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UK Student Loan Options for Indian Students

06-May-2025
UK Student Loan Options for Indian Students
Pollstereducation
Study Abroad

UK Student Loan Options for Indian Students

Pursuing higher education in the UK can be a life-changing experience, but it also comes with a significant financial commitment. For many Indian students, one of the biggest hurdles to studying in the UK is funding. Thankfully, several student loan options—both in India and in the UK—can help cover tuition fees, living costs, travel, and other academic expenses.

In this comprehensive guide, we’ll explore the best UK student loan options for Indian students, how to apply, eligibility criteria, documents required, and some expert tips to make the loan application process easier.
 


Why Consider a Student Loan for Studying in the UK?

The average cost of studying in the UK can range between:

  • £10,000 to £25,000 per year (₹10–25 lakhs) for tuition

  • £9,000 to £12,000 per year for living expenses

This means a one-year postgraduate program could cost between ₹30–45 lakhs.

Rather than putting pressure on personal finances, a study loan enables you to:

  • Access world-class education

  • Build your credit history

  • Focus on academics without financial stress

  • Pay after your studies through EMI options
     


Types of Student Loans Available

Indian students generally have three main options when it comes to funding their UK education:

1. Education Loans from Indian Banks

  • Offered by public and private banks like SBI, Bank of Baroda, Axis Bank, ICICI Bank, HDFC Credila

  • Loans cover tuition fees, living expenses, travel costs, and insurance

  • Usually require collateral for loans above ₹7.5 lakhs

  • Offer tax benefits under Section 80E of the Income Tax Act

2. NBFCs (Non-Banking Financial Companies)

  • NBFCs like InCred, Avanse, Prodigy Finance, and Auxilo offer education loans without heavy paperwork

  • Often have faster processing times and flexible repayment options

  • Usually higher interest rates than public banks

3. UK-based Loan Providers

Some UK-based lenders like Prodigy Finance and Future Finance offer student loans to international students without requiring co-signers or collateral, based on:

  • Your admission to a top UK university

  • Your earning potential post-graduation
     


✅ Eligibility Criteria for Education Loans

Each lender has specific criteria, but generally, Indian students must:

  • Be an Indian citizen

  • Be 18 years or older

  • Have a confirmed offer (Conditional/Unconditional) from a UK university

  • Apply to courses that are recognized and career-oriented

  • Provide a co-applicant/guarantor (usually parents or close relatives)
     


Documents Required

Here is a general list of documents you’ll need:

For the Student:

  • KYC documents (Aadhaar, PAN, Passport)

  • Admission letter from the UK university

  • Academic transcripts and certificates

  • IELTS/TOEFL/GRE/GMAT scorecards (if applicable)

For the Co-applicant:

  • KYC documents

  • Proof of income (salary slips, ITR, Form-16)

  • Bank statements

  • Collateral documents (property papers, etc., if applicable)
     


Loan Amount & Coverage

Depending on the lender and your profile, the loan amount can vary:

Loan Type Loan Range Coverage
SBI Global Ed-Vantage ₹20 lakhs to ₹1.5 crore     Tuition, living, insurance, travel, laptop
Axis Bank Education Loan    Up to ₹75 lakhs Tuition, living, exam fees, visa, books
HDFC Credila ₹1 lakh to ₹40 lakhs Full tuition, living, other academic expenses  
Prodigy Finance (UK) $10,000 to $75,000 Tuition and partial living costs

 


Interest Rates Comparison

Lender Interest Rate (Approx.)     Collateral Needed?
SBI 9.5% – 10.5% Yes (above ₹7.5 lakhs)
HDFC Credila 11% – 13% Yes/No (depends)
Axis Bank 10.5% – 12.5% Yes
Avanse 11% – 14% No (for some cases)
Prodigy Finance          11% – 14% (USD-based) No

 


Loan Repayment Terms

Repayment typically starts 6 to 12 months after course completion. Most banks offer:

  • A moratorium period (study duration + 6–12 months)

  • Loan tenure of up to 15 years

  • EMI options based on your income post-study

Tip: Opt for longer tenures with part-payments to reduce interest load over time.


Scholarships vs. Loans – Which Is Better?

If you're eligible for scholarships, you should always apply. But many scholarships are partial or highly competitive. Loans provide:

  • Faster disbursement

  • Higher funding amounts

  • Flexibility in usage

Often, the best solution is a mix of both: scholarship + student loan.
 


Tips for a Successful Loan Application

  1. Apply early – ideally 2–3 months before your visa application

  2. Maintain a strong academic record

  3. Prepare a convincing SOP/Loan justification letter

  4. Ensure your co-applicant has stable income

  5. Choose lenders that allow prepayment without penalties
     


What Happens After Graduation?

Once you graduate, you can apply for a UK Graduate Route Visa (Post-Study Work Visa), which allows you to:

  • Work in the UK for 2–3 years

  • Start earning and repaying your loan

  • Apply for longer-term employment visas

Most banks and NBFCs allow repayment from the UK in foreign currency (with some exchange rate risks).
 


Pollster Education Can Help

We at Pollster Education – a trusted study abroad consultant in Mumbai – offer end-to-end support for Indian students planning to study in the UK. Our services include:

  • University selection and applications

  • SOP, LOR, and visa assistance

  • Loan assistance with leading banks and NBFCs

  • Budget planning and financial counselling

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