锘� Everything you need to know about Education Loan to Study in UK

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Education Loan to Study in UK

The UK is a leading country in the world in many academic disciplines such as engineering, business, and management, art and design, law, and finance. A good number of international students from all over the world move to the UK for further education. 

The biggest challenge international students have to deal with is an arrangement for funds. Studying abroad is no doubt costlier than studying in the home country. Cost of studying in UK is also expensive and it is difficult for many students to afford it. So in this article, we are enlightening you with complete information about Education Loan to Study in UK.

How to get the Education Loan to Study in the UK?

International Students looking forward to studying in the UK with the help of an education loan must start their process at least 7-8 months before their semester begins. To get UK Student Loans, International applicants must go through the following process:

 

  1. Research about banks providing international education loans and their options.
  2. Calculate the loan amount including academic and non-academic expenses.
  3. Find as many banking institutions as you can find, check the education loan eligibility criteria for each of them.
  4. Once you decide on the bank and the loan amount you require, you should fill out the student loan application form.
  5. Submit all the documents such as identification documents, academic documents, collateral documents, admission letters, etc to the banking institution.
  6. Get an admission letter from the admission office of the respective university in the UK.
  7. Get visa confirmation and submit it to the loan-providing institution.
  8. Get your loan sanction letter.
  9. Disbursement of Loan Amount.

In the next part, we will discuss each step in detail. Understand each point and act well, as it is a big decision which will affect your further financial life.

Research about the banks and loan options

First, you need to research the different banks and loan options. When you try to research you will find plenty of options around you. But before you research, there are a few things you have to consider. Important factors to keep in mind before applying for the education loan are:

  • Decide the university you want to study in and the course you want to pursue.
  • Calculate the amount you will require to study abroad in the UK.
  • Estimate the amount you are going to pay by your pocket and the amount of loan you want. 
  • Enlist all the documents you will require during the application.
  • Be ready with the collateral or guarantor, as required.
  • Make sure to apply for the international educational loan before the three months of your student visa interview date.
  • Estimate the time of payment of funds by the bank.

Once you are clear and ready according to the above-mentioned points, then you should compare the different loan options available for you.

Comparison of Education loan options

You should compare the different loan options provided by the different financial institutions for studying in UK and select the one which fulfills your requirements. Compare the loans options on the following factors:

  • Interest rate
  • Expenses covered such as tuition fee, books, travel, etc.
  • Processing Fee
  • Loan margin
  • Income tax exemptions
  • Loan processing time
  • Prepayment terms

Each factor is important, so take your time and choose wisely. If you decide on careful planning and comparing you can save a few pounds. 

Calculate the amount required to study in UK

In the next step, you have to estimate the total amount you will require to study abroad in UK. While calculating the expenses, consider the following expenses:

  • Tuition Fee:- The university fee for each academic period.
  • Other compulsory Fees:- This involves expenses like Exam fees, student center fees, extra activity fees, recreation fees, etc. It varies with the university you choose.
  • Accommodation:- This expense includes on-campus housing expenses and the price for the regular meals. If an international student chooses the option of living off-campus, then the expenses covered will be the rent, utilities, and transportation expenses.
  • Books and Supplies:- You will also need to cover books and supplies expenses during the study in UK. Supplies include laptop or computer expenses, lab expenses, etc.
  • Transportation:- Expenses for airfare, parking permit, monthly bus/ train pass, etc.
  • Health Insurance premium for the student, if required.

Before applying for a student loan to study in UK, you should have a clear idea about how much money you will require and how much you are going to pay from your pocket.

Check the Eligibility Criteria to apply for an international education loan

Before applying, You should check whether you are fulfilling the eligibility criteria for an education loan or not. Different banks have different rules and eligibility criteria. The common eligibility criteria followed by all the banks are:

  • The applicant should have an exceptionally good academic record.
  • The student should have a CAS (Confirmation of Acceptance for Studies) issued by the university in the UK.
  • The applicant must have enrolled in a career-oriented course of studies. 
  • The student must have approval/ application of Tier-4 Visa or higher Tier-2 Visa for loan application
  • The applicant must be above 18 years of age otherwise his or her parents will have to apply for the loan.

International Education Loan application form.

In the next step, you will legally start the process of applying. After finalizing the bank and loan amount, you have to fill out the application form With the correct information. It can be online or offline as accepted by your chosen bank. 

You have to fill in your name, parent's name, address, ID proof, course name, university name, duration of the courses, date of birth, age, Income, Liabilities, employment details, type of security, tuition fees, other expenses, etc. Make sure to fill accurate information in it and recheck it before applying.

