Finding educational loans UK might feel like trying to decode hieroglyphs or run a marathon in flip-flops, but it’s way more doable than you think. With a whopping 446,924 sponsored study visas granted in the year ending March 2024, you’re all set to join a massive wave of ambitious students just like you.
Financing your education doesn’t have to be a nightmare. It’s all about finding the right support. And believe it or not, there are plenty of loan options to ensure money doesn’t stand between you and your dreams.
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This article will break down the essentials so you can focus on more exciting things like cosying up with a textbook in a quaint Cambridge library.
Dive in!
Key Highlights
Here’s a quick overview of the key points discussed in this article about educational loans UK.
| Highlight | Details |
| Types of Educational Loans UK | Secured Unsecured |
| Top Educational Loans in the UK | Baroda Scholar Loan Punjab & Sind Bank Education Loan State Bank of India Educational Loan Scheme |
| Average Loan Amount | INR 1.5Cr (GBP 136K) |
| Average Cost to Study | UG: INR 11L to INR 41.8L (GBP 10K to GBP 38K) |
| PG: INR 7.7L to INR 40L (GBP 7K to GBP 36K) | |
| Diploma: INR 1.4L to 30.8L (GBP 1.3K to 28K) | |
| Top Universities | Imperial College London University of Oxford University of Cambridge |
| Cost of Living | INR 89.4L (GBP 812) |
Types of Educational Loans UK
The UK’s reputation as the fifth cleanest country and its world-class education system makes it a top choice for international students, including thousands from India.
However, while your education may be top-notch, your next worry is paying off the fees. That’s where a student loan for international students UK comes in. There are several options to help you fund your studies and make that dream UK education a reality.
But first, understand the types of loans available to you.
| Type of Student Loan for Foreign Students UK | Details |
| Secured Loan | Requires collateral, like property or fixed deposits. |
| Low-interest rates | |
| Unsecured Loan | An education loan for UK without collateral. |
| High-interest rates |
Top Educational Loans in the UK
With educational loans UK for international students becoming increasingly popular, securing the funds for your dream education is more accessible than ever.
In 2023 alone, a staggering INR 17,668 crore was disbursed in education loans, reflecting the growing demand from students aspiring to study abroad. These loans cover tuition fees, cost of living, travel fare, mandatory health insurance, and study material expenses, ensuring all essential study abroad expenses are included.
Take a look at the top options for a study loan for UK in India.
| Educational Loans UK | Loan Amount in Total | Interest Rate |
| Baroda Scholar Loan | Up to INR 1.5Cr (GBP 136K ) | 9.70% to 11.15% |
| Punjab & Sind Bank Education Loan | Up to INR 20L (GBP 18.1K) | 10.25 % – 13.25% |
| State Bank of India Educational Loan Scheme | Up to INR 1.5Cr (GBP 136K) | 11.15% |
| Syndicate Bank Vidya Abroad Scheme | Up to INR 2Cr (GBP 181K) | 10.55% |
| Punjab National Bank Concessional Loan | Up to INR 50L (GBP 45.3K) | 4% |
| HDFC Bank Education Loan | Up to INR 45L (GBP 40.7K) | 9.55 % to 13.25 % |
| ICICI Bank Education Loan | Up to INR 3Cr (GBP 271.6K) | 9.50% to 11.31 % |
| Axis Bank Education Loan | Minimum INR 50K (GBP 453) | 8% to 16% |
Note: The conversions from INR to GBP are based on current exchange rates and are subject to change.
- Bank Of Baroda
With these educational loans UK, you can enjoy several advantages, including no processing charges for loans up to INR 7.5L (GBP 6.8K) and no documentation fees. If your loan is under INR 4L (GBP 3.6K), there’s no margin required, making it easier for you to manage the financial aspects of your education.
Plus, if you’re attending a premium institution, the 1% processing fee on larger loans is refunded upon your first disbursement.
The repayment tenure for this student loan for international students UK is 15 years.
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Eligibility Criteria
- You must be an Indian national to qualify for the loan.
- Eligible for job-oriented professional/technical courses from reputed universities.
- Graduate courses like MCA, MBA, and MS are covered.
- Regular degree/diploma courses like aeronautical, pilot training and shipping are accepted, provided they are recognised by relevant aviation/shipping authorities in India or abroad.
