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

Just getting a admit letter from your dream international university is not enough to set your career in motion. Even before the tedious application procedure of submitting documents, tests scores, and the anxious wait to get an acceptance, comes the real deal of arranging funds. One can be a brilliant student and be eligible for scholarships or grants, yet studying abroad can cut a big hole in one’s pocket. 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.

Studying in the UK with an education loan

These days, many Indians are opting for the United Kingdom as their favourite study destination owing to its education system and 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 expense 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 ten 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 aid 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 Oxford
• University of Cambridge
• Imperial College London
• University College London
• London School of Economics and Political Science
• University of Edinburgh
• King’s College London
• University of Manchester
• University of Bristol
• University of Warwick

Learn more about UK:

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

Initiatives by banks for education loan to study in the UK

The main aim of an education loan is to aid deserving students in fulfilling their dream of studying in 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 taking owing to various requirements and documentation process. Also, the loan amount will not be sanctioned by the institutions until and unless you have a proof of acceptance from the university (unconditional offer letter) and accordingly meet all the banks' terms and conditions. As each of the financial entity will have their own terms and conditions, it is in your favour to do a thorough research about their requirements, maximum loan amount allowed, interest rate, repayment period and so on.

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 for 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. The bank allows a maximum loan amount of Rs.60 lakhs if the university falls under List-A of their scheme and Rs.40 Lakhs if the university falls under List-B. Collateral security is required for a loan amount of Rs.7.50 Lakhs or above.

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 opting for undergraduate and master’s degree, this scheme specifically aids courses offered by institutes like CIMA-London, UK. The maximum loan amount it offers in upto Rs.20 Lakhs with upto 15% loan margin.

Central Bank of India (CBI)

The Central Bank’s loan scheme of ‘Cent Vidyarthi’ offers a maximum loan amount of Rs.20 Lakhs. This term loan’s interest MCLR+2% for boys (marginal cost of funds based lending rate) and MCLR+1.5% for girls. 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 education loan for students wanting to study abroad. With flexible loan terms and low-interest rates, it also provides tax benefits to the 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 upto Rs.20 Lakhs maximum loan amount while under ED-VANTAGE, you can get financed upto Rs.1 Crore.

Syndicate Bank

The SYNDVIDYA Scheme allows student loan upto Rs.20 Lakhs 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 loan:

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

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

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

Checklist of documents required for loan approval

While all each of the banks and financial institutions has their own documentation requirements and procedure, here is a generic of a list of documents you can keep ready before-hand:

• 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, latest salary slip and income tax assessment order of 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