Parents pay for school fees with loans

Parents are increasingly turning to loans to pay for their children's private education, but new research reveals they are not looking around for the best rate.

Sainsbury's Bank has revealed that up to 4,420 personal loans worth more than £46 million could be taken out this year to help fund their children's education.

However, the bank warns says 38 per cent of those who took out a loan in the past five years only obtained one quote.

As a result, parents taking loans out for their children's education could be paying over £1.1 million too much in interest repayments, Sainsbury's warns.

Rachel Brereton, loans manager, Sainsbury?s Bank said: "It?s reported that around 620,000 children ? some seven per cent of all school pupils - are now privately educated in schools that can charge fees of more than £20,000 a year.

"Given that the number of fee paying pupils has increased by four percent over the past five years and that fees have risen by 43 per cent over this period, we expect to see more parents taking out loans to help pay for their children?s school fees. Those parents doing this need to make sure that they shop around and find a competitive rate."