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Education Loans In The UK

The United Kingdom, formed of mainland Great Britain and the northern part of the island of Ireland, is a chosen option for many Indian students to pursue their dream of quality international degrees. The latest data by the Higher Education Statistics Agency (HESA) shows that the total number of international students in the UK is 679,970. The UK education system is the main factor that motivates such a large population to study abroad. The UK offers career-oriented degrees and an excellent placement level after their degrees. The number continues to grow as students look for jobs and a better way of life in the UK. 

Several universities cater to the rising demands of the education requirement. Students who have studied and completed their education in the UK are considered valuable resources worldwide! However, fulfilling this dream comes with one final and tricky question: "How do we finance a dream of studying abroad in the UK?" Several banks, NBFCs, and private banks offer education loan UK to answer this. They end up bridging the gap between financial hardship and quality education in the UK!

Before understanding the entire process in detail of Student Finance UK & everything around it, check out the standard eligibility criteria to acquire student loans for the UK. Note that the criteria below are the standard requirements; with different institutes, the requirements will vary depending on their processes of study loan UK!

• You must be a citizen of India
• You must be over 18, or your parents must apply for the loan on your behalf.
• Must have a confirmed enrollment in a recognised institution in the UK
• A co-applicant is a co-borrower that signs the education loan application and loan agreement with the primary loan applicant. 
• Co-applicants must have stable and secure income sources to get study loan UK for the applicants.

For secured as well as unsecured education loan for UK, students must provide adequate documents to prove themselves. While each bank and financial institution has its own paperwork requirements and procedures, here is a typical list of documents required for private and public bank loans: 

• Education loan form filled with required details
• Identity proof: PAN card, passport
• Residency proof (choose one):
  • Voter ID Card
  • Bank account statement
  • Passport
  • Electricity Bill
  • Aadhar
  • Ration card
  • Telephone bill
• Co-borrower's 6-month bank statement (Salaried: 1 year of salary credits; Self-employed: 1 year business transactions)
• Personal Asset & Liability Statement (self-attested)
• Applicant academic documents:
  • Marksheets and certifications in 10th, 12th, and degree
  • Proof of enrollment
  • Course cost/fee structure
  • IELTS/GMAT/GRE Scorecard
  • University ranking print-out
• Financial Co-applicant Income documents:
  • Salaried: 3-month salary slips, Form 16 of previous two years, employer ID card, ITR of last two years
  • Self-employed: ITR for previous three years, Profit & Loss account, Balance sheet of last three years, business address proof.

Various factors add up to your overall expenditures when living in the UK. International students in the UK can expect to spend between £1,154 and £1,218 per month on living costs. Annually, these costs amount to an average of £13,848 to £14,616, covering accommodation, food and groceries, household bills, transportation, entertainment, and other related expenses. Students can check some of the charges and their approximate costs here in the table below: 

Students must note that the cost of living varies according to their needs. They must consider their circumstances, plan well in advance, and factor in those costs.

The best part of taking a UK education loan for Indian students with UniCreds is that you can get up to 100% financing, implying that the loan will cover all expenses. Thus, the student loans cover the education expenses and ancillary charges. Check them here: 

• Examination, laboratory fees, library
• Fee expected for college and hostel
• Purchase of books, instruments, equipment
• Travel expenses
• Caution deposit, refundable deposit, building fund
• Insurance premium for the student (if applicable)
• Other expenditures like study tours, thesis, project work
• Purchase of laptop (if required for the course)

For UK, two types of loans are primarily available to students. What kind of loan you apply for, however, will depend on the financial institution and your eligibility -

• Secured Education Loans: For UK, a secured student loan requires the applicant to offer security or collateral. Apartments and retail stores are tangible assets, whereas fixed deposits and government bonds are intangible securities.
• Unsecured Education Loans: An education loan for the UK without collateral is unsecured. As the name implies, applying for an unsecured student loan. However, students must note that an unsecured loan's interest rates may be higher due to no collateral. A non-collateral education loan for UK is desired by many. Students can connect with experts with UniCreds to learn the eligibility criteria.