Submit the required documents

Every applicant needs to submit some common and necessary documents along with the Loan Application Form while applying for an education loan for UK study. The list of these documents required while applying for the loan are listed below:

Documents for Students (Primary Applicant)

  • Properly filled out international education loan application form of the respective bank.
  • A copy of a valid passport.
  • Applicant’s latest passport-sized photos
  • Mark sheets / passing certificates of 10th, 12th, and Degree courses.
  • Proof of your identification, such as Aadhar Card, Voter’s ID Card, Valid Passport or PAN Card.
  • Proof of Residence. For example Driving License, Aadhar Card, Telephone /Electricity bill.
  • Proof of Age. You can present your Birth Certificate as evidence.
  • Copy of your admission letter in the UK university along with fees schedule.
  • List of anticipated expenses for the chosen course.
  • Scoresheets of exams are mandatory for studying in the UK. For example TOEFL, IELTS, GRE, GMAT, SAT, ACT, etc
  • Copies of Scholarship letter, if granted any

Documents for Co-Applicants

  • Proof of Personal Identification. 
  • Proof of Residence. 
  • Two latest passport-sized photos.
  • Proof of income of the co-borrower such as salary slips or Form 16.
  • Bank Statement for the last 6 months.
  • A small statement of assets and liabilities.

Other Optional Documents

  • Certificates of Extracurricular activities.
  • Official Certificate of Minority Caste.
  • Documents regarding any disability or illness.

Letter of acceptance from the university in UK.

You have to get an admission letter from the University of UK. You have to show proof while applying that you are admitted to the UK University. For international students, there are plenty of universities in UK to choose from. Here are the top universities in UK:

  1. University of Oxford 
  2. University of Cambridge
  3. Imperial College London 
  4. The University of Edinburgh 
  5. The University of Manchester 
  6. King's College London 
  7. The London School of Economics and Political Science (LSE) 
  8. University of Bristol 
  9. The University of Warwick 
  10. University of Glasgow 

The list does not end here, you will have a wide range of options in the UK where you can pursue your higher education. You will get full information here: Universities in UK

Apply and submit the confirmation of Student Visa for UK.

It generally takes 3 weeks to get a student visa but it is always recommended for you to apply for it at least 3 months before the course commencement. Remember to check the official websites of your chosen universities and collect the necessary information regarding the student visa for UK. 

There are usually two ways through which you can apply for a study visa for UK:

  • You can apply for a UK visa through the British embassy or consulate in your home country. 
  • You can apply for a UK visa online through the official website of the British government except for the residents of North Korea.

Once you Get the Tier-2 or Tier-4 visa confirmation, submit it to the bank to get your loan sanction letter.

Loan sanction letter

As soon as the bank approves your loan, it will issue a loan document that has all the terms and conditions of the loan. It will include the borrower's name, agreed loan amount, interest rate, the period of repayment, the signature of both the parties, collateral security, etc. Read the agreement carefully and if you agree, sign it.

Disbursement of Loan Amount

Submit the ‘Education Loan Sanction Letter’ to the immigration office and get your student visa confirmation. Submit the visa confirmation to the banking institution to start the loan disbursement procedure.

The bank will pay the amount to you in installments or as required by the university. The process will be mentioned in your loan agreement. Once you receive your amount, spend on the necessary expenses such as tuition fee, books, supplies, accommodation, etc.

Security for the international education loan

Generally, banks do not ask for collateral security for loans that include less amount. However, for a high amount of loans, most banks require collateral or a guarantor.

What is Collateral?

Any asset either movable or immovable, attached as a security with the loan application for taking an education loan is collateral. Most of the banks ask for collateral as security to reduce the risk involved in paying off the credit.

Instruments used as collateral: 

  • Land or building. For example houses, commercial places.
  • Government Securities and public sector bonds
  • LIC policy, gold, shares, debentures,
  • Fixed deposits in the name of the student, parent/guardian with a suitable margin.

Who is the Guarantor?

A guarantor is required for getting international education loans to study in UK. It could be your parent or any other family member. The bank will conduct an in-depth background check of your guarantor’s credit history before finalizing your loan application.

There are some of the important things banks inspect before granting a loan:

  • The repayment capacity of the student's parents/family/Sponsor.
  • The representative of the bank will verify your property used for collateral and prepare a report.
  • Additionally, the value of Collateral Security is calculated. Banks usually get the valuation of the collateral done from an approved Valuator only then process the loan application.

Repayment of Education Loan to Study in UK

The loans taken to study in UK are to be paid in installments, as decided in the loan agreement. Pay the installments on time with the agreed amount. Make sure you do not delay in paying the installments.

The loan taken to study abroad in UK can be paid in installments. The loan can be repaid within 10 -15 years after taking the loan. The repayment period starts from 4- 12 months after the end of the course. However, the waiting period and installment amount policy differ with the bank and loan amount.

You should also read these articles:
Best Courses to Study in UK to Get a Good Job
Stay back and Work Permit after Study in UK
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