Useful info about HSBC professional studies loan

[Big_D]

Hi folks,

I've just been through the PSL application process with HSBC and thought it might be helpful to post my experience for anyone else who is considering this loan.

http://www.hsbc.co.uk/1/2/personal/c...e-service/loan


In all, I had 3 meetings with the person at the branch who deals with PSL. I was required to provide the following documentation:

- 2 forms of ID
- 3 most recent bank statements
- detailed letter of how I plan to use the money, including money expected to be earnt during holidays. This is a very important part of the application and should be as clear and detailed as possible.
- Degree transcript
- CV and cover letter
- 3 references
- A brief letter outlining Career progression, i.e. what specialty you would like to pursue along with job descriptions and expected earnings once qualified.
- evidence of course fees provided by course provider.
- letter of acceptance from uni.
- In my case, confirmation letter from SAAS showing that they were paying my fees (thank the Lord!).

Life cover was not compulsory for me, although I think they like you to take it. It works out at around £7.45 per month.

There is the option of taking a secured or unsecured loan, although you have to be a home owner to take the secured loan.

Base rate is 4.5%

There is a set up fee which is calculated as 1% of the total amount borrowed.

Based on the breakdown letter you provide, you can plan the monthly allowance through the full 5 years.

After I had submitted all this and had the three meetings, the lady then looks at the documents and writes a letter to the branch manager saying that in her assessment of me I should either be 1) given the money, or 2) not given the money.

It is then up to the branch manager to look at all provided documents plus the assessment letter and make a final decision.

In all, the process has taken about 6 weeks, with a further few weeks expected to then set up the loan.

Hope this helps,

Feel free to PM if any futher questions

[Bambi]

Who the hell do you need references from and why?

This seems a bit over the top to me! I am going in probably next week to try and sort mine out and I am a bit worried.

How am I meant to know what I will earn in the hols? Haven't even been able to get a job this summer so far!

They know a doctor is going to earn enough to pay off the loan, why do they care what kind of doctor you want to be? Surely they wouldn't understand it all anyway!

How come you didn't have to have life insurance? THe leaflet said it is compulsary!

Why do they want your transcript rather than just your degree certificate?

And why did they want your CV?

Surely all they need to know is that you have a degree and are now doing medicine and what you need the money for?

Also why did it take so long and what happened at each meeting?

Did you go to a branch in Scotland? Everything seems to differ at different branches.

[bigdaikon]

Cheers for the info Big_D, I'll probably be doing that bank job in the not-too-distant future. I expect it'll be more traumatic than actually robbing one!

[Big_D]

Hi Bambi,

I can sympathize with your questions as that was my initial response when asked to provide such extensive documentation.

The answer they gave was two-fold:

First, it is an investment they are making in you for your business in the future and because they will not start recouping the cash until 5.5 years from now. So they are taking a risk.

Secondly, they have had to tighten their proceedures up in light of recent bad judgments on people who have been given money perhaps to freely and have not paid it back, so it is a risk for them.

Regaurding estimated earnings during the summer, all I did was work it out on a worst based scenario basis. I took the total number of hours I could hope to work per week and multiplied it by the number of weeks I expect to work when not at uni. I then multiplied this by the national minimum wage and estimated tax deductions etc. I did this for each year of the course and put it in tabular form.

In terms of career progression, they want to see that you possess a clear perspective and are very focussed about your career. I know what you mean though, medicine kind of speaks for itself but, remember they don't know you and they need to be convinced that you are likely to finish the course and pay back the money.

Life insurance has been recently changed to not compulsory, and yes I went to a branch in Scotland.

References can be from anybody. You need them to say essentially two things: 1) that you are trustworthy etc etc, and 2) that you need all the cash you are requesting. In this instance, it is helpful to get a ref from your GP or similar as they can say 'in my experience, X amount of money seems reasonable to fund this students studies'

I meant degree certificate, apologies.

I was baffled at the CV request as well, but apparantly it's to do with this issue of investment in you.

It took a while because, initially I had a meeting to set up my new account with HSBC, then a proper meeting to discuss the loan with the appropriate person and all the documents required, assess eligibility etc. The final meeting was to discuss amount requested and work out an instalment scheme and tentative repayment plan.