Applying for a UK education loan involves a lot of research and requires steps to be followed. The procedure may initially seem cumbersome, and the student may get overwhelmed when applying. However, UniCreds makes it easier for students with expert counsellors assisting students at every step of the process at no extra cost. There are some tips that students should be aware of when applying for a UK student loan, including selecting a financial institution. 

General Tips: 

• Choosing a bank or NBFC with the best loan terms is more important than choosing one with more finances. It is also essential to verify if the lender allows the option to make the EMI payments in advance or for partial loan costs. 
• Knowing the service charges and prepayment penalties is a must. 
• Total EMI cost paid for a UK study loan depends on how a student chooses to repay the loan. 
• Some students choose to borrow money for a longer period of time since the EMI would be lower. 
• However, the cost of the loan and the interest paid will be significantly greater in this case. Therefore, if the chances of finding a well-paying job following the course are strong, choosing a shorter loan term is better.

Specific Tips

1. Moratorium Periods: Moratorium periods are sabbaticals that typically last the length of the course plus an additional year or six months after finishing the course, whichever comes first. Students are not required to make loan payments during this time, although interest will continue to accrue. 

Students are permitted to pay down the interest during the moratorium period, which will lighten the loan's burden and reduce its cost once they must begin making EMI payments.

2. Pay In Installments: Banks charge interest on the amount of money sent. Typically, a student must pay for the course once per year or once per semester. Therefore, it would be wiser to apply for an abroad education loan when needed. In this manner, substantially less interest will accrue. 

Make sure the money is distributed as and when needed rather than having it sanctioned in one lump sum.

3. Tax Benefits: Under Section 80E of the Income Tax Act, students can get tax benefits on the interest they pay on student loans. To qualify for this deduction, the loan must be obtained from an Indian scheduled bank or a gazetted financial institution. 

Eight years is the maximum time for a tax deduction. Therefore, choosing a longer loan implies that students will only receive the tax deduction for the first eight years.

UniCreds, unlike any other platform, makes securing student loans manageable. Here are some of the reasons we are the best choice:

Every private bank and NBFC has a list of UK universities that are eligible for education loans without collateral. Although the procedure for obtaining a UK study loan without collateral in India for studies abroad is similar, the loan amount offered by various lenders varies based on where students intend to pursue their studies. The list of institutions that have been given the green light for a non-collateral loan.

Various partners provide education loans for the UK with and without collateral. The loan conditions and terms may differ depending on the lender and the type of loan. International lenders offer unsecured loans only.

The UK is a popular study-abroad destination with top-ranked universities offering many courses. Opting for the best courses in the UK can improve your skills and provide access to lucrative job opportunities. To pursue a successful career, it is essential to prioritise acquiring a reputed UK degree. For example, enrolling in a data science course in high demand in the UK can increase your chances of securing a well-paying job. Several other sought-after courses in the UK can propel your career towards the right path.

After getting the student loan to study in UK, the next step is the visa process. The UK is a famous study-abroad destination with top-ranked universities offering many courses. Opting for the best courses in the UK can improve your skills and provide access to lucrative job opportunities.                                                               

If you aim to pursue a successful career, it is essential to know the visa requirements and other eligibility requirements. Let's look at the documents required for a UK student visa. 

• Current passport or valid travel documentation
  • Not a citizen of the country you are applying from
• Evidence of funds to cover living expenses for course duration
  • Under 18 years of age
• Confirmation of Acceptance for Studies (CAS) reference number and related documents
  • Have dependents (family members)
• Passport-sized color photographs
• Tuberculosis screening certificate (mandatory for South Asian countries)
• Assessment documentation
• Academic Technology Approval Scheme (ATAS) clearance certificate (if required)

To apply for a student visa from outside the UK, a fee of £363 is required. Moreover, if you need to extend or change your student visa from inside the UK, you must pay a fee of £490*.