- Punjab & Sind Bank Education Loan
Punjab & Sind Bank offers student-friendly loans with low interest rates, no hidden fees, and minimal paperwork, making it an attractive option compared to other loans for international students.
You won’t need security for loans up to INR 4L (GBP 3.6K), and female students receive an additional 0.50% concession. Plus, there are no processing fees, making it even more affordable.
The repayment tenure for this student loan for international students UK is 15 years.
Eligibility Criteria
- You can apply for loans for job-oriented professional/technical graduation and post-graduation courses like MCA, MBA, and MS offered by reputed universities.
- Applicable for courses conducted by CIMA (Chartered Institute of Management Accountants), London.
- State Bank of India Educational Loan Scheme
With SBI’s Global Ed-Vantage loan, you can cover all your educational expenses, including tuition, travel, and study materials, for your studies abroad. Enjoy a seamless online application process and early approval before your i20 or Visa.
The repayment tenure is 15 years.
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Eligibility Criteria
- You must be an Indian national.
- Secured admission to a regular Graduate, Post-Graduate, Diploma, Certificate, or Doctorate course at foreign institutes/universities (including the UK)
- Admission should be through a merit-based selection process or entrance test.
- Syndicate Bank Education Loan
With the Syndicate Bank Education Loan, you’ll benefit from no processing fees and coverage for tuition, books, travel, and other educational expenses. Additionally, a moratorium period of the study duration plus 12 months gives you time to focus on your studies before starting repayment.
The repayment tenure for this student loan for international students UK is 15 years.
Eligibility Criteria
- You must be an Indian national.
- Must have secured or are guaranteed admission to a recognised course like MCA, MBA, MS, and others at reputed universities.
- Punjab National Bank Concessional Loan
Punjab National Bank’s Concessional Education Loan Scheme is specially designed for differently abled students.
It covers tuition, study expenses, and even the cost of a 2-wheeler up to INR 50K (GBP 453). This inclusion within the overall loan amount helps manage education and transportation needs.
The repayment tenure for this student loan for international students UK is 10 years.
Eligibility Criteria
Here are the eligibility criteria for this education loan UK for international students.
- You can apply for a loan if you have 40% or more disability.
- Make sure to provide a valid disability certificate.
- Authorised government authorities must issue the certificate.
- It should comply with Central, State, or UT Government statutes or notifications.
- HDFC Bank Education Loan
HDFC Bank provides tailored plans with competitive interest rates and flexible repayment options. It offers 100% financing for foreign education loans, which can cover expenses for over 950 courses in 36 countries.
The repayment tenure is 14 years.
Eligibility Criteria
Here are the eligibility criteria for this education loan.
- The borrower and co-applicant must be Indian citizens, and the co-borrower must have a bank account in India with cheque-writing facilities.
- Collateral may be required in some instances, depending on loan conditions.
- Must have secured or are guaranteed admission to a recognised course like MS or MBA.
- ICICI Bank Education Loan
ICICI Bank provides an Education Loan for students wishing to study abroad. The loan features a moratorium period that covers the course duration plus an additional 12 months. This allows you to concentrate on your studies without immediate repayment pressure.
The repayment tenure is 10 to 12 years for UG and 12 to 14 years for PG.
Eligibility Criteria
Here are the eligibility criteria for this education loan.
- You must be an Indian national between the ages of 16 and 35.
- A proven good academic record is required.
- Applicants must have completed their 10+2 (12th Standard) or a Diploma.
- You should pursue a graduation, postgraduate degree, or PG Diploma in professional education.
- Axis Bank Education Loan
Axis Bank believes in making quality education accessible, offering 100% loan financing. They cover provide quick disbursal of funds within two days. A pre-admission sanction letter is also available to support your admission and visa applications.
The repayment tenure is 15 years.
Eligibility Criteria
Here are the eligibility criteria for this education loan.
- Minimum 50% marks in HSC and graduation.
- Admission to career-focused courses (medicine, engineering, management) at graduate or postgraduate levels.
- Admission in India or abroad through entrance exams or merit-based selection after HSC (10+2).
- The co-applicant (parent, sibling, or guarantor) must provide proof of regular income.
Documents and Process for Educational Loans UK
When applying for educational loans UK, having the right documents and understanding the process is essential for a smooth application experience.
This section will walk you through the key documents required and the step-by-step process to secure your education loan.
Documents Required for Educational Loans UK
Time to gather a mountain of paperwork! But don’t worry, it’s not as scary as it sounds.