I know the process sounds very invasive, but it's not that bad at all. I think they really just want to be sure that you are a good investment, as bad as that sounds but then again it is financial terminology.

All the best

[DrPie]

I took out a PSL in my 3rd year of medical school (my course is 6 years long).

Initially this was taken out with HSBC- as they were the the bank holding my current account. You will only be allowed to get a PSL if you use them as your main bank (same with any bank offering the PSL).

I picked HSBC as they had the lowest base rate going at the time. I set up a meeting which for a whole morning involved going through a detailed plan of my finances for the next 3 years of my course (which Id compiled in a spreadsheet prior to the meeting). This is, of course very difficult to calculate as a lot of things can change over those 3 years. For example at the time I didnt have a car. The banker goes through all your ingoings and outgoings you have calculated for the next few years and based on that (they plug details in to a computer) they will determine how much they will offer you. This usually works out at exactly the amount you need (if you demonstate in your spreadsheet).
They banker can then show you how much you wil be given (its not given in a lump sum, but rather in installments) and which months (over the next 3 years that this will arrive in your bank account). It will also detail when you will make the payments back- usually a few months AFTER you start your job and overall how much interest you will have incurred.

The banker takes this to the manager and if all approved you sign the 'contract' and the money comes in. At the time (when I signed up) the policy for HSBS PSLs was:
- advised to take out life insurance but they didnt deny you a PSL if you didnt
- the base rate was less than 2 % above base rate (making it about 5.5% APR- as I said the best around at the time)
- i did not have to pay any kind of fee should I have to return to them for more money than what was agreed (whenever you find you need more money you have to set up a new PSL contract each time- you can't go in and say I need an extra £xxx this year- as the banker then needs to change how much you are going to repay etc etc)

So....... 6 months after I took out my PSL I passed my test and got a car (I had been needing one for a while due to all the travelling I was doing between clinical placements).

I return to HSBC to explain the reason that I need to arrange more money and hence set up a new PSL contract. They inform me that since I took it out (6 months ago) their policy has changed.
- Id be charged an admin fee for having to set up a new contract
- they wouldnt offer it me without life insurance
- the base rate had gone up (meaning that it wasnt necessarily the lowest APR anymore)

Of course I was not best pleased. The purpose for me taking out a PSL is because Im strapped for cash- I dont want to have to pay out money in the first instance (which I dont have) in order to get money.

So I decided Id shop around again for another PSL. I went in to a number of 'well-known' high street banks, in which many of the staff didnt know what a PSL was nor realised that they did in fact offer them.
Eventually I ended up at Barclays. This is the bank Id recommend for a PSL
* They dont charge you any admin fee for taking out a PSL or changing one
* Their APR is 2.5% above base rate, working out at about 7.5% but this is on par with most other banks offering PSLs
* You calculate the money you need on an annual basis... not over so many years. This in my opinion is so much easier and less stressful. You often have an idea for example what your rent is going to be per month that year , your bills, whether you'll be travelling a lot and therefore need extra money for petrol etc etc. This changes year in year out.
* Life insurance wasnt even mentioned

The lady that dealt with it was a Student Finance Advisor. I cannot tell you how reassuring it was to have someone who knew what they were talking about and was understanding.

Ive been with them for over 2 years now- and each year I go back and go through the amount of money Ill need for that year (I only recently had to go back to them earlier than expected because I was having money trouble... car kept breaking.... and it was all sorted out in 10 mins... as I went back to the same person and I explained what I needed it for and she simply added it on and drew up a new contract (which was subsequently approved) and in my bank a day later.

So here's my advice:


* shop around (you dont have to stick with the same bank you are with currently if their PSL doesnt suit you). Even if you have loads of Direct debits and standing orders and feel it would be too much hassle- consider it as most banks wiill sort out all your transfers for you

* make sure YOU know what your talking about- as most of the time the staff dont

* if possible get a Student FInance Advisor or equivalent to work through it with you (or someone who has done them before).... they will know what a PSL is and how it all works. You cannot underestimate how reassuring it is to have someone who knows what they're talking about deal with it- a PSL can be a lot of money and you dont want people screwing things up.

