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The ultimate guide to college loans in the UK

21 Jul 2022 Author : Anna Peter

United Kingdom continues to be one of the most sought-after destinations for higher studies by Indian students. It is appealing in many ways; the climate, the people, polished lifestyle, and freedom and security provided by the government for international students. Studying in the country should not be just a dream.

Is studying and living in the United Kingdom as expensive as it is told?

Ever since the government announced an increment in the tuition fees, there has been chatter in various circles suggesting that UK universities can be afforded only by the rich. Such rumours are nothing short of fearmongering. However, tuition fees are high enough for all international students to come up with a proper plan. They also need to keep in mind that tuition fees can go up in near future and should be prepared for it.

Do you want to study in the UK?

As of 2022, India is the 2nd top country of origin represented at higher education institutions in the United Kingdom. UK saw some changes in the fees structure after the COVID-19 pandemic and related economic repercussions.

But Indian students can avail of study loans for the UK at low-interest rates with better payment plans, an easy application process, and timely approval. The process of getting a student loan will require a minimum number of documents.

Students need to keep in mind these important things. They should have enough funds for universities' tuition fees and living expenses like rent, food, transportation, medical costs, and others.

That is where the student loans come in.

What is a student loan?

A student loan is a type of loan meant to help students pay their higher education fees including books and supplies and living expenses. Education is costlier in the UK when compared to other nations.

In India, the government has launched a portal, Vidya Lakshmi, for students seeking educational loans. 5 banks including SBI, IDBI Bank, and Bank of India have integrated their system with the Vidya Lakshmi portal. Students can also approach the respective banks to get more details.

Why opt for a student loan?

A student loan in the UK covers all expenses like tuition fees, transport, housing rent, university fees, food, laptop, books, and other things living expenses required for education in the country.

Interest rates for educational loans are less when compared to other loans like home loans, car loans, etc. All Government banks offer a 0.5% discount to women.

When you take education loans, banks hold your liquid assets as security, such as FDs, insurance, and government bonds. This is a better alternative to liquidating significant assets to cover the cost of studying in the UK because it can disrupt your parents' long-term financial plans.

What to do to secure a student loan to study in the UK?

Do you aspire to study in the UK on a student loan? You must qualify for these eligibility criteria in India.

● To get an education loan, you must be an Indian resident.

● At the time of loan application, your age must be between 18 to 35 years.

● Your admission to a recognized institution in the UK must be confirmed.

● A co-applicant is required, either a parent or a spouse.

● Co-applicants should have a secure income.

What are the documents needed for securing a student loan?

To apply for an education loan to study in the UK, you must have the following documents:

● The bank's education loan application form

● Proof of admission to the institution

● Identity proof. It can be:

- Aadhar Card

- Voter ID

- Passport

- Driving License

● Address proof with documents such as the following:

- Bank statement

- Rental agreement

- Ration card

- Electricity or telephone bill

● Proof of age as mentioned in Aadhar Card/ Voter ID/ Driving License/ Passport

● Passport-size photographs

● Proof of income like salary slips provided at the time of loan application

● Financial documents

● Mark sheets from the latest exams like higher secondary examination or graduation results

● Copy of any scholarship letter

● List of expenses required for studying the course you’ve chosen

● Loan applicant's bank account statement

● Statement of assets and liabilities of co-applicant of the loan

Types of loans Indian students can avail themselves in the UK

Collateral Education Loan or secured education loan is the type of loan where the student will have to provide a security or collateral to avail when applying for the loan.

A non-Collateral Education Loan is the type of loan where the student doesn’t have to provide collateral.

Collateral loan

Non-Collateral loan

Requires collateral security to provide a student loan.

No need for collateral to get this type of student education loan.

You get a loan up to Rs 1.5 crores

You get a loan up to Rs 750,000 for the UK

Interest rate is usually lower.

The interest rate is usually higher.

Indian banks which provide loans

Below table features Indian banks which provide the educational loans:


Max. loan amount (INR)

Interest rate

State Bank of India



Bank of India



Bank of Baroda



Central Bank of India



Allahabad Bank



Punjab National Bank

Determined based on need








Axis Bank

75,00,000 INR


What to know about loan repayment?

The repayment plan for education loans for the UK in India is as below:

Public Bank: If students are taking loans from a public bank, then the repayment will commence after completion of one year of the selected course. A loan can be repaid within a year and a half from commencement.

Private Bank: If the loan is taken from a private bank, then the repayment will commence and continue up to a course period of over a year or 6 months after getting a stable income. Repayment of this type of loan can be done within 15 years.

Hopefully, the above guide has provided enough information regarding student loans. If you aspire to study in the United Kingdom, Scholab can help you with the same. The website will provide all information you need for education in the UK.

As a provider of overseas consultancy agencies, Scholab is a front runner all over the UK, Australia, Canada, New Zealand, and Ireland.