Student Education Loan Options to Study in UK - With & Without Collateral

    Updated on: 17 Aug 2022

     


    The United Kingdom has long been one of the most sought-after study abroad destinations for Indian students. However, the trend had taken a slight downturn in the last decade. But, things are looking brighter again, and even amidst the uncertainties associated with Brexit, the number of Indian students going to The United Kingdom for higher studies has seen a slight increase. 14,074  Indian students went to the U.K. in the year ending September 2017, as against 18,735 Indian students who went in the year ending September 2018, which is a 33% increase in the numbers. With the re-introduction of the Graduate Immigration Route, the UK has become a new favorite among the study abroad aspirants in India.  If you are also aspiring to study in the UK and looking for an education loan to fund your studies, you can check your loan eligibility to gauge if you are eligible for an abroad education loan.

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    How Much Does Education in the U.K. Cost?

    Finances play a major role in a student’s decision to go abroad for higher studies and the same is true for students headed to the U.K. too. Universities in the U.K. are known for having some of the most expensive programs of study. Let us take a look at the approximate cost of some popular programs at the undergraduate and postgraduate level in the U.K. Universities.

    Like every country, the cost of education depends on the University you are studying at, the program you study, the level of education, and the nationality of the student. 
    The University of Oxford charges an annual tuition fee of £36,065 for an undergraduate program (of 4 years) in Engineering Science and £59,490 for a one-year MBA program. International students studying M.Sc in Computer Science at the university have to pay £26,405 a year. 

    University of Cambridge has an annual tuition fee of £32,214 for an undergraduate program in Chemical Engineering, Computer Science Engineering, Management Studies, and an annual tuition fee of £45,660 for MPhil in Engineering. Students who wish to study an MBA at the University of Cambridge have to pay £57,000. International students who wish to study the four-year undergraduate engineering program in Software Engineering have to pay £31,750 per year and £33,250 annually for a two-year Master’s program in Computing. A full-time MBA costs £53,500 to international students and a one year MS in Business Analytics has a tuition fee of £29,500. 

    We can see that the cost of education in the U.K. is quite high and a substantial number of Indian students shelf their plans for studying in the U.K. because of this. If you are one such Indian student, then we recommend looking at numerous options of education loans for the U.K. to Indian students. 

    Why Take A Study Loan For The U.K.? 

    As is evident from the above numbers, the cost of studying in the U.K. is quite steep, and students and parents have to dip into their savings to fund it. At such a stage, taking an education loan will help reduce the financial burden on the students and let them chase their dream of studying in the U.K. In this blog, we will take a look at the different education loan options that Indian students may avail when planning to study in the U.K. We have clubbed the education loans under different levels and programs of study for better understanding. So, without further ado, let us begin. 

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    Education Loan Options for Students to Study in the UK 

    Students applying for an educational loan for studying an undergraduate program in the U.K. have the option of availing two types of loans - secured loan or loan with security and unsecured loan or study loan for the U.K.  without security or collateral.

    A secured education loan is a loan wherein the applicant has to attach collateral while applying for the loan. The collateral can be any tangible or intangible assets, such as immovable property, FDs etc. An unsecured loan, on the other hand, is an education loan in which the applicant does not have to attach any collateral while applying for the loan. 

    What are the Different Options of Education Loan for the UK?

    Educational Loan Options - Without Collateral 

    Features

    Public Banks

    Private Banks

    NBFCs

    Example Lenders

    SBI, BOB

    Axis Bank, ICICI

      Avanse, Incred, HDFC Credila  

    Loan Amount (INR)

      Do not offer unsecured loans more than INR 7.5L for the UK     Do not offer unsecured loans more than INR 7.5L for the UK  

    Upto INR 25 lacs

    Interest Rate Range

    NA

    NA

    13.5%-16%

    Processing Fees (INR)

    NA

    NA

      1.5-2% of Loan Amount  

      Payment During Study Period  

    NA

    NA

    Full EMI Repayment

     

    Get Education Loan Without Collateral Apply here

    Education Loan Options to Study in UK - With Collateral 

    Features

    Public Banks

    Private Banks

    NBFCs

    Example Lenders

    SBI, BOB

    Axis Bank, ICICI

    Avanse, Incred, HDFC Credila

    Loan Amount (INR)

      Upto 1.5 Crores, depending upon the collateral value     Upto 50 lakhs depending upon collateral value and co-applicants income  

    Upto INR 50 lacs

    Interest Rate Range

    8.85% - 9.75%

    11% -12%

    12.5%-15%

    Processing Fees (INR)

    10,000/- + GST + Property Evaluation charges

    Upto 20 lakhs : Rs. 15000/- (refundable)
    More than 20 lakhs : Rs. 750/- on every lakh above 20 lakhs +  + Property Evaluation charges

      1-2% of the loan amount  + Property Evaluation charges 

      Payment During Study Period  

    No Repayment

    Simple Interest Repayment

    Simple Interest Repayment

     

    Get Education Loan With Collateral Apply here

    Education Loan to Study in UK - Without Collateral and Co-applicant

    For those who don’t have any collateral or co-applicant, there is an option to take an education loan from Prodigy Finance. It is an international lender based out of the UK that offers loans at modest rates. UK Loans are given in Euro. They offer loans for a few colleges mentioned in their list. For detailed information, visit Prodigy Finance Education Loans.
    Features like repayment period, processing time, expenses covered, etc. vary from lender to lender. Let us take a look at some of these:

    • Repayment Period: Private banks have a repayment period of up to 20 years while public banks give ten to fifteen years to repay the loan. Students who wish to extend their repayment period can get in touch with GyanDhan. We coordinate with the lender and try to get an extension for our students. 
    • Processing Time: The processing time of NBFCs is the shortest. They take 4-5 days for processing an unsecured loan up to INR 25L and 9-10 days to process a secured loan up to INR 50L. It should also be remembered that a secured loan takes more time for processing as the lender needs more time to verify the documents related to the collateral. Hence, public banks and Axis Bank, which do not offer unsecured loans more than INR 7.5L, take much longer than NBFCs to process loans (at least 12 days). 
    • Expenses Covered: NBFCs cover 100% of the study expenses, while PSBs cover 90% and private banks cover 85% of the study-related expenses. 
    • Co-applicant’s Income Required: For loan without collateral, NBFCs consider the co-applicant’s income even if it is less than 20K for loans without collateral. However, for US loans amounting to INR 20L, the co-applicant income should be around INR 60K per month. If students are taking a loan with collateral, this income is not mandatory by any lender. It should also be remembered that the income requirement may vary from case to case. 
    • Common Decline Reason: The onus of sanctioning a loan lies on the lender and the application can get rejected too. Some common reasons for the decline of an education loan without collateral are low CIBIL score of the applicant and insufficient income of the co-applicant. An application for a secured loan gets rejected because of incomplete documents related to the collateral or poor CIBIL score. Students who are worried about their loan application getting rejected can take the help of GyanDhan and increase their loan acceptance chance by 50%. This is because we assign a dedicated loan counsellor who guides the students at every stage of the loan application process. 

    What is the UK’s Graduate Immigration Route (GIR)?

    On 11 September 2019, the UK government announced the Graduate Immigration Route (GIR), which will enable students to stay up to 2 years in the UK post their graduation to work or look for work at any skill level. This will come into action in the Summer of 2021. So students who graduate in the Summer 2021 or after will be able to benefit from this. This also applies to students who have already started their courses. The route, however, does not count towards permanent settlement. The graduate immigration route will require a valid Tier 4 visa and a new application, which will include payment of the visa fee and Immigration Health Surcharge.

    Since students will be able to stay and earn in the UK for a longer period of time, they will also repay a major chunk of the education loan. This will directly improve the approval rate for education loans for the UK.

    Read Also:

    How GyanDhan Makes It Easy To Get An Education Loan For UK Studies?

    GyanDhan has partnered with all the major lenders in the market, which includes nationalized banks, private banks, private lenders such as NBFCs, and international lenders such as Prodigy Finance. The GIR announcement has prompted many lenders to positively look at the aspect of lending funds for UK education. Students can now get an education loan for up to INR 40 lakhs even without collateral or a co-applicant from international lenders on applying for the loan via GyanDhan. More than 50 institutes are approved for lending making it easier for the students to secure funds for their dream college/university.

    What are the Documents Required for an Education Loan with Collateral for Studying in the UK?

    The exact list of documents needed varies from lender to lender, and case to case. Check all your options here.
    However, some common documents that are needed are:

    • KYC, citizenship and residence proof the applicant and co-applicant
    • Relevant mark sheets of student
    • Letter of admission 
    • Documents related to collateral
    • Fees structure

    What are the Documents Required for an Education Loan without Collateral for Studying in the UK?

    As mentioned earlier, various lenders require various documents. However, some documents which are absolutely mandatory are as follows:

    • KYC, citizenship and residence proof the applicant and co-applicant
    • Relevant mark sheets of student
    • Letter of admission 
    • Fees structure
    • Bank statement and income tax returns of the co-applicant

     

    How to Get an Educational Loan to Study in the U.K.? 

    Students can directly apply with the lender for an education loan. However, the process if fraught with numerous roadblocks and is quite tedious too. Students who wish to avoid the pitfalls associated with applying directly can always take the help of GyanDhan and get their loan application sanctioned at the earliest. We list below some of the steps needed to apply through GyanDhan.

    • Students can check their loan eligibility or even request for a call back from us. 
    • We will assign a dedicated loan counselor who will study your case and then recommend the best loan options for you. 
    • Once you have finalized the lender, the loan counselor will guide you on the steps that need to be followed.  
    • In the next step, students need to submit the documents. For this, our loan counselor will provide them a customized list of documents that would be required for their case. Students who are applying to a Nationalized Bank for their education loan and live in a metropolitan city can have their documents picked up from their home. For other cities, we will set up a meeting of the student with the branch head and coordinate. If the student has selected a Private bank, then the bank’s Relationship Manager will pick up the documents from their doorstep. And if the loan has to be taken from an NFBC, then the documents need to be uploaded on our website.
    • The bank now reviews the application of the student and might ask for additional information. If the bank finds the application suitable, it approves the loan application request.
    • The student and the co-applicant will sign on the sanction letter and accept the loan offer. They might also have to pay the processing fee, where applicable, at this stage. GyanDhan charges no fee for its services.
    • The bank then sends the sanction letter that has to be signed by the student and the co-applicant within 2 to 6 months of receiving the letter. Once the letter has been signed, the student can ask for loan disbursement. 

    The cost of studying in the U.K. is definitely quite high, but with education loan as a viable option, deserving students no longer need to shelf their plans of studying in the U.K. because of financial issues. 

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