans with a lower interest rate, but a student finance loan is far more flexible and has less risk- it will not impact your credit rating, and if you lose your job, your payment will pause. For students starting a course in September 2023, the government student loan is capped at a rate of 7.3% interest. We are moving into a world of higher interest rates than in the last decade. The excellent Martin Lewis website has a regularly updated guide to current interest rates on UK high street loans.
Unsecured bank loans to fund your master’s degree tuition feesIt is possible to use an unsecured loan from a high street bank to help with your study costs. These loans do not have any flexibility around repayments whilst studying or a grace period upon graduation. Still, they may offer a more attractive interest rate than a specialised tuition fee loan from the companies listed below. If you are considering using a bank loan for an online master’s degree, do your research and understand the risks and repayments. The money advice website is an excellent place to start.
Options for private postgraduate student loansSome commercial companies specialise in providing individuals with finance, specifically for the costs involved in higher education. We do not recommend or endorse any of the lenders of private student loans below; this list is to help you by showing what is available.
!!! We recommend that if you are planning on using a commercial loan, you make sure you understand APR and the repayment terms. You should always opt for the lowest % rate when taking out a loan and can afford the repayments !!!
LendwiseLendwise is a peer-to-peer lending service founded in 2018. They distribute funds from individual investors to students on postgraduate and professional courses:
- Loan amount – £5,000-100,000
- Eligibility – Loans are potentially available to students of all nationalities studying at UK universities and living in the UK
- Eligibility criteria – Applications consider your credit score and history, plus your work experience, current salary and academic qualifications, as well as the ranking, duration and mode of study for your course.
- Repayments – You will start repaying six months after you graduate
Prodigy FinanceProdigy Finance was founded in 2007. They focus on international students completing postgraduate courses in Business, Engineering, Law, Medicine and Public Policy at specific universities. These loans are targeted at courses provided by higher-ranking universities with fees that reflect this.
- Loan amount – £10,000-220,000
- Eligibility – Loans are potentially available to international students from 150 countries studying at selected universities; support may also be available for UK students studying in the UK.
- Eligibility criteria – Applications consider your salary, credit score and savings; loans are only available for approved subjects and degrees.
- Repayments – Full-time students begin repaying 6 months after graduation; part-time students begin repaying 3 months after receiving their first loan payment.
Danske BankDanske Bank is a Danish retail bank founded in 1871. It offers postgraduate loans for tuition fees:
- Loan amount – From £1,000 up to the maximum amount for your fees
- Loans are designed for UK students on courses lasting up to three years
- Lower repayments for the first 30 months
- No early repayment charges