Education Loan Options for UK 2025

The UK is one of the most popular study-abroad destinations for students willing to pursue their higher education since it is home to some of the top universities. Pursuing your higher education from these universities in the UK opens the door to various opportunities. However, arranging funds for masters in the UK can be challenging. In the academic year 2022-23, the number of Indian students enrolled in the UK rose to 173,190, marking a 39% increase from the previous year. Another reason for students to choose the UK for their higher studies is the shorter duration of a masters program, which usually lasts for one year, saving both time and money. The tuition fee for a masters program varies depending on the course and the universities, however, the average fee for international students is about GBP 35,000. One way to finance your higher education abroad is to go for a study loan UK since these loans cover tuition fees, living expenses, and other study-related expenses. These loans also serve as proof of funds for UK student visas, simplifying the visa application process.

Cost to Study in UK

Studying in the UK comes with two primary costs: tuition fees and living expenses. To finance your education smoothly, it is required on your part to understand how to get an education loan and how to apply for an education loan. These steps are crucial in order to arrange funds for your higher education. Tuition fees for masters vary depending on the course of study and university of enrollment. As for undergraduate programs, the tuition fees generally range from GBP 20,500 to GBP 45,000. For international students pursuing an MS in the UK, tuition fees can vary from GBP 19,000 to GBP 58,000. You must take into account all these factors while planning to go for higher studies in the UK. This section will provide you with the average monthly cost of living in the UK monthly cost of living in the UK.

Types of Education Loans for UK

Broadly, there are two main types of loan for students UK that they can take to study in the UK. These are:

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  Secured Education Loan: Also known as an education loan with collateral, this type of loan requires the applicant to provide security or collateral alongside their loan application. The collateral can be a residential property or more. To understand the different types of collateral education loans UK, you can click here.

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  Unsecured Education Loan: A popular choice of loan for international students in UK is an unsecured education loan that does not require the borrower to provide collateral as security. The interest rates charged on these types of loans are usually high as the risk involved is also high. Moreover, these loans generally require a co-applicant or co-signer, and the loan amount is determined based on the co-applicant’s income and CIBIL score. This is a common method for financing your higher education in the UK.

Both types of student loans for international students in the UK are designed to serve the diverse needs of students from around the world, ensuring they have the necessary financial support to pursue their educational goals in the United Kingdom.

Watch the video and learn about secured and unsecured loan options for the UK

Secured Education Loan for UK

Loans for students UK, specifically secured loans that are required to cover the expense of education in the UK generally involve collateral. The pledging of collateral allows the students to borrow higher loan amounts as against unsecured loans. These loans also have a low rate of interest as compared to unsecured loans. Moreover, if you go for a secured study loan for UK may eliminate the need for a co-applicant. If you are exploring UK education loan for international students, two public sector banks worth considering are the State Bank of India (SBI) and the Union Bank of India (UBI). This section deals with the comparative analysis of education loan in UK for these two banks.

Unsecured Education Loan for UK

If you don't possess the collateral to offer, there's no need to worry, as numerous private banks, NBFCs (Non-Banking Financial Companies), and international lenders can help you when applying for an education loan without collateral for UK. While private banks and NBFCs may require a co-applicant or co-signer with a minimum financial income and no liabilities, international lenders offer UK education loan without collateral, which do not need a co-applicant or co-signer.

Consequently, it can be concluded that each lender offering non collateral education loan for UK has its own pros and cons. To help you in selecting the right lender, we have prepared a comparison table that encapsulates all potential lenders that offer unsecured education loan for UK. These unsecured loans are being offered to students pursuing various programs like STEM courses and management courses. These loans are designed to help students secure an education loan to study in UK without pledging a collateral.

Expenses Covered in Education Loan UK

After your loan has been approved, you have the option to receive the funds through a disbursement. You can choose to withdraw the entire approved amount at once or take it out in installments based on your needs. It is generally advisable to opt for partial disbursement because the interest charged will only be applicable to the disbursed amount, not the total approved amount. By choosing partial disbursement for your education loan to study in UK, you can reduce the amount of interest you would pay compared to taking out the full amount at once. This is especially beneficial if you have opted for an education loan to study in UK without collateral, as managing costs efficiently is crucial without the backing of collateral.

