Published date: 13 Nov 2019 Updated on: 06 Apr 2020 United Kingdom has long been one of the most sought-after study abroad destinations for Indian students. However, the trend had taken a slight downturn in the last decade. But, things are looking brighter again, and even amidst the uncertainties associated with Brexit, the number of Indian students going to The United Kingdom for higher studies has seen a slight increase. 14,074 Indian students went to the U.K. in the year ending September 2017, as against 18,735 Indian students who went in the year ending September 2018, which is a 33% increase in the numbers. Get Secured / Unsecured Loan For UK From GyanDhan Arrange a call back from an expert by filling up this form How Much Does Education in the U.K. Cost Indian Students? Finances play a major role in a student’s decision to go abroad for higher studies and the same is true for students headed to the U.K. too. Universities in the U.K. are known for having some of the most expensive programs of study. Let us take a look at the approximate cost of some popular programs at the undergraduate and postgraduate level in the U.K. Like every country, the cost of education depends on the University you are studying at, the program you study, the level of education, and the nationality of the student. The University of Oxford charges an annual tuition fee of £36,065 for an undergraduate program (of 4 years) in Engineering Science and £59,490 for a one-year MBA program. International students studying M.Sc in Computer Science at the university have to pay £26,405 a year. University of Cambridge has an annual tuition fee of £32,214 for an undergraduate program in Chemical Engineering, Computer Science Engineering, Management Studies, and an annual tuition fee of £45,660 for MPhil in Engineering. Students who wish to study an MBA at the University of Cambridge have to pay £57,000. International students who wish to study the four-year undergraduate engineering program in Software Engineering have to pay £31,750 per year and £33,250 annually for a two-year Master’s program in Computing. A full-time MBA costs £53,500 to international students and a one year MS in Business Analytics has a tuition fee of £29,500. We can see that the cost of education in the U.K. is quite high and a substantial number of Indian students shelf their plans for studying in the U.K. because of this. If you are one such Indian student, then we recommend looking at numerous options of education loans for the U.K. to Indian students. Why Take A Study Loan For The U.K.? As is evident from the above numbers, the cost of studying in the U.K. is quite steep, and students and parents have to dip into their savings to fund it. At such a stage, taking an education loan will help reduce the financial burden on the students and let them chase their dream of studying in the U.K. In this blog, we will take a look at the different education loan options that Indian students may avail when planning to study in the U.K. We have clubbed the education loans under different levels and programs of study for better understanding. So, without further ado, let us begin. What are the Options for Educational Loans? Students applying for an educational loan for studying an undergraduate program in the U.K. have the option of availing two types of loans - secured loan or loan with security and unsecured loan or study loan for the U.K. without security or collateral. A secured education loan is a loan wherein the applicant has to attach collateral while applying for the loan. The collateral can be any tangible or intangible assets, such as immovable property, FDs etc. An unsecured loan, on the other hand, is an education loan in which the applicant does not have to attach any collateral while applying for the loan. Different Options of Education Loan for the U.K. Educational Loan Options - Without Collateral Features Public Banks Private Banks NBFCs Example Lenders SBI, BOB Axis Bank Avanse, Incred Loan Amount (INR) Do not offer unsecured loans more than INR 7.5L for the UK Do not offer unsecured loans more than INR 7.5L for the UK Upto INR 25 lacs Interest Rate Range NA NA 13.5%-16% Processing Fees (INR) NA NA 1.5-2% of Loan Amount Payment During Study Period NA NA Full EMI Repayment Educational Loan Options - With Collateral Features Public Banks Private Banks NBFCs Example Lenders SBI, BOB Axis Bank Avanse, Incred Loan Amount (INR) Upto 1.5 Crores, depending upon the collateral value Upto 50 lakhs depending upon collateral value and co-applicants income Upto INR 50 lacs Interest Rate Range 8.85% - 9.75% 11% -12% 12.5%-15% Processing Fees (INR) 10,000/- + GST + Property Evaluation charges Upto 20 lakhs : Rs. 15000/- (refundable) More than 20 lakhs : Rs. 750/- on every lakh above 20 lakhs + + Property Evaluation charges 1-2% of the loan amount + Property Evaluation charges Payment During Study Period No Repayment Simple Interest Repayment Simple Interest Repayment Features like repayment period, processing time, expenses covered, etc. vary from lender to lender. Let us take a look at some of these: Repayment Period: Private banks