Professional Development Loans

What is it?

A bank loan to cover fees, living costs or specific expenses (eg an elective). Repayments are deferred until after you graduate and include interest which is also charged whilst you’re studying. Professional Development Loans are available to UK residents only.

Is it the same as a Career Development Loan (CDL)?

No. You pay all the interest on a Professional Development Loan whereas the government pays the interest on a CDL during your studies. If you can get Student Loans you can’t get a CDL but you may be able to get a Professional Development Loan. 

Where can I get a Professional Development Loan?

HSBC, NatWest and Lloyds TSB all currently have professional development loan schemes. Each has a different name for these ie Further Education Loan (Lloyds TSB); Professional Trainee Loan (NatWest|) and Professional Studeis Loan (HSBC). Before taking a loan it’s important to shop around as interest rates, fees and eligibility for study loans can vary between banks.

What should I check when comparing different loans?

• The annual percentage interest rate (APR) – this may be fixed or variable (e.g. ‘floats’ 5% above the Bank of England base rate). Remember that a variable rate will currently be lower than the fixed rate but is more risky as interest rates can rise
  
• Is the loan given in instalment or as one payment?  Interest is charged from when you receive the money so you should immediately transfer the loan to a high-interest savings account or an ISA. Only keep the minimum you currently need in your current account
  
• Is there an arrangement fee? Check if it is paid upfront or added to the loan (where you will also be paying interest on it)
  
• How many years do I have to repay the loan? Make sure that repayments seem affordable (remember you will be paying off student loans as well). The
  longer the repayment period, the more interest you will end up paying in total
  
• Is there a redemption (early repayment) fee? You can save a lot of money in interest by repaying the loan early but the bank may hit you with a fee for doing so
  
• Do I need to hold my main account with the bank offering the loan?
  
• Are there any other fees or requirements (eg life insurance)?
  
• How long will it take to arrange the loan? You may be able to apply before you begin your studies if you already have a place at med school but always allow plenty of time
  
• Can I take a loan from my first year of study? The rules vary between banks. Younger students who are studying medicine as a first degree are not usually eligible until the later years of their course. Most banks allow graduates or mature students to take out a loan from their first year of medical studies but may require evidence of previous study or employment.
  
• How much will a Professional Development Loan cost me? Thomas, a graduate, is borrowing £20,000 to fund medicine as a 2nd degree. See the related link for how much he’ll pay in interest and how he can save money by repaying early

	By the end of my engineering degree, I knew it wasn’t for me. I already had science A-levels so I’ve spent the last 18 months working as a Health Care Assistant whilst applying to med school. I was turned down for two 4-year courses but then Sheffield offered me a place on their 5-year programme. I’ve got to pay my own tuition fees so I took a Professional Development Loan. It’s a lot of money, along with more student loans, but I’ve still got plenty of years of work ahead of me and I want to be doing something I enjoy. In the end I just thought go for it.

Where can I get more details about Professional Development Loans?

Check the website links in the right hand menu. More detailed information and leaflets will be available from bank staff. If they don’t seem knowledgeable, ask for contact details of the nearest student or graduate account manager. Bank branches which deal regularly with university students may be more familiar with study loans.

Tips on applying for your loan

Make an appointment with the bank (preferably with a student or graduate account manager). In this meeting be prepared to explain in detail why you need to borrow money.
Use the meeting to get a clear explanation of interest, fees and repayment details. If you are unsure or unhappy with any aspect of the loan, don’t feel pressurised into signing anything – take away the information to read in your own time.

Don’t forget to bring these along to your appointment:

• A completed application form and any documents requested by the bank
  
• A detailed budget and evidence of your current or prospective income (student loan statement, evidence of any bursaries, pay slips, bank statements showing other income or savings)
  
• It is a good idea to provide details of how you intend to repay the loan. Newspaper articles on GP salaries or salary information from NHS Careers might help to convince the bank that you are a safe investment.
  
• The bank’s own leaflet or website information about the loan to prove that you meet the eligibility requirements. Bank staff are not always clear about rules for graduates and mature students – confusion can be avoided if you have the information handy