Guide On Student Loans For UK - Eligibility, Features etc.

Student Loans
for UK

Note: The education loan information on this page is provided only for the information of the website users, digibank by DBS doesn’t offer this product at the moment.

Student Loans for UK

Your go-to guide on loans for studying in the UK

It would help if you understood the types of student loans for international students in the UK available in India. Along with understanding this, you should also consider other factors like interest rate, moratorium period, expenses covered before deciding on a loan.

All about international student loans

Students from across the world love to study in the UK. And that’s not just because of the world-class universities located here; it’s also because Britain is a wonderful country to explore. Each year the number of student visa applications from India increases. In September 2019, nearly 30,000 students from India received Tier IV (study) visas, 63% higher than September 2018. These numbers prove that the UK continues to be a popular study-abroad destination for Indian students.

However, it is also one of the most expensive countries to study and stay. The good news is that many banks and NBFCs provide an education loan for studying in the UK. If you are planning to send your child to the UK, you should consider taking a loan. You can look forward to competitive interest rates and flexible repayment options.

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Types of UK education loans for international students

Students applying for undergrad programs in the UK can choose between two types of loans -

Loan Type	Features
Secured loans	Need to attach collateral as security
	Can be in the form of tangible (house, commercial property) or intangible assets (FDs, stocks, bonds)
	Have lower interest rates
	Provided by public or private banks, and NBFCs

Loan Type	Features
Unsecured loans	There is no loan collateral
	Interest rates are higher
	Only up to 7.5 lakh by banks, NBFCs may approve higher loan amounts

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Education loan for the UK - Features

If you want to apply for an educational loan for a Master’s in the UK or any other course, you must consider some of these factors before taking a loan.

01. Processing time

Secured loans take longer to process than unsecured loans. This is because the lender needs to verify documents related to collateral. It can take anywhere between a week to two weeks for you to secure your loan.

02. Repayment

Public banks, private banks, and NBFCs have different repayment periods. However, most financial institutions will offer anywhere between 10-20 years to pay back your loan.

03. Expenses covered

Some financial institutions will cover all your study expenses, while others might cover a percentage of it. Look for loans that provide comprehensive coverage and include not just tuition fees, but-

College hostel fee
Library, lab fee
Study material
Travel expenses
Expenses incurred for study tours, projects, etc

04. Moratorium period

This is the time given by the bank before the repayment tenure starts. Banks usually allow between 6 months and a year after the completion of your course for repayment. If you get a job, you might have to start repaying your loan earlier.

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Student loans in the UK - Eligibility

To apply for a student loan, you must fulfil the following criteria –

You must be a citizen of India
You should have a CAS certificate (Confirmation of Acceptance for Studies) from a recognised university in the UK
You should have approval/application of Tier-4 Visa or Tier-2 Visa

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Steps to get a student loan in the UK

To apply for a student loan,

Consider the course and the college you want to choose.
Estimate the amount you will need for your academic/non-academic expenses in the UK.
Check multiple loan options and pick one that’s best for you. The loan processing time is relatively shorter because of India’s favourable ties with the UK.
When you select a lender, fill out the bank’s loan application form.
Along with your loan application form, provide documents like.
- Identification documents
- Academic records
- CAS letter
- Collateral documents,
- Tier-2 or Tier-4 student Visa

Once this is done, you will get a student loan sanction letter, which you will need to submit to the immigration office for Visa confirmation. Submit your Visa confirmation to the bank to finalise loan disbursement.

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Conclusion

Getting an educational loan can be highly beneficial if you avail it from a reputed bank that offers helpful features and benefits. But ensure you have all the necessary documents, most significantly, your offer of admission to a UK university, before you set out to meet a lender for your loan requirements.

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Frequently Asked Questions

Can I get a loan for a distance/part-time course?

Most banks don’t offer loans for correspondence/part-time courses. However, if your course and college are approved ones, there’s a slight chance they might. Check with your local banks to understand their education loan terms and conditions before pursuing the course.

Is interest charged while I am studying?

During your course, simple interest will be charged. You can choose to pay this amount or allow it to accumulate till after you complete your course. After the moratorium period, accumulated simple interest is credited to the principal amount, and from then onwards, you will have to pay compounded interest.

Do educational loans have income tax benefits?

Borrowers can get tax benefits on interest paid on Under Sec 80E of the Income Tax Act, borrowers can get tax benefits on the interest paid on education loans. These benefits apply when you start paying the interest until you pay off the full interest amount or for a maximum period of 8 years, whichever comes first.

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