Bank of Ireland has decided to stop providing specialist loans of up to €60,000 to graduate entry medical students from July, citing falling demand and the fact that deferred repayments on the product results in accumulated debt by the end of the term.
“While existing customers are not impacted, the Graduate Entry Medical loan will no longer be available for new applications after July 31st this year,” a spokesman for the bank said. “The loan required a parental guarantee which was not an option for all students and the deferral of repayments meant accumulated debt by the end of the term.”
He added that the product “has accounted for a very small volume of our overall lending and the number of applications has dropped in recent years, while our other loans became more popular”.
Sources said that about 50 students applied for this loan last year. They added that the last Irish bank to offer this type of facility had faced criticism in the past when graduates found themselves having to repay principal and rolled-up interest as they began working.
Guarantors
The loans also required a lot of administration work, particularly around the creditworthiness of guarantors, they said.
Still, news that the product, which allowed graduate-entry medial students borrow up to €15,000 each year over a four-year period of study, at a 6.5 per cent annual percentage rate of interest, is being dropped has been met by disappointment in some quarters.
An open letter from a group of graduate-entry medicine students, copied to a number of Government Ministers on Twitter this week, said that without this product “only those from a certain background and financial means will be able to consider this route to become a doctor in Ireland”.
Bank of Ireland’s other deferred-payments product, offering maximum loans of up to €14,000 to undergraduate medical science students, which also requires a guarantor, will also be closed to new applications from the end of July.
“We have a number of other loans for undergraduates, postgraduates and graduates. These include our student loan to fund back-to-college expenses, travel or living expenses, and our postgraduate loan,” said a spokesman for the bank.
“We also offer extremely competitive rates via a personal loan up to €65,000.” Interest rates on personal loans range between 6.8 per cent and 8.5 per cent, according to the bank’s website.
