Unsecured loans for school fees

A measured take on borrowing for school fees

Rising education costs are prompting more UK households to weigh unsecured personal loans as a way to fund school fees. In early 2025, lenders reported stronger demand and improving approval trends for unsecured borrowing, while defaults on these loans fell sharply. For parents and guardians, that signals a more supportive environment to secure finance quickly when term dates are approaching. Yet the decision to borrow for fees should never be taken lightly. It is about affordability, timing, and understanding what you will pay in real terms over the life of the loan.

Pressure on family budgets is real. Average unsecured borrowing per household has continued to edge up, reflecting broader reliance on credit for big-ticket costs. At the same time, student debt in the UK has climbed above £292 billion, with more than 150,000 borrowers now carrying balances exceeding £100,000. Those figures are not designed to alarm, but they are a reminder to look at education finance as a whole-family commitment. If you have children who will later take on student loans, adding further unsecured borrowing today could stretch future affordability.

Still, there are reasons for cautious optimism. Lenders expect approval rates for unsecured loans to improve further in the coming months, and lower recent default rates suggest tighter risk management and more sustainable underwriting. For school fee planning, that can translate to faster decisions and potentially keener pricing for strong applicants. The key is to match the term of your loan to your fee schedule, keep repayments manageable alongside other commitments, and compare total cost rather than headline rates alone.

Kandoo is a UK-based retail finance broker that lets you compare multiple lenders in one place. That can save time when you need a rapid answer before a term invoice falls due. In this guide, we set out the practical choices, eligibility considerations, and the steps to apply with confidence. We also highlight risks, alternatives, and what to watch before you commit.

Understanding APR is not just about percentages - it is about knowing the total you will pay over time.

Who benefits from this approach

If you are a UK parent or guardian facing private school invoices, music or tuition bursaries that do not fully cover costs, or boarding instalments that do not align with your income cycle, an unsecured loan can bridge the gap. It can also suit carers managing fee arrears where a clear repayment plan is needed.

This route may be less suitable if you are already carrying high-cost credit, expect reduced income, or anticipate your child taking on significant student loans soon. In those cases, you may prefer to restructure costs with the school, adjust timelines, or explore secured borrowing with lower rates but higher risk.

Ways to fund school fees now

1. Unsecured personal loan for full term fees

2. Unsecured top-up loan to smooth cash flow between instalments

3. 0% purchase credit card for short-term fee elements, then repay before interest

4. Overdraft arranged for temporary, small shortfalls

5. Secured loan against property if you need larger sums and longer terms

6. School fee plans through fee-financing providers

7. Family loan or gift with a simple written agreement

What it costs, what it means

Shorter terms usually mean lower total interest but higher monthly payments. Longer terms ease cash flow but raise the overall cost. Always compare the total amount payable, not just the APR.

Who is likely to be eligible

Eligibility depends on your income stability, credit history, and current borrowing. Lenders will review your employment status, residency, and whether you are on the electoral roll. They will also check credit markers such as payment history and utilisation on cards and overdrafts. With recent lender data showing a marked drop in unsecured defaults and expectations for higher approval proportions, strong applicants may find decisions quicker and more consistent. That said, rising household unsecured balances mean some families could face tighter affordability checks.

If you apply via Kandoo, we source offers from a panel of UK lenders without charging you a broker fee. You submit a single application, and we match you to potential options based on profile and need. Each lender sets its own criteria, which can differ for employed and self-employed applicants, and for homeowners versus renters. Schools rarely influence lender decisions directly, but a clear fee schedule and proof of income strengthen your case. If your child is moving toward higher education, consider the broader picture of student finance and how it interacts with your household budget before taking on new commitments.

From application to decision

1. Check your credit report and tidy obvious errors

2. Map fees by term and choose a realistic loan term

3. Use a repayments calculator to model affordability

4. Apply through Kandoo to compare lender options

5. Upload documents - ID, income, and recent statements

6. Review your personalised rate and total cost

7. Accept the offer and set up a direct debit

8. Receive funds and pay the school on time

Upsides and trade-offs

What to check before committing

Before you sign, assess the total amount payable, not just the monthly figure. Compare the loan term with the remaining years you expect to pay fees, and consider how that overlaps with future education stages when student loans may begin. With UK student debt now at record levels and the number of very high-balance borrowers rising, it is wise to avoid stacking multiple education-related debts across the family. Check that the interest rate is fixed, confirm whether overpayments are allowed without penalty, and build a small buffer for unexpected costs. If cash flow is tight, speak to the school about phased plans or bursary options in tandem with borrowing, rather than relying on credit alone.

Alternative routes to consider

1. Negotiate termly or monthly plans directly with the school bursar

2. Seek bursaries, scholarships, or hardship support

3. Use a fee-finance plan from a specialist provider

4. Remortgage or take a further advance if rates and timing suit

5. Use savings or Premium Bonds for short-term coverage, then replenish

6. Family support via a loan agreement or gift

Frequently asked questions

How much can I borrow for school fees?

Most unsecured personal loans range from £1,000 to £50,000, subject to affordability and credit checks. Larger needs may push you toward secured borrowing or staged funding.

Are rates better in 2025?

Lender surveys point to stronger approval trends and lower recent defaults on unsecured loans, which supports confidence. Your rate still depends on your credit profile, income, and term.

Should I spread fees over a long term?

Only if it remains affordable. Longer terms lower monthly payments but increase total interest. Align the term with the period you will be paying fees.

Will this affect my child’s future student finance?

Your loan does not change their eligibility, but it affects your household budget. With student debt at record levels, avoid layering debts that compromise future affordability.

Can I repay early without penalties?

Many lenders allow fee-free overpayments, but some charge early settlement fees. Check your agreement and compare the total cost if you intend to repay sooner.

How fast can I get a decision?

With a complete application and documents, some lenders decide the same day. Using Kandoo can speed comparisons across a panel of UK lenders.

Ready to explore your options

If unsecured borrowing feels right for your circumstances, Kandoo can help you compare personalised offers from UK lenders and understand the total cost before you commit. Apply online, review your options clearly, and fund term fees with confidence.

Important information

This guide is for information only and is not advice. Eligibility, rates, and terms depend on your circumstances and may change. Borrow responsibly. Missing repayments can harm your credit rating. If in doubt, seek independent financial advice.