Education Loan to Study in the UK: Everything You Need to Know

Just getting an admission letter from your dream international university is not enough to set your career in motion. While scholarships can cover 25-50% of the study expense, the remaining expenses need to be dealt with on a cash-in-hand basis. This is where education loans play a significant role in deciding your future. The article informs about education loans for studying in the UK, banks providing loans, interest amounts, documents required, etc.

Education Loan for Studying in UK

These days, many Indians are opting for the United Kingdom as their favourite study destination owing to its education system and the housing of the best faculty in their universities. However, the fee structure along with other expenses such as accommodation, travelling, food, etc make the United Kingdom one of the costliest countries to study abroad. Be it an undergraduate degree or a master’s degree, the applicant needs to showcase a well-structured financing plan while applying to UK universities. A certain amount of liquid assets need to be shown in the financial statement along with loan documents or scholarship letters. It should be enough to cover at least the tuition fees and living expenses for the first year of study in the country. Post that, one can work part-time to cover his/her daily expenses and tuition fees.

To support the dreams of millions of students who want to study in abroad in countries like the UK, many Indian banks and financial institutions help Indian students with their finances. From offering a large amount of financial help to the lowest interest rate and flexible repayment period, many banks and financial institutions compete with each other to provide aspirants with the smoothest experience in achieving their dreams. Apply for an education loan through Shiksha Study Abroad partners.

Also read

• SBI Education Loan for Study Abroad: Ultimate Guide
• How does the proposal of levying tax collected at source (TCS) will affect study abroad aspirants?

Top 10 Universities in the United Kingdom

While an excellent academic record is a must for applying for an education loan, an offer letter from any of the reputed colleges/ universities also aids in quickening the pace of the whole approval process. Here is a list of the top ten universities in the UK which you can aim for, irrespective of course or programmes:

• University of Cambridge
• University of Oxford
• Imperial College London
• University College London
• University of Edinburgh
• University of Manchester
• King’s College London
• London School of Economics and Political Science
• University of Bristol
• University of Warwick

Learn more about the UK:

• Top Universities in the UK 2019
• Top MBA Programs in London

Banks Providing Education Loans to Study in the UK

The main aim of an education loan is to aid deserving students in fulfilling their dream of studying at their chosen university by providing financial assistance. The applicant should start applying for an education loan as soon as he/she receives the unconditional offer letter from their desired university. It is so advised as the bank or the private financial institution’s loan sanctioning is time-consuming owing to various requirements and documentation processes. Also, the loan amount will not be sanctioned by the institutions until and unless you have proof of acceptance from the university (unconditional offer letter) and accordingly meet all the banks' terms and conditions. As each financial entity will have its own terms and conditions, it is in your favour to do thorough research about their requirements, maximum loan amount allowed, interest rate, repayment period and so on.

In case you're finding it difficult to apply for an education loan, you may also apply for loan through Shiksha website.

To help you get started, here are some initiatives by a few banks that are specifically tailored for aspirants looking for financial aid in studying in the UK:

Bank of Baroda (BoB)

The Bank of Baroda offers an education loan initiative called ‘Baroda Scholar Loan’ that assists Indian students with their dream of studying abroad. This initiative is open to students opting for an undergraduate or postgraduate programme, doctoral degree, or any technical job-oriented course in reputed foreign universities. No processing fee will be charged up to Rs 7.50 lakhs. This loan would cover the expenses of tuition fees, hostel fees, travel expenses, and other related expenses. One can repay the loan between 10-15 years. The maximum loan limit is Rs 150 lakhs for full-time courses.

Bank of India (BoI)

‘Star Education Loan’- tailor-made for Indian students, it is one of the famous education loan initiatives by a government bank. Available for students who have obtained admission into a graduate or postgraduate programme in a recognised institute, this scheme specifically aids courses offered by institutes like CIMA-London, UK. Expenses such as hostel fees, tuition fees, exam fees, library fees, laptop/computer, travel, and other education-related expenses are covered under this. If the course demands, this loan can also cover other expenses such as that of a laptop and the like. There is no collateral security upto Rs 7.50 lakhs.

Central Bank of India (CBI)

The Central Bank’s loan scheme of ‘Cent Vidyarthi’ is for all those students who have obtained admission to a higher education programme in a recognised university/college in India or overseas. Their selection should have been merit-based or should have been done through an entrance test. Students whose selection has not been made through these two methods should possess atleast 50% marks in the qualifying examination. Expenses covered include tuition fees, exam fees, library fees, lab fees, travel expenses, and purchase of books, computers, etc. The scheme offers a maximum loan amount of Rs.20 Lakhs.  Also, they may dish out concession programmes on the interest rate for certain cases during the repayment period, providing upto 1% of concession. The additional benefit of this scheme is that it also provides life insurance protection to the borrowers.

HDFC Bank

Famously known as HDFC Credila, in partnership with Credila, HDFC offers upto Rs.20 lakhs in education loans for students wanting to study abroad. With flexible loan terms and low-interest rates, it also provides tax benefits to borrowers under Section 80 (E) of the Income Tax Act.

State Bank of India (SBI)

SBI has two loan schemes for students aspiring to study in the UK, namely, SBI Student Loan and SBI Global ED-VANTAGE. Under the student loan scheme, the bank offers up to Rs.20 Lakhs maximum loan amount while under ED-VANTAGE, you can get financed up to Rs.1.5 Crore.

Syndicate Bank

The SYNDVIDYA Scheme allows student loan from Rs.20 Lakhs to 2 Crores for both degree and diploma courses. The repayment tenure is 15 years and collateral is required for a loan exceeding Rs.7.50 Lakhs.

To give you an idea, here is a list of Government Banks’ details regarding education loans: 

Some private institutions also provide financial aid for abroad studies, such as:

*These details may change from time to time. Please contact the bank authorities directly for the latest updates on their policies.

To know how to choose the right bank to finance an education loan, read this

Documents Required for Education Loan Approval

While each of the banks and financial institutions has its own documentation requirements and procedures, here is a generic list of documents you can keep ready beforehand:

• Duly filled loan application form of the particular bank
• Proof of identity and current address
• Proof of age
• Two passport-sized photographs
• For salaried individuals, proof of income (salary slips or Form 16 etc.)
• Also, the latest salary slip and income tax assessment order for the past two years
• All financial supporting documents
• Borrower's last six months’ bank account statement
• Co- borrower's brief statement of assets and liabilities
• Copies of the foreign exchange permit
• Marksheet from last qualifying examination in India (school or graduate studies)
• Unconditional offer letter/ proof of admission from the university
• List of expected expenses for the specified course
• Copies of Scholarship letter, if granted any

Get in touch with India’s top-rated loan providers and apply for an education loan through Shiksha Study Abroad

For more information on the UK as a study destination, also read:

• Everything You Need to Know About Education Loan
• Things to know before applying for foreign education loan
• Why is UK a popular location for higher studies?
• How to get UK Student Visa in 5 steps
• UK Student Visa: Now you need to show higher finances to cover living costs
• All about Post Study Work Permit in UK