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Student Loan for UK: Document Required, Types & Eligibility

This blog is written to give you full details and helpful knowledge about Study loan UK. You can turn your dreams into reality by getting a loan after reading this blog.

Why Need a Student Loan for UK?

Did you know?
In 2023, students graduating from English universities will have incurred an average of 44,940 British pounds of student loan debt, compared with 35,780 pounds in Wales, 24,500 pounds in Northern Ireland, and around 15,430 pounds in Scotland.

If you have decided to study in UK, you should be aware that it is one of the most expensive countries to study abroad. Tuition fees at colleges, as well as the cost of living, which includes accommodation, transportation, food, medical expenditures, and other expenses, are all included in the overall cost. If you do not plan your spending, you may feel financially constrained.

Top Reasons to Opt for Education Loan to Study in UK

Here is a list of some reasons why one should opt for a Student Loan in UK:

1. Educational loans typically offer lower interest rates compared to other loan options like home loans, car loans, and personal loans. This makes them a more affordable way to finance your education.

An additional benefit?

Government banks in India often provide a further interest rate reduction of 0.5% for female borrowers. This can lead to even greater savings on your educational journey.

2. A UK student loan covers a wide range of expenses related to your studies, including tuition fees, accommodation, transportation, university charges, living expenses, and essential study equipment.

3. Many parents in the UK liquidate their money to pay for their kids' education, which undermines their long-term goals. Here, student loans can be helpful. Banks hold your bank savings, insurance, and bonds. They utilize them to provide you with a loan for your child's education, allowing you to avoid draining your funds.

Thus, an education loan is the ideal choice for covering all of your fees securely and timely while still meeting admission and visa criteria.

What Are The Documents Required To Apply For An Education Loan To Study In UK?

A Brief of Documents Required for an Education Loan| Gradding.com

If you want to apply for a study loan for overseas students in the United Kingdom, you will need the following documents:

  • Admission Letter
  • Loan Application Form
  • Academic Records (Transcripts, Certificates, Test Scores)
  • Passport-size Photos
  • Proof of Identity (Passport, Aadhar card, or other IDs)
  • Proof of Residence (Utility Bills, Rental Agreements)
  • Income Proof (Bank Statements, Tax Returns, Salary Slips)
  • Collateral Documents (Property Papers if applicable)
  • Visa Documents (Student Visa Copy)
  • Co-borrowers Documents (Identification, Income, Collateral if applicable)
  • Statement of Cost

These are some of the documents required for a UK education loan. In the next section, let's understand how many types of Loans are available to study in the UK.

Types of Education Loans for UK

There are two types of study loans available to UK overseas students in India: collateral education loans and non-collateral education loans.

Education Loan for UK| Gradding.com

Let us know more about these two types of student loans in UK:

1.  Collateral Study Loan:
A collateral education loan, also known as a secured loan, requires security or collateral in order to be granted. The security might be significant or immaterial, such as real estate or fixed assets like fixed deposits.
You can get funding of up to 1.5 crores at an interest rate of 10.25% for your academic expenses by opting for secured loans, which are generally provided by public banks; you do not have to pay any interest during the moratorium period.

Basis Details
Loan Amount Upto 1.5 Cr
Expenses Covered Tuition fees, Transportation, Accommodation, Cost of living,
Cost of books, Uniforms, Library fees, etc.
Interest Rate 10.25%
Eligible courses Master’s, MBA, PG Diploma, Ph.D., Professional/ vocational courses, UG
Moratorium Period The total duration of the course + 6 months
Repayment Duration Upto 15 years
Eligibility Criteria Applicant must be 18 years of age and citizen of India
Must receive admission by qualifying entrance exam
Types of Collateral Fixed Property: House, Land, Flat
Liquid Security: FDs, LIC, Government Bonds

2. Non-collateral Study Loan:
A non-collateral study loan in the UK, often known as an unsecured loan, implies that you do not have to put up any collateral when applying for the loan. This sort of study loan without collateral is more common among students looking for a student loan in the UK.
You can get up to 45 lacs for higher education in the UK, with a 15-year payback term. During the moratorium period, unsecured loans, which private banks or NBFCs often give, must be paid in full or partially.
Thinking about how to get an Educational loan without collateral? Here are all the details of a loan without collateral.

Basis Details
Loan Amount Upto 1 Cr
Expenses Covered Tuition fees, Transportation, Accommodation, Cost of living, Cost of books, Uniforms, Library fees, etc
Interest Rate 11.5%
Eligible courses Master’s, MBA, PG Diploma, Ph.D., Professional/ vocational courses, UG
Moratorium Period The total duration of the course + 1 year
Repayment Duration Within 15 years
Eligibility Criteria Applicant must be 18 years of age and citizen of India
Must receive admission by qualifying entrance exam

DO YOU WANT TO KNOW MORE ABOUT EDUCATION LOAN FOR UK?

Wondering how to get an international student loan in the UK? Connect with Gradding Counsellors and access personalized loan assistance. Talk to an Expert NOW!