The expenses, crucial for postgraduate funding UK, which may be covered under loan as per the lender will include -

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  Tuition fees
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  Accommodation cost
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  Food and groceries
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  Utility bills 
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  Health insurance
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  Visa fees
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  Expenses related to studies (lab fees, instruments, and more)

Eligibility Criteria for Education Loan UK

To be eligible for an education loan for studies in the UK, certain criteria must be met. These criteria for loans for students UK are:

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  Good academic history
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  Minimum age requirement of 18 years
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  Collateral requirement for secured loans 
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  Choosing a course of study with promising career prospects
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  Confirmation of acceptance from a recognized American institution for a full-time program

Documents Required for Education Loan UK

It is crucial for students to ensure they possess all the necessary documentation prior to applying for an education loan for studying in the UK. The document checklist can be comprehensive, and GyanDhan provides a tailored document checklist to assist in streamlining the submission process. Typical documents required to secure a study abroad loan for the UK include:

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  Loan application form
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  Passport-size photographs
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  Applicant’s KYC documents
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  Fees structure from the university
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  Standardized test scores - GMAT or GRE
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  Academic transcripts (School and Bachelor’s)
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  Resident proof of the applicant and co-applicant
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  Property papers (in case of secured education loan)
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  English proficiency test score - IELTS or TOEFL or Duolingo
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  Proof of admission: admission letter from university/institution
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  Income proof of the co-applicant (for unsecured education loan)

Special Education Loan Schemes in the UK

Below are some of the special education loan schemes available in the UK for students willing to pursue their higher education.

SBI education loan for the UK:

HDFC Credila education loan for the UK:

Avanse education loan for the UK:

Application Process For Education Loan UK

The process of getting an education loan is easy if done right and correct place. To ensure a smooth loan application process for studying in the UK, it is recommended to start around 4 to 6 months before your desired enrollment date. Managing the process independently with multiple lenders can be difficult, but GyanDhan provides a simplified solution for obtaining an education loan. The following steps illustrate how GyanDhan can assist you in easily securing an international education loan for studying in the UK.

Step 1: Assess your eligibility for a UK education loan on GyanDhan's platform.

Step 2: Connect with a dedicated loan expert who will guide you through the application process and recommend suitable lenders.

Step 3: Receive a customized document checklist to simplify the document arrangement process.

Step 4: Submit the required documents either in hard copy or soft copy as per the lender's instructions.

Step 5: Await verification, it generally takes 7 to 15 days. Once approved, sign the agreement letter and track progress on GyanDhan's user dashboard.

Step 6: Initiate disbursement following the lender's procedures, with funds directly deposited into your account or disbursed to the university by international lenders.

Repayment of Education Loan to Study in UK

When securing an education loan for UK, it is crucial to consider the repayment terms. Two important factors to evaluate when selecting a lender are the repayment tenure and the availability of moratorium repayment options. Various repayment tenures are offered, including partial simple interest (PSI), simple interest (SI), and equated monthly installments (EMI). To aid in choosing the most suitable lender for your needs, a comprehensive comparison guide has been developed, highlighting repayment as a key aspect when obtaining a loan for studying in the UK.

How to Choose the Best Lender for UK Education Loan ?

When exploring education loan options for UK, GyanDhan offers valuable advice to assist you in selecting the most suitable loan with a minimal financial burden in the long run. To ensure an informed decision, it is essential to compare the following aspects among lenders and loan schemes:

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  Interest Rate
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  Processing fee and time
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  Margin Money
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  Moratorium Period
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  Tax Benefit
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  Loan Duration
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  Covered Expenses
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  Prepayment terms and conditions

Scholarships for studying in the UK

This section is designed to help you explore various options to fund your education. One such option is scholarships, there are numerous scholarships available to help you fund your education or at least a part of your education. 

By carefully evaluating these factors, you can select the best educational loan option that aligns with your needs and offers favorable terms and conditions.

Before embarking on the education loan application process for the UK, it is essential to thoroughly research and compare the offerings of different lenders based on various factors. However, with GyanDhan, you can overcome these challenges by reaching out to us directly. Through our streamlined education loan process, you can take advantage of our free assistance in securing education loans for studying in the UK. Our experienced education loan counselor will evaluate your academic and financial profile and discuss the suitable loan options available to you. We have partnered with multiple lenders in the market, including government banks, private banks, and NBFCs. Don't wait any longer, check your loan eligibility now!

Frequently Asked Questions