Understanding the International student Loan Ecosystem in the UK
Benefits of getting a Student Loan
Available Sources of Funding for International Students in the UK
Top International Student Loan Providers in the UK
Loan Eligibility Criteria for International Students in the UK
How to get a quick loan approval
Common Mistakes International Students make that negatively impact their Loan Application Process
Introduction
An international student is someone who holds a student visa or travel document from the embassy of a country other than their own to study. They are students who undertake full or part of their academic studies outside their home country. Studying in the UK as an international student can be a fun, exciting, and life-changing experience, but this comes at a cost,(such as the high cost of tuition, and living expenses) which can be overwhelming for many students.
To cope with this, many students turn to loans to help ease the financial burden associated with gaining a world-class education.
The purpose of this article is to help prospective international students going for studies and those already in the United Kingdom discover the challenges and success routes to take in making the loan approval process quick and more efficient.
Understanding the International student Loan Ecosystem in the UK
Studying in the United Kingdom(UK) comes with making many informed decisions. The most critical of those decisions is the cost of studying, such as money for application fees, accommodation, visa application, and tuition. Financing all these can be so hard to take on individually which is why an alternative option exists.
The United Kingdom(UK) has a well-structured and simplified financial system for citizens, non-citizens, and international students to access. This includes loans and grants provided by scholarship bodies, universities, non-governmental agencies, private organizations, such as Banks, and other financial institutions, and lastly, government loans, however, government loans are not open to international students.
While obtaining a loan may seem daunting, there are several strategies you can utilize to increase your chances of getting quick loan approval. These loans are open to the public, but there is an eligibility criteria that must be fulfilled by each applicant to access these loans.
Benefits of getting a Student Loan
A student loan offers numerous advantages, providing the essential financial support needed to cover the expenses related to higher education. Here are some of the key benefits:
- Covering the Cost of Studying and Living: A student loan can help cover part or all of your tuition fees. Additionally, it can also manage your living expenses such as meals, study materials, accommodation, and transportation, allowing you to focus on your studies without financial stress.
- Eliminating the Need for Part-Time Jobs: Many students take up part-time jobs to earn money and manage their expenses. With a student loan, you can avoid the need to work during your studies, enabling you to focus solely on academics, extracurricular activities, and internships.
- Enhancing Education and Growth Prospects: Student loans are invaluable for those aspiring to attend prestigious higher education institutions worldwide. By covering the costs of international studies, student loans improve future career prospects. A degree from a top foreign university or college can attract reputable employers and lead to better job opportunities and higher salary prospects.
Available Sources of Funding for International Students in the UK
There are several funding sources for international students as mentioned above, but let us take a closer look into those sources.
- Country of Origin
A student could be sponsored by his or her own country to undertake undergraduate or graduate studies in the UK through bilateral scholarships, partnerships, or exchange programs.
- International organizations
International students can become beneficiaries of education funding provided by international organizations through educational schemes or community response programs from organizations such as the United Nations that grant student loans to students across the world. Additional organizations that offer aid include:
- The Fullbright Commission
- AMIDEAST
- World Council of Churches
- Soros Foundation
- World Health Organization
Many of these financial aid provisions are highly competitive and you are required to be in your country of origin when you apply.
- Universities and schools in the UK
Generally, most schools in the UK support their international students by providing several opportunities and scholarships such as the Vice-Chancellor scholarship, assistant lecturer, or lab technician.
- Private organizations
Private institutions also reward prospective international students from other countries to undertake their graduate studies in the UK with funding support that covers all tuition fees.
In certain circumstances, UK companies may offer financial aid for students to study in the UK, with the expectation that they will work for the company after graduation. The best resources to find this type of financial aid are:
- International Scholarships Database
- International Education Financial Aid
- International Student Loans
- Family and friends
A student can study in the UK with financial sponsorship from family and friends from his or her home country.
- Student loans
One of the most common sources of funding for students for several decades has been student loans that come in handy as support to what is provided by either any of the above-mentioned sources if it is not available.
- Several scholarships
Other scholarship opportunities are open to international students in the UK to take advantage of when there is a need for extra funding.
Top International Student Loan Providers in the UK
CUJ Loans offers flexible and fast short-term loans to international students who meet its eligibility criteria, CUJ loans are typically designed for individuals with steady incomes, under the assumption that students have at least part-time employment. Available loan amounts range from £100 to £5,000, with interest rates between 9.3% and 49.9%. Repayment terms vary from three to thirty-six months. Once you apply, the loan is granted promptly.
