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Last updated: 16/10/2020 | Estimated Reading Time: 5 minutes

Graduate loans

Master’s courses in the UK can be very expensive, but the UK Government is now offering a loan of up to £11,222 to help you fund the next chapter of your studies. This guide will take you through the UK Government’s graduate loan, how to apply for it, whether you are eligible, and how you’ll go about repaying the loan.  

In This Guide:

What is the new graduate loan?

The UK Government are now offering a loan for postgraduate students wanting to undertake a Master’s degree at a UK University. This loan can be up to £11,222. This money can be used in any way you see fit, such as living costs, course materials or tuition fees. Master’s degrees can cost anywhere between £5,000 and £30,000, with UCAS quoting the average at around £11,000. This means that even the maximum loan may not cover your tuition fees. This is the greatest drawback of the Postgraduate Loan, considering that you will also have to fund your living costs whilst studying.

The Postgraduate Loan differs from undergraduate loans in that it is not means tested, which means the amount you receive is not affected by the income of you or your parents/guardians. The money itself is paid directly into your bank account in three approximately equal instalments spread out over your course. Note, however, that if you are studying part-time, payments will only be available for the first two years of study.

If you initially borrow less than the maximum available loan, you can up the amount you receive at any time throughout the duration of your course. Given how favourable the repayment terms are (see below), it is a good idea to borrow the full amount straight away to save you running out of money, and any excess could be placed in a Student Savings Account.

Am I eligible for the loan?

As is to be expected, there are limits on who can successfully apply for a Postgraduate Loan. You must meet the following criteria to be eligible:

  • You are a British or EU Citizen living in the UK for the past three or more years (if you are an EU citizen you must be resident in the UK on the first day of the course).
  • You will be under 60 years of age on the first day of your course
  • You are resident in the UK for purposes other than just studying
  • This is your first postgraduate degree (master’s or equivalent but not including postgraduate diplomas or PGCEs)
  • The course you are applying for is within the UK
  • You have no outstanding Student Loan repayments.

These rules are not definitive, and there may be some exceptions that could apply to you, so it’s always worth checking out the full and comprehensive list of criteria .

There are also rules on the kind of course that is eligible for a Postgraduate Loan. The general rule is that your course must be within the UK and that it leads to a ‘full’ Master’s qualification. It is not available for postgraduate course such as PgDip or PgCert, or courses covered by undergraduate loans. If you are at all unsure exactly what your course counts as, contact the course provider for advice.

How can I apply for a graduate loan?

You can apply for a Postgraduate Loan right away at . You do not need to have secured a place on your course to apply for the loan, and it is recommended that you apply as early as possible.

You will need a number of documents at the ready to make a successful application:

  • A valid UK (or EU) passport
  • Your Bank Account Details
  • Your National Insurance Number
  • The details of your course and course provider.

You will have to print you student declaration form and return it, along with any pieces of evidence you are asked to provide. You should try and do this as fast as possible so you are not met with delays.

Once you have completed your application, Student Finance England will send you an entitlement letter to let you know how much money you will be receiving and when your payments will be made.

How do I repay the loan?

Postgraduate Loan repayments work very similarly to those for undergraduate loans. The terms are generous, but it still helps to know a few things about how they work:

  • Repayments are taken directly and automatically from your salary
  • Repayments only begin when you have an income of more than £21,000 a year, but whether you pay can vary on how much you earn month-to-month
  • Income is not just your earnings – it can include any benefits or interest you earn
  • Repayments only begin after the April following your graduation
  • This loan will not affect your credit rating
  • The loan is subject to variable interest rate, and the interest accumulates from the day you receive the loan
  • The loan is written off after 30 years if you have not paid it off by that point
  • The Government can change the terms at any time, however these changes are likely to be minimal
  • You can apply for a Postgraduate Loan even if you have an undergraduate loan that still needs to be paid off

If you are unhappy with the terms of the Postgraduate Loan, you can use our loan comparison tool to compare graduate loans from different providers to find the best loan for you. However, it is unlikely that you will find something with better terms than the loan provided by the Government.