Here’s your cheat sheet to breeze through the documents you’ll need for educational loans UK.
- Duly filled out loan application form.
- Mark sheets of SSC, HSC, Degree Courses, and the national level entrance test.
- Course admission proof with fee schedule.
- Scholarship confirmation documents (if applicable).
- Passport-size photographs.
- The bank account statement for the last six months.
- Co-borrowers statement of assets and liabilities.
- Income proof and photo identity proof.
- Address proof and age proof.
- You might also need documents for qualifying exams with minimum scores, as given below.
| Test | Minimum Score |
| TOEFL | 92-100 |
| IELTS | 6.5 |
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Application Process for Educational Loans UK
Applying for educational loans UK is like setting off on a well-planned road trip. Once you’ve mapped out the route and packed all the essentials, it’s a smooth ride.
With a few key steps, you’ll be well on your way to securing the best educational loans in the UK. Read on.
- Research & Compare: Research different banks and compare loan options (interest rates, repayment terms).
- Loan Pre-Approval: Approach the bank and get a pre-approval based on your eligibility and course.
- Submit Application: Fill out the loan application form and submit it with the required documents.
- Bank Review: The bank will review your application, assess the co-borrower’s financial standing, and check the collateral (if applicable).
- Loan Approval: Once approved, the bank will issue a sanction letter for the loan amount.
- Loan Disbursement: After receiving your university’s confirmation, the loan is disbursed directly to the university or your account, as per the agreement.
How to Choose the Best Educational Loans UK?
“An investment in knowledge pays the best interest.” – Benjamin Franklin.
Choosing the right educational loan in the UK is one of the most crucial decisions for your academic journey. With so many options available, finding a loan that fits your financial situation and long-term goals is essential.
Explore how you can make the wisest choice while picking educational loans UK.
- Research Education Loan Options Based on Your Needs
Before applying, it’s essential to research the various loan options available. If you’re looking for an education loan to study in UK without collateral, focus on lenders that provide unsecured loans. These loans typically have different eligibility requirements, but they can be a great option if you don’t have assets to pledge.
- Understand Loan Terms for Masters Programs
If you’re pursuing postgraduate studies, an education loan for a master’s in UK can have different terms than undergraduate loans. Look for lenders that offer competitive interest rates and repayment terms designed explicitly for master’s students, as these programs may be more costly.
- Explore UK Government Loans for International Students
The UK government loans for international students may offer support depending on your residency status. While these loans might be limited in availability, they often come with favourable repayment conditions and lower interest rates.
- Compare Interest Rates and Repayment Terms
One of the most important factors is the loan’s interest rate and repayment structure. Whether you opt for a private lender or a government loan, compare the cost of borrowing over time, ensuring that it aligns with your income expectations after your course.
- Review Application and Processing Time
Loan processing time can be critical, especially when dealing with visa applications. Choose lenders who offer a streamlined application process with a fast turnaround to avoid delays that could affect your enrollment in UK universities.
- Tax Benefit
When selecting a study loan, you should consider the tax benefits of education loans. Under Section 80E of the Income Tax Act in India, you can claim deductions on the interest paid, helping to lower your tax burden. This benefit can be availed for up to 8 years from the start of repayment.
Educational Loans UK: Collateral Requirements
Most study loans, mainly secured ones, require collateral, making it essential to understand these requirements.
Collateral acts as a safety net for lenders, guaranteeing that the loan will be repaid. It’s similar to giving the bank a valuable item, like a family heirloom, as a promise to return the borrowed amount. The bank then holds this asset as security in exchange for the loan amount.
The types of collateral you can pledge include the following.
- Tangible assets include non-agricultural land, homes, apartments, or similar structures.
- Intangible assets, like government bonds, life insurance policies, and fixed deposits.
Indian government banks usually provide secured educational loans UK. The maximum loan amount you can receive through these programs depends on the collateral value you provide.
Top Universities and Cost of Studying in the UK
From ethical hacking to puppetry design and performance, the UK offers unique, creative, and specialised programs.
So, if you’re planning to study here and are exploring educational loans UK, you must first know the top universities and average tuition costs.
Below are some leading universities for international students.
