Loan Options for Studying in the United Kingdom

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The United Kingdom is among the most desirable study destinations for Indian students. The graph did get altered due to the COVID-19 pandemic but, things are looking brighter again. Right after the reintroduction of the Graduate Immigration Route, the UK is the preferred study abroad destination by Indians.

As the cost of studying in the UK is expensive, it is not possible for every student to arrange the funds by himself. The best way to arrange the funds is to take an education loan for the UK.

Let’s explore the loan options…

Cost of Education in the U.K.

Education in the UK purely depends on the institution and the course opted for and the nationality of the student. The approximate cost of some popular courses at the undergraduate and postgraduate level in the U.K. Universities.

• The annual fee at the University of Oxford is around £36,065 for an undergraduate program (of 4 years) in Engineering Science
• The MBA course for a year is around £59,490
• International students pursuing M.Sc. in Computer Science pay around £26,405 a year.
• An undergraduate program in Chemical Engineering, Computer Science Engineering, Management Studies at the University of Cambridge costs around £32,214 for a year.
• Around £57,000 is paid by students who wish to go for an MBA
• The four-year undergraduate engineering course in Software Engineering for international students is approximately £31,750 a year.
• The Master’s program in Computing comes up to £33,250 annually for two years.
• International students who wish to do a full-time MBA costs £53,500
• A one-year MS in Business Analytics has a course fee of £29,500.

Importance of Study Loan for The U.K.

• Avoids students and parents from dipping into their savings to fund education overseas
• An education loan helps reduce the financial burden
• The education loans have different schemes to suit the interest and budget of budding students.

Options for Educational Loans for the UK

Budding students applying for an educational loan for pursuing an undergraduate program in the U.K. have the choice of procuring two types of loans

• Loan with collateral or secured loan
• Loan without collateral or unsecured loan

Education loan for the UK with Collateral

• Popular Indian banks demand collateral as security in order to reduce the risk involved in paying off the credit.
• Shares, bonds, bank deposits, mutual fund units, gold, debentures, bank deposits, life insurance policy, and government securities, are also recognized as collateral.
• Liquid assets such as immovable property like a house, any commercial asset, or just land can be considered as collateral.

Education loan for the UK without collateral

• Yes! An education loan for study abroad is now possible without collateral.
• Students can get a loan of up to INR 4 lacs without collateral.
• Loans amounting to INR 7.5 lacs, parents or legal guardians are made joint applicants and third-party assurance is obtained.
• For an amount exceeding INR 7.5 lacs, an asset is mandatory as collateral.

Education Loan Without Collateral and Co-applicant

• For students who do not have any collateral or co-applicant, there is an option to take an education loan from an international lender.
• International lenders are usually based out of the UK and offer loans at modest rates.
• UK Loans are given in Euro.
• They offer loans for some colleges mentioned in their list. Features like repayment time, processing period, costs covered. vary from lender to lender.

Repayment time:

• Private banks have a repayment time of up to 20 years while public banks spill over ten to fifteen years to repay the loan.
• Students who wish to extend their repayment period can get in touch with the lender and get an extension

Processing period:

• NBFCs offer the shortest processing time. They take only 4-5 days for processing an unsecured loan up to INR 25L and around 9-10 days to process a secured loan up to INR 50L.
• Please remember that secured loans take more time for processing as the lender needs time to verify the related documents.
• That is the reason public banks do not offer unsecured loans more than INR 7.5L and take up to 12 days.

Expenses Covered:

• NBFCs stretch over 100% of the study expenditures
• Public sector banks cover 90%
• Private banks offer up to 85% of study-related costs.

Co-applicant’s Income proof:

• For education loans without collateral, NBFCs acknowledge the co-applicant’s income even if it is less than 20K.
• For students taking a loan with collateral, income is not mandatory by any lender.
• Income requirements may differ from case to case.

The expense of studying in the U.K. with an education loan is a viable option. If confused, take assistance from an education loan counselor like GyanDhan. Select the education loan product wisely and ward off all the struggles of arranging funds for your study in the UK!