* try and go back to the same person each time you need to arrange more loan

*If you think they're getting something wrong (eg a detail about the PSL) then stand your ground (so long as you've done your reading). Make sure you and they are definite/ exact about the details

* try and arrange it a main branch bank- rather than the small ones. e.g their big branches of HSBC/ Barcleys etc and smaller ones. The larger ones are more likely to have bankers that know about PSLs (though this isnt always the case

*read the contracts. Make sure that if you chose to pay the loan off in one lump sum or early (eg you win the lottery) that this doesnt incur you any additional charge (as some banks may charge for this as they're losing a lot of money which they wouldve gained on the interest over x number of years)

* think carefully about how much you need. There are repercussions to taking out a loan. The most obvious is you have to pay it back. Even if you lose your job (its not like the student loan ones which are based on your income). Once the repayments are due to start they'll want their money.

*It will also effect the amount of mortage you can take out in later years. I know this is a long way away for most people to be thinking about but when you start working- and are in to your 2nd or 3rd year of work you might want to consider a mortgage. It is unlikely you will have paid off your bank loan by this stage (plus you'll have money for the student loans company going out to). Any money you owe (eg PSL, Student loan) is taken in to consideration by a bank when they decide how much mortgage to pay you. A PSL of £20, 000 (amounted over 3-4 years of med school) can quite obviously decrease the mortage they'll offer you!!

*Spend some time sitting down and looking at your finances, how much you realistically need and whether you can earn a bit of money through a job before deciding on the amount of PSL you need.

*DOnt use a PSL as an excuse to get loads of money and live a bit more of a cushy life style in your last few years of med school (not many do this but some do)

And above all.... dont stress too much about them. They do need to be considered seriously but once you've sorted one out, doing them again (each year or more often if you run short) becomes easy and not at all stressful.
Remember you are guaranteed a job at the end of med school (despite all the current hoo har) so you will afford the repayments. There will also be a period of about 6- 9 months (9 months as arranged with my bank) where you dont have to start making the repayments. You can if you want. But you dont have to. This gives you a bit of time to either enjoy yourself a bit or save wisely so you can pay off the loan sooner

[Bambi]

I'm really scared now!

I have made up a plan of how much I will need and what for and what other money I have to use and everything but how detailed do they want it? I have just put a certain amount for living costs but not exactly what each penny will be used for. Will that be ok or will they want more detail?

I have just sorted out bloody life insurance! How annoying

I think the references thing is a bit weird, you are hardly going to ask someone that's going to write something bad to do a reference for you are you.

Did they ask about credit cards and stuff? I'm a bit worried because I have money on my card because my dad owes me some.

[Bambi]

Dr Pie how come Barclays let you have one if you already had one from HSBC?

[DrPie]

Just to add- I too was required to show proof of my course. ie that you are a medical student.
These are pretty unique loands (offered only to doctors, dentists and a few select others). There offered to people who are very likely to be able to make the repayments.

Most banks will be relatively keen to provide a PSL. It means that they are pretty much guaranteed your custom for a long time (and as a potential doctor with potential big earnings it means big money for them). And you are likely to take a mortgage with them. Not to mention the interest they make on the PSL itself. There's almost as much in it for them as there is for you.

I wasnt required to present a CV for either my HSBC or Barclays (just the proof of course, and for HSBC my student loan notification letter).
Didnt need references for Barclays (cant remember for HSBC)


Glad to hear that HSBC have scrapped the whole 'compulsory life insurance'. Wonder if my nasty letter to them helped in that matter

[DrPie]

ahhh yes sorry for the confusion. I completely transferred everything from HSBC (the current PSL Id taken with them, everything in my account) etc to a Barclays account. So the money that Id taken out as a PSL from HSBC for the first 6 months was transferred to the amount of PSL I was taking out with Barclays....


Dont stress about it Bambi. THey'll want a rough estimate of your outgoings.
I basically estimated £250 a month for rent, £40 a month for bills, £x amount on food/ having a life, £x per month on books, £x amount on petrol ie. all the things that I could think cost me monthy. THen multiplied by 12
Added on to that was big bills that come out once a year (e.g my insurance, my car tax, my MOT and tuition fees

I then looked at my incomings. I got x amount from my parents a month and x amount from the SLC
I estimated very roughly what I could earn in a summer. Added them all together.

Subtract the two and you have what you need to make up in PSL.

[DrPie]

I no longer bank with HSBC