List of Banks Offering Education Loan for Studies in the UK

Living costs in the UK are quite high. Candidates also need to obtain a letter of recommendation from the UK before studying there. There are numerous education loan providers for studying in the UK. Several of these are listed below:

Bank Name Maximum Amount of Loan (INR)/ Interest Rate
Bank of Baroda 15000000
8.50 - 9.15%
Central Bank of India 2000000
8.65 - 10.60%
State Bank of India 15000000
10.50%
Bank of India 4000000
8.95 - 9.75%
Allahabad Bank 5000000
7.15 - 10.05%
HDFC Bank 3000000
14%
Punjab National Bank On the basis of the need
8.90%
Axis Bank 7500000
13.70 - 15.20%
ICICI Bank 10000000
10.50 - 13%

Eligibility Criteria to Get Study Loan for UK

Before you apply, be sure you meet the criteria to qualify for an education loan. Different banks have different policies and qualifying requirements. The common qualifying requirements adopted by all banks are:

  1. The applicant should have an excellent academic record.
  2. The student should have a CAS (Confirmation of Acceptance for Studies) from the university in the UK.
  3. The candidate must be enrolled in a career-related course of study.
  4. To apply for a loan, the student must have Tier-4 visa approval or a higher Tier-2 visa.
  5. The applicant must be at least 18 years old; otherwise, his or her parents will have to apply for the loan.

What are the Expenses covered under an Education Loan for the UK?

Apart from the fees, an applicant also requires a valid UK student visa in order to study in the UK. The various expenditures that are covered under a study loan for the UK are as follows:
Fees owed to the institution

  • Examination, library membership, and laboratory fees
  • Expenses for books and supplies required to complete the course
  • Studying abroad necessitates travel fees.
  • A two-wheeler can cost as much as 50,000 INR.
  • Expenses for a study vacation or course-related project work

With this knowledge, let's look at UK students' education loan repayment procedure.

Repayment of Student Education Loan in the UK

Before proceeding with your UK student loan application, it's essential to understand the repayment conditions. Here, we have outlined the repayment schedule tailored for international students from Indian banks.

  1. Public Bank Loan: Repayment of a public bank loan will begin after completing one year of your degree. The loan can be repaid in fifteen years from the start of repayment.
  2. Private bank loan: Repayment will begin and continue for one year or six months after finding a job. You can repay the loan in 15 years.

Tips to Choose the Best Lender to Get an Education Loan for the UK?

Applying for an education loan in the UK requires a lot of research and a series of steps. The method may appear difficult initially, and the student may become overwhelmed when applying. On the other hand, Gradding makes things easy for students by providing experienced counsellors to assist them at every stage of the process with no additional cost. Students should be aware of the following tips before applying for a UK student loan:

1) Find the Right Financial Institution
Choosing a bank or NBFC that offers the finest loan terms is more significant than providing more funds. It is also vital to confirm if the lender allows you to make EMI payments in advance or allows you to pay off the loan in installments. Knowing the service costs and prepayment penalties is essential.

2) Cost of EMI
The EMI paid for an education loan in the UK is determined by how the student decides to repay the loan. Some students opt to borrow money for a longer period of time since the EMI is lower. However, the loan's cost and interest would be higher in this instance. As a result, if the prospects of landing a well-paying job after the course are high, a shorter loan duration is preferable.

3) Evaluate Interest rate
It is vital to understand the difference between fixed and variable interest rates when taking out a loan. When you have a fixed interest rate, your monthly payments are predictable since they remain the same throughout the loan. However, variable interest rates fluctuate with the market, and the amount you must return each month may increase or decrease over time. When picking a student loan, it is critical to examine the interest rates given by various lenders. You can choose the type of interest rate that best fits your financial goals and risk tolerance, considering the potential implications on your overall loan payments.

Conclusion!
Studying in one of the top study-abroad countries, such as the United Kingdom, is costly. A student loan for UK is a wise solution for managing your costs rather than delaying your studies in the UK. The guide above must have given you insights into the eligibility, requirements, and procedures for obtaining a student loan in the UK. There are various options to fund your education in the United Kingdom. Ensure that all your costs are carefully planned so the loan does not strain you. If you are still confused and need expert guidance, you can connect with our experts. They can help you in every aspect of studying in the UK.

Frequently Asked Questions

Can Indian students get student loans in UK?

Yes! Indian students can get loans from several banks and other financial institutions like NBFCs. Students can get both secured and unsecured loans. To decide which loan to take, consider the expenses it covers, the interest rate, and the moratorium period.

How to Get an Education Loan as an Indian Student to Study in UK?

Follow the 4C steps below to know how to get an education loan in the UK:
1. Choose the course and college.
2. Calculate the amount you would need.
3. Compare various loan options available.
4. Check your chosen lender's policies and requirements.
5. Fill out the loan application with the documents they asked for.

Which bank is best for education loans for UK banks without collaterals?

Many banks provide study loans to international students in the UK. Some of them without collaterals are:
1. HDFC Bank
2. ICICI Bank
3. Avanse
4. Auxilo
5. IDFC
6. Incred
7. Axis Bank

What percentage of UK students take a loan?

Taking a student loan is one of the most common ways to support education. 95% of all eligible students go for a loan. The current maximum interest rate for these are 7.5%

Is it easy to get an education loan in the UK?

As a UG or a PG student, you must show some liquid assets in your scholarship letters and financial statements. However, it can become easy with the guidance of a study abroad expert.

Maximum amount that I can get from loan with collateral for UK

The SBI offers loan amounts of up to 1.5 crores at an interest rate of 10.55%.

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