Want to live in UK and experience a student life like never before? However, are you worried about the funding for your education? You’re definitely not alone in this. Every year, students face the challenge of managing lifestyle abroad. Fortunately, education loans bring ease to a student’s life with some reliable solutions. However, choosing the right loan requires some factors to consider such as favorable interest rates, flexible terms, and minimal hassle can be daunting.
Well, while Uninist understand such issues, we bring solutions too just like flexible student accommodation. In this particular blog, we are going to discuss the best education loan options for students who want to study abroad in 2026. So, without any more delay, let’s dive right into it.
Why Use Education Loans for Studying in UK?
Study abroad, especially in UK, involves enormous expenses such as fees, student accommodation, transport, and living costs. On an average, international students can expect to spend £12,000 to £15,000 per year, excluding fee costs as estimated by UK Council. For a student from India, taking an education loan for study abroad helps to cover these costs without spending personal savings or family funds.
What Are the Best Education Loan Options for Indian Students?
Public Sector Banks
- When it comes to education loans with lower interest rates, Public sector banks are the best in India. With government backed subsidies, you can find numerous ways to lower down the interest rates.
- State Bank of India (SBI) Education Loan offers loans up to ₹1.5 crore for studying abroad with minimum interest rates of 8.05% per annum.
- Whereas, Punjab National Bank Student Loans are available up to ₹1 crore loan amount with affordable repayment options and competitive interest rates.
- Bank of Baroda (BoB) Overseas Education Loan also offers non-collateral loans of up to ₹7.5 lakh at rates of about 8.35%-9%.
Pro Tip: The majority of public sector banks offer education loan subsidy plans under the Government of India’s Credit Guarantee Fund Scheme for Education Loans (CGFSEL), making your interest burden lighter.
Private Sector Banks
- Private banks provide faster processing but at a little more interest. Collateral-free loans are also available for smaller amounts.
- HDFC Education Loan: The rates of interest range from 9% to 13% with flexible repayment duration.
- ICICI Bank Education Loan: Offers up to ₹50 lakh security-free loans for study abroad.
- Axis Bank Student Loan: Excellent EMI option and easy documentation.
Non-Banking Financial Companies (NBFCs)
- NBFCs like Avanse, InCred, and Auxilo exclusively deal in education loans for foreign education. They are lenient about eligibility but charge higher interest rates.
- Avanse offers education loans of up to ₹2 crores at a rate of interest of 10.25% and more.
- Auxilo offers personalized loans with less documentation.
Understanding Education Loan Interest Rates and Eligibility
What Are Typical Interest Rates?
| Institution Type | Interest Rate Range (per annum) | Notes |
| Public Sector Banks | 7.5% – 10% | Subsidies Often Available |
| Private Banks | 9% – 14% | Faster Processing, Higher Rates |
| NBFCs | 10% – 15% | Flexible Terms, Higher Risk |
Who Can Avail Education Loans?
- Indian national pursuing abroad study in a recognized course.
- Admission in a good university (say, UK universities) confirmed.
- Age between 18 to 35 years.
- Co-applicant (most probably a parent or guardian) with good credit history.
- Proof of admission, financial papers, and identity proofs.
- How to Apply for a UK Study Education Loan?
How to Apply for an Education Loan: Step-by-Step Application Process
- Research and Compare Loans: Use an education loan calculator to determine EMI and total payable values based on loan amount, interest rate, and tenure.
- Prepare Documents: Principal education loan documents required are letter of admission of UK university, academic certificates and records, Identity and address proofs, income proof of co-applicant, passport and visa details (if applicable).
- Fill Application Form: Visit the bank or lender’s website and fill out the loan application.
- Submit Documents: Submit all documents for verification.
- Loan Sanction and Disbursal: The loan amount is disbursed upon sanction, typically to the university or as necessary.
- Repayment: EMI payment starts after a moratorium period (course duration + 6 months) in most loans.
What Is the Role of an Education Loan Calculator?
An education loan calculator helps you:
- Compute EMI monthly on principal, rate, and term.
- Organize your finances first before making an application.
- Compare loans from different lenders to obtain less expensive deals.
- For example, on a ₹20 lakh loan for 9% for 10 years, your monthly EMI would be about ₹25,500.
Special Focus: Study Loan for MBA in UK
MBA students typically require larger loans since the course charges are expensive. Banks offer specialized products for MBA students with flexible repayment tenure.
- Loan amount of up to ₹2 crores for high-ranked UK business schools.
- In addition to lenders, some offer scholarship and loan interest subvention to MBA students.
- Make sure to ask about education loan subsidy schemes offered on professional courses.
Living Costs in UK for Indian Students
It is crucial to know the cost of living in UK for overseas students. In addition to tuition fees, budget for:
- Student accommodation in UK: £500-£800/month
- Food: £150-£250/month
- Travel: £50-£100/month
- Miscellaneous: £100-£200/month
Organizing your loan to cover these is essential for a smooth study life.
Government Education Loan Subsidy Scheme: What You Need to Know
Interest subsidy from the Government of India is available under Central Scheme of Interest Subsidy (CSIS) for abroad studies on loans up to ₹7.5 lakh. This involves:
- No interest is charged for the moratorium period.
- Applicable for economically backward students.
- Only from public sector banks that are enrolled under the scheme.
- Check with your bank about eligibility to avail this concession.
Conclusion
Education loans are not an easy job, yet with apt information and guidance like an education loan calculator, you can avail a suitable loan for your needs. Whether opting for subsidized public sector banks or private banks for faster processing, pre-planning tuition fee and living expenses in UK will make your study abroad smooth sailing in terms of money.
Remember: Start early, weigh your choices, and have your documents in hand. Share your experience or question below – we’re here to help make your UK study dream come true!
FAQ
Which are the private banks that offer education loans?
Private banks that offer education loan for students are:
1. HDFC Education Loan
2. ICICI Bank Education Loan
3. Axis Bank Student Loan
4. Yes bank
5. IDFC First Bank
6. Kotak Mahindra Bank
Which are the public banks that offer education loans?
Public banks that offer education loan for students are:
State Bank of India (SBI) Education Loan
Punjab National Bank (PNB) Student Loan
Bank of Baroda (BoB) Overseas
Canara Bank
Other public/ Regional Banks
Is getting an education loan difficult?
If you have a good credit score then getting an education loan is not difficult, but yes its a long and time taking process and requires a lot of documents. But overall getting an education loan is not difficult.
