Private student loans Private loans are generally only sought in addition to government student loans, rather than in place of them (for example if their student loan does not cover accommodation costs, or a student is studying a 2nd or postgraduate degree). A recent study of 1,900 students found the average student had a gap of £265 a month to fill after their maintenance loan. These loans are not guaranteed by a government agency and are made to students by banks or finance companies. Unlike Government loans the repayments do not vary based on future earnings, and the loan will not be written off after a certain period. Private student loan rates and fees-
Private student loans typically have variable interest rates while government student loans have fixed rates. Private loans often carry an origination fee. Origination fees are a one-time charge based on the amount of the loan. They can be taken out of the total loan amount or added on top of the total loan amount, often at the borrower's preference. All lenders are legally required to provide you with a statement of the "APR (Annual Percentage Rate)" for the loan before you sign a promissory note and commit to it. Unlike the "base" rate, this rate includes any fees charged and can be thought of as the "effective" interest rate including actual interest, fees, etc. When comparing loans, it may be easier to compare APR rather than "rate" to ensure an apples-to-apples comparison
Most private loan programs are tied to one or more financial indices, such as the BBA LIBOR rate, plus an overhead charge. Because private loans are based on the credit history of the applicant, the charges vary. Students and families with excellent credit generally receive lower rates and smaller loan origination fees than those with less than perfect credit.
Private loans in the U.K. are offered by the following companies :-
• HSBC - Postgraduate loans. • Barclays/Co-op - Professional and career and development loans.
• Prodigy Finance - MBA loans
• Ratesetter - Postgraduate loans
• Student Funder - Loans for Postgraduate and Professional courses
• Future Finance - Undergraduate and postgraduate loans