A complete guide on education loans for studying in the UK

The UK has been a preferred choice for Indian students due to its prestigious institutions. As per the QS World University Rankings 2023, 4 out of the top 10 global institutions are based in the UK.

If you are planning to pursue higher studies in the UK but are worried about the high cost of education, banks and financial institutions can help you achieve your dreams by offering Education Loans. It is a credit facility offered by banks and financial institutions to help students meet their expenses while they study abroad.

Need for an Education Loan to study in the UK

Generally, universities or colleges in the UK charge high tuition fees for any course. International students might find it tough to meet these requirements in addition to the high cost of living in cities like London.

An Education Loan is a great way to cover their financial requirements. Many banks and financial institutions also offer Education Loans without collateral to fund the education of students. Furthermore, you can also avail of tax benefits u/s 80E of the IT Act.

General documents required to apply for an Education Loan

You must furnish certain documents while availing of an education loan. Axis Bank Education Loan for studies overseas and in India starts from ₹50,000. It offers benefits like a simple documentation process; tax benefit u/s 80(E), quick disbursals, longer repayment tenure, etc.

The Education Loan tax benefit calculator gives you an idea of the actual tax benefits on loans. The documents for an Education Loan include the following:

1. Duly filled loan application form
2. Mark sheets of SSC, HSC, Degree Courses, National level entrance test
3. Course admission proof with fee schedule
4. Copies of a document confirming scholarship (if any)
5. Passport-size photographs
6. Last six month’s bank account statement
7. A short statement of co-borrowers assets and liabilities
8. Income proof
9. Photo identity proof
10. Address proof
11. Age proof

This information varies between lenders and is subject to change with time. Always consult your lender for updated information.

Different Types of Education Loans

Students can opt for either secured or unsecured education loans. The Education Loan interest rates vary across lenders. The features listed below will help you make your decision.

Also Read: [Chart a new career path with an international Education Loan]

Expenses covered under Education Loans

A myth hovers around Education Loans that they do not cover all student expenses while pursuing their education abroad. This is not true. Education loans cover the following expenses:

1. Tuition fees
Every Education Loan provider in India covers tuition fees. When you compute the Education Loan amount required for your course, tuition fees should be the top element.

2. Cost of living
Living expenses in the UK could include the cost of accommodation (including deposit), food, and daily expenses like to-and-fro transport to the university, etc. Include these expenses when you calculate your international course expenses.

3. Travel fare 
Another expense that Education Loans cover is flight tickets. You can include this in your loan amount quotation to the bank.

4. Health insurance 
Students heading abroad for studies must have health insurance; it is a mandatory requirement of universities. Hence, you can include health insurance in the Education Loan details.

5. Study material expenses
You can also include study material expenses for books, laptops, field trips, and miscellaneous expenses in your loan quotation.

Repayment of Education Loan

Generally, the repayment of Education Loans begins post-graduation of the student. This ensures that the student does not worry about finances during the course. The repayment through monthly EMIs commences once the moratorium period terminates. Check out the Axis Bank Education Loan EMI Calculator.

The moratorium period refers to the course duration plus the grace period (if provided). You can find this information in your loan sanction letter. 

Conclusion

Pursuing your education abroad no longer remains a dream. Banks and financial lenders help realise this dream with their Education Loans.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision