Education Loan for Studying in UK for International Students: Complete Details!

Studying in the UK is one of the most rewarding academic choices for international students, offering globally recognised degrees, world-class universities, and wide career opportunities. However, the cost of studying in the UK can be significant. This is where an education loan for studying in UK becomes a valuable financial support system.

This guide covers everything—loan types, eligibility, documents, process, top lenders, cost of study, living expenses, and FAQs—to help you make an informed decision.

Types of Educational Loans UK

International students can apply for two major types of education loans for studying in the UK:

1. Secured Education Loans (With Collateral)

These loans require you to pledge collateral such as:

• Residential/commercial property

• Fixed deposits

• LIC policies

• Agricultural land (in some cases)

Benefits:

• Lower interest rates

• Higher approval chances

• Longer repayment period

• Higher loan amount (up to ₹1.5 crore)

2. Unsecured Education Loans (Without Collateral)

These loans do not require any collateral but require a financially strong co-applicant.

Benefits:

• Faster approval

• No property needed

• Ideal for students without assets

Limitations:

• Higher interest rates

• Lower loan limit (₹20–50 lakhs)

Top Educational Loans in the UK

Multiple financial institutions in India offer an education loan for the UK. Some popular options include:

1. Public Sector Banks

• State Bank of India (SBI – Global Ed-Vantage Loan)

• Bank of Baroda (Baroda Scholar Loan)

• Punjab National Bank

• Canara Bank

Loan Amount: Up to ₹1.5 crore

Interest Rate: 9.5% – 12%

2. Private Sector Banks

• ICICI Bank

• Axis Bank

• HDFC Bank

Loan Amount: ₹20 lakhs to ₹60 lakhs (unsecured)

Interest Rate: 10% – 14%

3. NBFCs (Non-Banking Financial Companies)

• HDFC Credila

• Avanse Financial

• InCred

Loan Amount: Up to ₹80 lakhs

Interest Rate: 11% – 15%

4. International Loan Providers (Without Collateral)

• Prodigy Finance

• MPower Finance

These lenders do not require co-applicants or collateral, making them suitable for students applying to top UK universities.

Documents and Process for Educational Loans UK

The documentation requirements for an education loan UK for international students are quite standard. Here’s what you need:

Required Documents

Student Documents

• Passport

• Admission letter from UK university

• Academic records (10th, 12th, Bachelor's)

• Entrance test scores (IELTS, PTE, GRE, GMAT – if applicable)

Co-Borrower Documents

• KYC (Aadhaar, PAN)

• Income proof (ITR, salary slips, Form 16)

• Bank statements (6–12 months)

Collateral Documents (for secured loans)

• Property papers

• Legal & valuation reports

UK Loan Application Process (Step-by-Step)

1. Choose the Lender
   Compare interest rates, repayment terms, and loan amount.

2. Submit Application Form
   Fill online or offline forms with accurate details.

3. Upload or Submit Documents
   Provide academic, financial, and identity documents.

4. Loan Sanction & Verification
   Bank evaluates eligibility and collateral (if applicable).

5. Loan Approval Letter
   A sanction letter is issued—required for the UK CAS letter and visa.

6. Disbursement
   Tuition fee is transferred directly to the university; living expenses are credited to the student’s account.

How to Choose the Best Educational Loans UK?

While selecting a student loan for the UK, consider:

• Interest Rate: Lower rates reduce total repayment.

• Loan Amount Sanctioned: Should cover tuition + living cost.

• Processing Time: NBFCs offer faster approvals.

• Prepayment Charges: Prefer lenders with zero or low charges.

• Moratorium Period: Time allowed before repayment.

• Co-borrower Requirement: Some lenders do not need one.

Educational Loans UK: Collateral Requirements

Collateral Required (Secured Loan)

• Residential property

• Commercial property

• Fixed deposits

• Government bonds

No Collateral Required (Unsecured Loan)

But you must have a financially strong co-applicant (parents, siblings, spouse).

Most lenders offer:

• ₹20–₹50 lakhs unsecured loan

• Up to ₹1.5 crore secured loan

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.

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.

Average Monthly Cost of Living

Note: The costs mentioned in the tale are approximate and may vary depending on the location and currency exchange rates.

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Frequently Asked Questions

Q. What types of educational loans UK are available for international students?

Ans. Two major types: secured (with collateral) and unsecured (without collateral). You can choose based on your financial situation and loan amount required.

Q. Can I get a student loan for international students UK without collateral?

Ans. Yes. Several banks and NBFCs offer unsecured education loans, though interest rates may be higher.

Q. What is the interest rate for a loan for foreign students in the UK?

Ans. Interest rates range between 9.5% and 15%, depending on the lender, loan type, and student profile.

Q. Are there UK government loans for international students?

Ans. UK government loans are mostly for EU/EEA students. Non-EU students must rely on private lenders.

Q. What documents do I need to apply for an education loan UK for international students?

Ans. You need identity proofs, admission letter, academic records, co-borrower income proof, and bank statements.

Q. How much can I borrow without collateral?

Ans. Unsecured loan amounts typically range from ₹20 lakhs to ₹50 lakhs.

Q. Can I get a study loan for UK in India for a master’s degree?

Ans. Yes, master’s applicants are highly eligible for UK study loans with flexible repayment options.

Q. Do I need a co-borrower?

Ans. Yes. Most lenders require a co-applicant such as parents or guardians.

Q. What does an unsecured education loan cover?

Ans. Tuition fees, living costs, visa fees, travel, insurance, books, and sometimes laptop and project expenses.

Q. What is the repayment period for a student loan for foreign students UK?

Ans. Up to 15 years, depending on the bank and loan type.

Q. Are there tax benefits for a master’s education loan for the UK?

Ans. Yes. Under Section 80E, the interest paid on an education loan is tax-deductible for up to 8 years.