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Here are the average tuition fees based on the type of course.
| Program Name | Average Cost Per Year |
| Undergraduate Degree | INR 11L to INR 41.8L (GBP 10K to GBP 38K) |
| Graduate Degree | INR 7.7L to INR 40L (GBP 7K to GBP 36K) |
| Diploma Courses | INR 1.4L to 30.8L (GBP 1.3K to 28K) |
Cost of Living in the UK
Managing the cost of living in the UK is much like preparing a perfect cup of masala chai. You need the right balance of ingredients to get it just right. Understanding these expenses can be crucial in effectively budgeting and stretching your educational loan.
The average monthly cost of living in the UK is INR 89.4L (GBP 812). However, it all depends on your lifestyle and area of residence.
With that in mind, it’s time to explore other essential expenses you’ll encounter while living in the UK.
| Key Expense | Average Amount |
| Apartment (1 bedroom) in City Centre | INR 1.1L (GBP 1K) per month |
| Mobile Phone Plan with Calls and 10GB+ Data | INR 1.3K (GBP 12.5) per month |
| One-way Ticket (Local Transport) | INR 242 (GBP 2.2) |
| 1 Litre Milk | INR 132 (GBP 1.2) |
| Meal at Inexpensive Restaurant | INR 1.6K (GBP 15) |
Conclusion
With the average annual salary in the UK for full-time employees around INR 38.5L (GBP 35K), you’ll be well on your way to repaying your educational loans UK.
Now, all you need to do is apply, get in, and study hard. Soon enough, you’ll be sipping tea with your loan fully paid off!
Ready to take the next step toward your education in the UK? Leap Scholar is here to guide you every step of the way. Not just with choosing the right university but also with visa assistance, SOP review, and so much more. Connect with us now!
Frequently Asked Questions
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Q. What types of educational loans UK are available for international students?
Ans. There are two main types of educational loans UK: secured and unsecured loans. Secured loans require collateral such as property or fixed deposits, while unsecured loans do not. You can choose the best loan to fund your studies, depending on your financial situation.
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Q. Can I get a student loan for international students UK without collateral?
Ans. Yes, several banks offer an education loan to study in UK without collateral. These loans are unsecured but may come with higher interest rates. It’s essential to compare interest rates and terms before making a decision.
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Q. What is the interest rate for student a loan for foreign students in the UK?
Ans. The interest rates for a loan for foreign students in the UK vary based on the lender and loan type. Generally, unsecured loans have higher interest rates, while secured loans with collateral tend to offer more favorable terms.
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Q. Are there UK government loans for international students?
Ans. Yes, UK government loans for international students are available, but they are generally limited to EU or EEA residents. Non-EU international students typically rely on private education loans from banks or financial institutions.
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Q. What documents do I need to apply for an education loan UK for international students?
Ans. You’ll need to provide your loan application form, academic records, proof of admission, identity documents, and financial information, such as co-borrower details. These requirements are standard for most education loans in the UK.
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Q. How much can I borrow with an education loan for UK without collateral?
Ans. The loan amount for an education loan for UK without collateral depends on the bank but typically ranges between INR 20 lakhs to INR 50 lakhs. Confirm with your lender for the specific limits based on your course and institution.
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Q. Can I get a study loan for UK in India if I pursue a master’s degree?
Ans. Yes, you can apply for a study loan for UK in India, specifically for master’s programs. An education loan for a master’s in UK often comes with different repayment terms and loan amounts compared to undergraduate loans, making it ideal for postgraduate studies.
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Q. Do I need a co-borrower for an education loan UK for international students?
Ans. Yes, most banks require a co-borrower, usually a parent or guardian, for an education loan UK for international students. The co-borrower’s financial background is evaluated to ensure loan repayment capability.
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Q. What does the education loan to study in UK without collateral cover?
Ans. An education loan to study in UK without collateral typically covers tuition fees, living expenses, travel, health insurance, and study materials like books or laptops. Some loans may also cover additional costs like project work and study tours.
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Q. How long is the repayment period for a student loan for foreign students UK?
Ans. The repayment period for a student loan for foreign students UK can be up to 15 years, depending on the bank and loan type. Some lenders offer flexible repayment terms to ease the financial burden post-graduation.
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Q. Are there any tax benefits for taking an education loan for a master’s in UK?
Ans. Yes, under Section 80E of the Income Tax Act in India, you can claim tax benefits on the interest paid for your education loan for a master’s in UK. This can be availed for up to 8 years from the start of repayment, making it easier to manage your loan.
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