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

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Srishti
Srishti Chatterjee
Study Abroad Expert
Updated on Mar 15, 2021 18:27 IST

Education Loan to Study in the UK

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.

Apply for Education Loan through Shiksha

Shiksha has partnered with India’s topmost and trusted loan providers who will assist you in getting an education loan. Find out more!

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

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:

Learn more about UK:

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.

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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:

Bank name

Contact number

Maximum Loan Amount

Interest Rate

Period of Loan

Loan Eligibility

Allahabad Bank

011 - 23341669/ 23367691/23341152

Rs.50.00 lacs

9.90%(0.50% less for girls)

Course Period + 1 year or 6 months after getting a job, Loan to be repaid within a maximum period of 15 years after commencement of repayment.

Should be Indian National and secured admission in abroad through Entrance Test.

Bank Of Baroda

022-2202 0728, 022-67892816

Rs.60.00 lacs

9.70-11.20%

Course period + 1 year or 6 months after getting a job, whichever is earlier. Repayable in 180 maximum installments for loan amount above Rs 7.50 lakhs

1. Should be an Indian National

2. Secured admission foreign Universities/Institutions.

Bank Of India

1800 11 4545

Rs.20.00 lacs

10.90%

Course period + 1 year or 6 months after getting a job and the loan is to be repaid in 15 years after commencement of repayment.

Citizen of India + good academic record. For studies abroad, should have secured admission to abroad through Entrance Test. The applicant should have secured a minimum of 50% marks in the major subject.

Central Bank of India

011 – 23318964, 23319268

Rs.20.00 lacs

10.40%(0.50% less for girls)

Repayment to commence 12 months after completion of studies or 6 months after securing job whichever is earlier.

Should have a consistently good academic record in previous examinations with marks over 60%.

Punjab National Bank

1800 180 2222

Need-based finance subject to repaying capacity of the parents/students with margin

9.45-11%

Maximum up to 15 years

  1.     Indian nationals.
  2.     Parents/guardian should have a regular source of income to show that they are able to repay the loan.
  3.     Should have secured admission to abroad through Entrance Test.

Punjab & Sind Bank

011-25720849

Rs.20.00 lacs

10.25%

Repayment of the loan will be in equated monthly installments for a maximum period of 15 years for all categories.

  1.     Indian National.
  2.     Should have secured admission to professional/technical courses in abroad through Entrance Test.

State Bank of India

1800 11 4545

Rs.1.5 crore

10.50%(0.50% less for girls)

Repayment of the loan will commence one year after completion of the course or 6 months after securing a job. Maximum repayment period is 15 years

All courses having employment prospects are eligible.

Syndicate Bank

1800 425 66 55

 Rs.2 crore

10.75-11.50%(0.50% less for girls)

Course period + 1 year or 6 months after getting a job. The loan interest amount should be paid back either by the candidate himself or by his guardian.

The Candidate or the candidate's guardian should hold an account in the bank. The candidate should be from the same place as the bank to avail the loan otherwise has to open an account in the bank of his choice and avail loan 6 months hence.

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

Bank Name

Contact number

Maximum Loan Amount

Interest Rate

Period of Loan

Loan Eligibility

Axis Bank

1800 2335577, 23736555

Rs 75.00 lacs

13.50%

­

Indian Nationality & Should have a good academic record.

HDFC

011-41514332

Rs.20.00 lacs

14.00%

Repayment of loan starts 1 year after course completion / 6 months after obtaining employment

An Indian Citizen/Resident who has secured admission in abroad

HSBC

99107 92424 / 2373 8989

Rs.1 Crore

 

Tenor of up to 15 years.

Minimum age-18

ICICI

011-41718000

Rs.20.00 lacs

13.00%

 

Indian Nationality & Should have a good academic record.

*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:

About the Author
Srishti Chatterjee
Study Abroad Expert

Srishti has spent six years in the Education industry helping study abroad aspirants draft their application documents for their dream universities. Experienced in creating impressive SOP, LOR, and Essays, she knows... Read Full Bio

Comments

(30)

Hello excuse me mam
I have agriculture land it's worth upto 1cr
Can I get the education loan for UK

Reply to Gani Mudhiraj

7774326

Srishti ChatterjeeStudy Abroad Expert

25/10/21

You need to ask the bank if they accept agricultural land as the mortgage.

Hi.Could you please advise when the repayment of loan starts ? After completion of the course for which loan was availed ? And will it be paid by the Student after course completion and getting a Job.

Reply to Ashish Agarwal

7774326

Srishti ChatterjeeStudy Abroad Expert

9/9/21

This differs depending on the bank. It is usually after the student completes his studies and starts working. Clarify with the banks on this matter before finalising a loan.

r

ranveer

25/08/21

Hi, I want to know, Can I get a loan for MBBS in Uk? And the amount should be at least above 1 crore.

Reply to ranveer

7774326

Srishti ChatterjeeStudy Abroad Expert

25/08/21

You need to contact the respective banks for this. It depends on the bank what kind of limit they have for education loans.

A

Abhilash

9/08/21

Got unsecured loan of 7.5 lakhs from union bank of india. I
Was told that there is a high chance of visa rejection due to unsecured loan … for Uk ?. Is that really matters?

Reply to Abhilash

7774326

Srishti ChatterjeeStudy Abroad Expert

10/08/21

For evidence of funds for a UK visa, the loan must be in your name and provided by a government (state, regional, or national) entity or through a government-sponsored student loan entity or educational loans scheme. For more details, please check the UK gov website for student visas.

S

Sharad

03/08/21

Hello mam,
I have also taken education loan after giving Fixed deposit as a collateral and loan has been sanctioned for entire course fee. Is this create problem with UK embassy? Some people say UK embassy doesn't accept if a FD receipt used as a security. Please confirm and advice.

Reply to Sharad

7774326

Srishti ChatterjeeStudy Abroad Expert

03/08/21

The UK does not specify this. It only states that a "Letter from a regulated financial institution confirming a loan [that is] provided by your national government, their state or regional government, a government-sponsored student loan company or is part of an academic or educational loans schem...The UK does not specify this. It only states that a "Letter from a regulated financial institution confirming a loan [that is] provided by your national government, their state or regional government, a government-sponsored student loan company or is part of an academic or educational loans scheme". You can refer to the 'Guidance on applications for UK Tier 4 student visas' doc on the UK Govt website.

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