Available Options For Education Loan 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.

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. In the UK, the master's is around 1 year; therefore, you save both time and money. Therefore, a student needs to arrange GBP 35,000 on average to study in the UK for a year. Many other funds get added to this, making the 1-year study cost also expensive. To cover these costs, one can use education loans to cover tuition fees, living expenses, and other study-related expenses. An education loan can also help you avoid visa rejections and get early approvals.

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.

Working while studying abroad can help fund your education - explore how to earn while studying in the UK in our comprehensive guide.

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 for education loans in the UK, check out our in-depth explanation of collateral security.

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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

Banks Offering Education Loan for Studies in the UK

There are many banks offering education loans however, the lenders and type of loan affect the loan amount, along with the interest rate on them. Let’s discuss them in detail. 

Secured Education Loan for UK:

These types of education loans require collateral and offer a low interest rate on the loan amount. Public sector banks can be the perfect choice for this type of loan. Refer to the table below to know the interest rates charged by different lenders.

Unsecured Education Loan for UK:

If you don't possess the collateral, you can go for an unsecured collateral loan provided by the private banks, Non-Banking Financial Companies (NBFCs), 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, international lenders offer UK education loan without collateral and a co-applicant.

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 Study 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: