Loans for postgraduate study

There are a number of loan options that may be available, but many come with high interest rates or expensive repayment terms. For information about Government loans please see our Government Student Finance for postgraduate study webpage.  

What to consider  

Bank loans, private student loans and other private and payday lending loans may seem attractive but their terms and conditions such as high interest rates or immediate repayments tend to make many of them unsuitable for students.  

A credit card is another type of loan which enables you to borrow money. However, unless you pay off the balance in full every month, you will be charged interest.  

Although there are some 0% interest and balance transfer offers, there can be hidden charges such as transfer fees as well as high interest rates once the offer period ends. Always check the terms and conditions before taking a credit card and make sure you know what the interest rate is, how you will afford the repayments and what you will be charged if you fail to make the minimum monthly repayment. 

Step Change and National Debt line provide advice and support if you already have credit cards and cannot afford to make repayments or you are only making the minimum monthly repayment and being charged high levels of interest.

Shariah-Compliant Loans 

Some students don’t feel able to take Government Student Finance loans for faith reasons, due to the interest payment system. Interest is charged on Student Finance loans from the day they are paid until the loan is repaid or written off, whichever is first. The interest is added to the total amount owed every month. The gov.uk website explains interest rates.  

If you decide for not to take loans for your studies you would need to find alternative funding such as family, friends, savings, etc, to cover the cost of your education.  

• Banks often want to see evidence of a Student Loan before opening a student account with the interest-free overdraft facility.  
• Some trusts and charities may require students to first take out any government student loan before applying for financial support.  
• If you are entitled to claim welfare benefits as a student, the officer assessing your benefit claim will assume you have taken your loan entitlement and will reduce your benefit entitlement accordingly. 

Sharia-compliant financing  

The UK government has been exploring the possibility of an alternative finance system available alongside traditional student loans that avoid the payment of interest but results in identical repayments to the conventional system. This funding would be Sharia (Shariah, Shari’ ah) compliant and overseen by a Sharia advisory committee. The UK government undertook a public consultation ending in September 2014 which resulted in an agreement to offer an Alternative Finance product. This 'Takaful' product received preliminary approval from Al Rayan Bank's Sharia supervisory committee and chapter 4, paragraphs 27-36 of the November 2015 government green paper 'Fulfilling our potential Teaching Excellence, Social Mobility and Student Choice [PDF 2,197KB] sets out the details of this. It is also referenced in Success as a knowledge economy' [PDF 13,948KB] dated May 2016.  

Unfortunately, there has been no movement on this to date but we will update this page if there is any news. 

Some financial institutions have Sharia-compliant financial services. They guarantee that money held in these accounts is not invested in industries such as gambling, alcohol or weapons manufacturing.   

National Zakat Foundation   

If you are a Muslim student and your motivation for doing your course is to serve your community, then you may apply for a grant towards your tuition fees and learning resources from the Education Fund at National Zakat Foundation. Detailed advice about eligibility and the different areas of study they fund is on their website.