have a repayment period of up to 20 years while public banks give ten to fifteen years to repay the loan. Students who wish to extend their repayment period can get in touch with GyanDhan. We coordinate with the lender and try to get an extension for our students. Processing Time: The processing time of NBFCs is the shortest. They take 4-5 days for processing an unsecured loan up to INR 25L and 9-10 days to process a secured loan up to INR 50L. It should also be remembered that a secured loan takes more time for processing as the lender needs more time to verify the documents related to the collateral. Hence, public banks and Axis Bank, which do not offer unsecured loans more than INR 7.5L, take much longer than NBFCs to process loans (at least 12 days). Expenses Covered: NBFCs cover 100% of the study expenses, while PSBs cover 90% and private banks cover 85% of the study-related expenses. Co-applicant’s Income Required: For loan without collateral, NBFCs consider the co-applicant’s income even if it is less than 20K for loans without collateral. However, for US loans amounting to INR 20L, the co-applicant income should be around INR 60K per month. If students are taking a loan with collateral, this income is not mandatory by any lender. It should also be remembered that the income requirement may vary from case to case. Common Decline Reason: The onus of sanctioning a loan lies on the lender and the application can get rejected too. Some common reasons for the decline of an education loan without collateral are low CIBIL score of the applicant and insufficient income of the co-applicant. An application for a secured loan gets rejected because of incomplete documents related to the collateral or poor CIBIL score. Students who are worried about their loan application getting rejected can take the help of GyanDhan and increase their loan acceptance chance by 50%. This is because we assign a dedicated loan counsellor who guides the students at every stage of the loan application process. Documents Required for an Education Loan with Collateral for Studying in the U.K. The exact list of documents needed varies from lender to lender, and case to case. Check all your options here. However, some common documents that are needed are: KYC, citizenship and residence proof the applicant and co-applicant Relevant mark sheets of student Letter of admission Documents related to collateral Fees structure Documents Required for an Education Loan without Collateral for Studying in the U.K. As mentioned earlier, various lenders require various documents. However, some documents which are absolutely mandatory are as follows: KYC, citizenship and residence proof the applicant and co-applicant Relevant mark sheets of student Letter of admission Fees structure Bank statement and income tax returns of the co-applicant How to Get an Educational Loan for the U.K.? Students can directly apply with the lender for an education loan. However, the process if fraught with numerous roadblocks and is quite tedious too. Students who wish to avoid the pitfalls associated with applying directly can always take the help of GyanDhan and get their loan application sanctioned at the earliest. We list below some of the steps needed to apply through GyanDhan. Students can check their loan eligibility or even request for a call back from us. We will assign a dedicated loan counselor who will study your case and then recommend the best loan options for you. Once you have finalized the lender, the loan counselor will guide you on the steps that need to be followed. In the next step, students need to submit the documents. For this, our loan counselor will provide them a customized list of documents that would be required for their case. Students who are applying to a Nationalized Bank for their education loan and live in a metropolitan city can have their documents picked up from their home. For other cities, we will set up a meeting of the student with the branch head and coordinate. If the student has selected a Private bank, then the bank’s Relationship Manager will pick up the documents from their doorstep. And if the loan has to be taken from an NFBC, then the documents need to be uploaded on our website. The bank now reviews the application of the student and might ask for additional information. If the bank finds the application suitable, it approves the loan application request. The student and the co-applicant will sign on the sanction letter and accept the loan offer. They might also have to pay the processing fee, where applicable, at this stage. GyanDhan charges no fee for its services. The bank then sends the sanction letter that has to be signed by the student and the co-applicant within 2 to 6 months of receiving the letter. Once the letter has been signed, the student can ask for loan disbursement. The cost of studying in the U.K. is definitely quite high, but with education loan as a viable option, deserving students no longer need to shelf their plans of studying in the U.K. because of financial issues.
This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/educational-loan-options-for-uk