Studying in the United Kingdom, with its renowned universities and diverse opportunities, is a dream for many students worldwide. However, the financial aspects can pose a significant challenge. In this comprehensive guide, we will delve deeper into the various facets of study loan for UK, exploring types of loans, lenders, expenses covered, required documentation, and crucial factors to consider when choosing the right lender.
The UK’s allure lies in its prestigious universities and the plethora of opportunities they offer. Master’s programs, typically lasting a year, attract students globally. However, the cost of tuition, averaging around EUR 35,000 for international students, can be a substantial barrier.
The primary goal of a study loan is to give financially deserving students the support they need to realise their dream of attending the university of their choice. As soon as the applicant gets the unconditional offer letter from the university of their choice, they should begin the process of applying for an study loan for UK. It is highly recommended because the loan sanctioning process at banks and private financial institutions takes a long time because of different requirements and documentation procedures. Additionally, the institutions will not approve the loan amount until they receive an unconditional offer letter from the university proving your acceptance and you fulfil all the requirements set forth by the banks.
Cost of education in UK
Most universities in the world offer master’s degree programmes that last two years, but in the UK, you can get a master’s degree in just one year, which will cut down on both the amount of time you need to study and the cost. The whole cost of a one-year master’s degree in the UK varies from 22,000 to 35,000 GBP, or roughly 22 lakhs to 34 lakhs depending on the university and the study location.
There are also two-year master’s degrees offered in the 1+1 format, in which students study a one-year “Taught Masters Programme” and a placement year the following year. Most tuition fees are only assessed for a single academic year. Depending on the university and the master’s programme, a small number of universities may charge a nominal second year fee.
Types of study loan for UK – Students aspiring to study in the UK can generally opt for two types of study loan: secured loans with collateral and unsecured loans without collateral.
- Secured study loan for UK: A secured loan, also known as an study loan for the UK with collateral, requires the borrower to apply for a loan and provide collateral in the form of security. One or more houses may be pledged as security. Learn more about: Security types accepted as collateral for student loans.
Require collateral (e.g., property).
Lenders: SBI, BOB, UBI, PNB
Loan Amount: INR 7.5 Lakh – 2 cr
Interest Rates: 9.60% – 11.5%
Margin Money: 10% – 15%
Repayment Tenure: 12-15 years
- Unsecured study loan for UK: An educational loan for UK without collateral from the borrower is an unsecured education loan. As a result of the increased risk involved, these loans typically have high interest rates. Moreover, co-applicants or co-signers are usually needed for these loans.
No collateral but higher interest rates.
Lenders: ICICI, IDFC, Axis
Loan Amount: Up to 80 Lakh
Interest Rates: 11.5% – 13%
Margin Money: Nil
Repayment Tenure: 12-15 years
Making the right decision for study loan for UK
Choosing a suitable lender is an important first step. Think about things other than interest rates, such as processing costs, margin funds, length of the moratorium, and possible tax advantages. When contemplating a study loan for UK, several critical factors demand careful consideration. Firstly, scrutinize the interest rate structure, discerning whether it is fixed or floating, and evaluate its implications for long-term repayments. Equally important is the examination of processing fees and the time required for loan approval, as swift processing is imperative, especially when adhering to admission deadlines. Additionally, understanding the margin money requirement is vital; while certain lenders cover the entire cost, others may necessitate a financial contribution from the student. The moratorium period, or the grace period before repayments kick in, should be assessed, with a more extended moratorium providing valuable time for post-graduation settlement. Lastly, investigate the possibility of tax benefits, as some countries, such as India, offer deductions on the interest paid, alleviating the overall financial burden associated with study loan.
Expenses covered by study loan for UK:
Upon loan approval, students can choose to receive funds through a disbursement, covering various expenses such as:
- Tuition fees
- Travel costs
- Living expenses
- Health insurance
- Visa fees
- Study-related expenses
- Utility bills
Study loan for UK documentation required:
Before applying for an study loan, ensure you have the necessary documentation, including:
- Loan application form
- Passport-size photographs
- Applicant’s KYC documents
- University fee structure
- Standardized test scores (GMAT or GRE)
- Academic transcripts
- Proof of residence
- English proficiency test scores (IELTS or TOEFL or Duolingo)
- Proof of admission (admission letter from university/institution)
- Income proof of the co-applicant (for unsecured study loan)
Securing an study loan for studying in the UK is a crucial step for many Indian students. With various options available from public banks, private banks, and NBFCs, aspiring students can choose the best-suited option based on their needs and circumstances. Thoroughly understanding the terms, interest rates, and repayment plans offered by each institution is essential. By navigating through these options, Indian students can turn their dreams of studying in the UK into a reality, ensuring a brighter future filled with knowledge and opportunities.
In conclusion, investing in your future and opening up a world of opportunities through education is more important than simply paying back the loan. Choose your lender wisely, embark on your educational journey, and watch your dreams unfold in the vibrant academic landscape of the United Kingdom.