UK Education Loan for Indian Students (2025 Guide) | Eligibility, Documents & Interest Rates

With its world-class universities and globally recognised degrees, a multicultural environment, and great career opportunities, the UK remains one of the premier choices for Indian students. However, big dreams come with big prices attached, so UK education loans become an important part of the study-abroad journey for many Indian students.

This comprehensive guide for 2025 will explain everything you need to know, from the type of loan to eligibility, documents, bank options, interest rates, collateral versus non-collateral loans, and expert tips to increase your loan approval chances.

 

Overview – Studying in the UK & Funding Options

 

The UK offers various prestigious programmes in business, technology, healthcare, arts, and engineering. However, the overall cost of studying in the UK, including tuition and living expenses, often ranges from ₹ 25-45 lakhs a year, depending on the course and city.

This is normally financed by Indian students through:

• Education loans, either secured or unsecured

• Scholarships - university, government, or private

• Savings

• Part-time jobs after landing in the UK

• Financial support from family

Among these, study abroad loans for the UK are the most reliable option, especially because they also help to meet the UK's student visa financial requirements.

 

Types of Education Loans for UK Studies

 

Indian students generally apply in the following two categories when applying for a study abroad loan for the UK:

1. Secured Education Loans (Collateral Loans)

These loans require collateral such as:

• Residential property

• Fixed deposits

• Insurance policies

• Non-agricultural land

• Advantages:

• Lower interest rates

• Higher approval probabilities

• Higher loan amount uptoes ₹1–1.5 crore

• Banks like SBI, BOB, and PNB prefer secured loan options for UK studies.

 

2. Unsecured Education Loans (Non-Collateral Loans)

These loans are provided without any collateral and are best suited for students with no assets.

Lenders include:

• Private banks include: ICICI, Axis, IDFC First

• NBFCs (HDFC Credila, Auxilo, Avanse)

Advantages:

• Faster processing

• Ideal for students with a strong academic profile.

Eligibility for UK Education Loans

 

While the criteria vary from lender to lender, the usual requirements are as follows:

• Indian citizenship

• An admission letter from a recognised UK university

• Good academic standing

• Clear career prospects and strong course relevance

• Co-applicant with stable income (for unsecured loans)

• Clean credit history (CIBIL score 650+)

• Lenders consider both the student profile and the co-applicant financial capacity.

 

Documents Required for the Loan

The following are the essential documents necessary for applying for a UK education loan for Indian students:

• Student Documents

• Passport

• Offer letter / CAS (Confirmation of Acceptance for Studies)

• Academic records (10th, 12th, graduation mark-sheets)

• Entrance test scores (IELTS / TOEFL / GMAT / GRE, if applicable)

• Statement of cost of study

• Co-Applicant Documents

• PAN and Aadhaar

• Income proof: Salary slips/ITR/Form 16

• Bank statements: last 6–12 months

• Proof of business income (if self-employed

• Collateral Documents (If applicable)

• Property documents

• Valuation report

• Encumbrance certificate

• FD receipts / insurance documents

Complete documents are processed faster.

 

Interest Rates & Repayment Terms

 

Interest Rates (2025 Estimates):

• Public banks: 9%–11%

• Private banks: 11%–13.5%

• NBFCs: 12%–14.5%

Repayment Terms:

• Tenure: 10–15 years

• Moratorium: Course duration + 6–12 months

• EMI starts after moratorium.

The interest may be simple interest or partial interest, during the moratorium, at the discretion of the lender.

 

Government Schemes & Bank Options

Top Public Banks

• SBI Global Ed-Vantage Scheme

• Bank of Baroda International Study Loan

• Punjab National Bank Udaan

 

Private Banks

• ICICI Bank

• Axis Bank

• IDFC First Bank

NBFCs (Faster Approvals)

• HDFC Credila

• Avanse

• Auxilo

Government Schemes

• Dr. Ambedkar Central Sector Scheme

• Padho Pardesh Schemee (for new applicants this scheme has been discontinued but earlier beneficiaries remained seeded)

These schemes provide interest subsidies and support to economically weaker students.

 

How to Increase Loan Approval Chances

To maximize your chances of landing a UK study loan, here are some expert strategies:

1. Opt for Recognised and Ranking-Based Courses

The universities that show up in global rankings increase your loan approval odds.

2. Maintain a strong academic profile

Good grades reflect employability—something banks value highly.

 

3. Strengthen Your Co-Applicant Profile

Ensure the co-applicant has:

• Stable income

• Strong credit score

• Clean financial history

 

4. Prepare Your Documents in Advance

Please submit complete and clear documents to avoid delays.

5. Write a Strong SOP or Academic Justification

Some lenders also consider this for unsecured loans.

6. Compare Multiple Lenders

Always compare:

• Interest rates

• Processing fees

• Forex charges

• Repayment flexibility

 

7. Apply Early

It is recommended to start the loan-processing at least 3–6 months prior to your UK intake to avoid last-minute visa delays.

 

Final Tips for Smooth Loan Processing

• Keep soft copies of all the documents ready.
• Always cross-check the lender's pre-Visa disbursement requirements.
• Ask about hidden charges: forex, insurance, and processing fee.
• Get your loan sanction letter before applying for the visa
• Choose a lender that offers quick top-up in case of tuition increase.
• Proper preparation will therefore make the process of getting a UK education loan for Indian students much easier and quicker.
  
  

Frequently Asked Questions

 

1. What is the minimum amount required as a loan to study in the UK?

Most students need at least ₹20–30 lakhs, considering tuition fees and living expenses.

 

2. Is it possible to obtain an educational loan without collateral?

Yes, many private banks and NBFCs provide education loans without collateral for UK studies. 

 

3. How much loan should I show for a UK student visa? 

You must show funds covering your first-year tuition and 9 months of living expenses.

 

 4. Which banks offer the best study abroad loans? 

Some of the popular choices for UK study loans are SBI, BOB, ICICI, Axis, HDFC Credila, Auxilo, and Avanse.