The HSBC UK offers several unsecured personal loans to both graduate and undergrad international students. Loan amounts range from £3,000 to £40,000. These loans can cover for various study expenses such as supplies, tuition, and books. With a competitive annual interest rate ranging from 9.50% to 15.99%, HSBC offers set monthly repayment terms. The application process is straightforward, provided you meet the loan requirements.
Prodigy Finance offers a unique loan option for international students in the UK, that does not require a co-signers or collateral. To be eligible, borrowers must be enrolled in one of the many partner colleges that Prodigy Finance collaborates with such as Aberystwyth, Anglia Ruskin, Aston, Brunel, and Cardiff University.
The loan is available for programs in business, law, public policy, health, and STEM fields. The minimum loan amount is $15,000. Borrowers benefit from extended repayment terms and automatic deferment of payments while enrolled in classes. There are no application or prepayment fees; however, an administration fee of 4% applies to each loan.
Lendwise is a premier private lender that offers some of the best loan options for International Students in the UK. Lendwise is dedicated to providing education financing to support UK citizens and international students in funding their postgraduate studies, short courses, or professional certifications at prestigious UK universities. With attractive interest rates ranging from 5% to 10%, Lendwise offers loan amounts starting at £1,000, with repayment terms spanning from one month to ten years.
Most borrowers can defer repaying the principal for the first six months, and there are no penalties for early repayments or for not making payments while enrolled in full-time education. To be eligible for a Lendwise International Students Loan, you must be over eighteen, reside in the United Kingdom, and have a UK bank account.
Loan Eligibility Criteria for International Students in the UK
There is always a question that comes to mind and that is, “Can I get financial aid or a loan as an international student in the UK?”
The answer is a simple yes, because the UK offers a wide range of varying financial support for EU and Non-EU international students, the eligibility criteria for these funding options are based on several factors such as:
- The university or college
- Proof of enrollment or admission to study
- Financial statements such as proof of funding or low-income
- Previous education status
- Student status (part-time or full-time)
- Your country of origin
- Age limit
- Specific considerations such as children of Swiss nationals, stateless persons, migrant workers, health workers, refugee status, and humanitarian protection, and those that meet certain provisions, including ‘Calais leave’.
Preparing Your Application
Student loan providers all incorporate different requirements into their structure for granting loans to a student, but when applying, there are some common criteria or documents you have to provide. These include:
- Your letter of acceptance or Admission to study
- Official academic transcripts
- Passport or National Identification Card
- Proof of address
- Most recent bank statement
- Utility bill receipt
- Birth or death certificate(of sponsor)
Additionally, these applications can be made online with other detailed forms to fill out physically, which will inquire about more personal information. Many lenders request for a guarantor or co-signer to take full responsibility for any unforeseen situations that result in non-compliance or non-repayment of the granted loan. It is of essence to note that these can have legal ordeal, so you should fill them with honesty and caution.
How To Get A Quick Loan Approval
What you need to do
Applying for a student loan can be so stressful and time demanding but there are some proven strategies and useful tips to help you secure a student loan in the UK.
- Gather Necessary Documents
Having all the necessary documents for a loan application process is the first step to securing a loan from any loan provider. The necessary documents may vary by loan provider but you should always have these documents ready and handy at all times throughout the application process. Ensure to check your credit history and make any necessary improvements regularly. These include;
- Passport and visa
- Admission offer letter
- Proof of income
- Residency status
- Proof of identity
- Credit history (if available)
- Good Credit Score Co-signer
Showing that you can repay a loan even before it is granted is quite important, you can indicate your trust score by leveraging on a guarantor or a co-signer with a good financial reputation in the UK. This could be a
- A family member
- Personal or family friend
- Pastor or Imam
- Foster parents in the UK
- Other relatives.
- Craft a Strong Reason
When applying for an international student loan, your why is very important and plays a key role in assisting those reviewing your loan application to view your concerns and needs more emotionally. This should clearly explain the financial need and reason behind your application for the loan, the proposed repayment plan, your academic plans and career prospects, and how the loan is key to achieving those goals.
- Choose the Right Lender
Applying for loans is advisable but it can also be a daunting process especially if you need to apply to several lenders, it is just like starting another university admission process. Here are some tips to help you navigate this process:
- Carry out detailed research on available lenders, as you are doing this try to compare loan options, terms, interest rates, and specialization on whether they offer loans to students, citizens, or noncitizens.
- Check for reviews and testimonials from other international students
- Check for lenders that partner with universities to offer friendly loan terms to their students
- Choose a lender and complete the loan application
Other Tips for Quick Approval
Once you submit your application the next thing that comes to mind is the length of days it would take for the loan to get approved. There is no need to worry if you follow the following tips below in the process.
- Complete Applications Accurately
Double-check all information for accuracy to ensure all required fields are filled and documents are attached.
- Submit Early and Follow up
Apply well before the start of your academic term to avoid delays and establish contact with the lender to confirm receipt and processing of your application
- Be proactive in your response
Respond promptly to any additional information requests on time.
- Open a bank account in the UK
Entering the UK on student visa status opens the door to several opportunities for you, and one of such beyond studying a new country is the ability to use some of their services. Opening a bank account helps to communicate your economic and financial knowledge to a prospective lender. Ensure you maintain that account by regularly leaving a good balance and depositing money into that account.
- Build a relationship with your host institution
Your host institution could be your bank, university, or immediate community where you reside. Most times, people from this category can help you stand in as a co-signer to acquire a loan
Other costs you will encounter
Some additional costs may arise by taking out a student loan. These may, but not compulsorily include:
- Account creation charge
- Management or Service fee
- Processing or handling fee
- Late payment fee
There are varying terms used to describe fees. There you must carefully go through any privacy terms and policies while making your loan application before appending your signature both online or offline. It is also best to consult a legal practitioner who is familiar with student loans to assist you, if possible.
Although lenders are obligated not to hide anything, it can be easy to misunderstand such charges.
Common Mistakes International Students make that negatively impact their Loan Application Process
- Poor budgeting
Taking an educational loan is a big financial decision and must be carefully reviewed before going ahead. Most times, we all underestimate the actual cost of things, and students are fond of concentrating more on the direct costs such as travel, living, and tuition expenses.
However, there are other indirect expenses such as expenses for stationery, meals, books, utility bills, transportation, and other subscriptions that occasionally come up unplanned. It is not easy to accurately include these other related costs if it is your first time in the UK.
Some issues that arise from this error include, needing more money while studying, which can lead them to borrow more from other lenders and this adds to their financial burden and stress which ultimately affects their grades.
The way to avoid this is to:
- Take your time to accurately estimate the direct and indirect cost of living in the UK.
- Take a napkin and create a budget, your napkin could be a notebook or a sheet of paper that you can use to write down and allocate all costs appropriately.
- Speak with a loan advisor to help guide and direct you on what to do and how to go about getting a study loan in the UK.
- Have a backup plan for any other cost that may arise in the course of your study. Be conservative when making your financial plan, It is better to take what is more than enough than less.
- Ignoring potential scholarships
There are several scholarships open to international students with proof of admission to study at any university in the UK. But most students rarely take advantage of those open opportunities, sometimes due to the excitement of going to the UK, thinking of getting a menial job immediately they get there, and others which are not necessarily as easy as they make it seem coupled with academic activities, weather, and cultural differences, living and transportation challenges that may arise when they arrive in the UK.
- Signing the T&Cs without reading
One common mistake most international students make when taking out a loan for their studies is failing to carefully go through the terms and conditions. It is important to understand the repayment options, interest rates, penalties for late payment, and any additional costs attached to the loan, they are all stated clearly in the document.
It’s also crucial to take into account the whole cost of the education loan, which includes the borrowed capital, interest rate, and additional expenses. Before and after graduation, you must have a definite repayment plan in place that is commensurate with your anticipated post-graduation salary to help cover the total cost.
Others include;
- Low understanding of foreign exchange rates
- Not setting up automatic repayments
- Making late payments.
More Financing Options
If loans are not enough to fund your costs of tuition, travel expenses, and other academic incurred costs. There are a few other sources of funding you can turn to, these include:
- Scholarships and Grants
Research and apply for scholarships specifically for international students, and be on the lookout for grants from both governmental and non-governmental organizations. Scholarships are your best shot at getting funding to study in the UK as an international student. There are several open scholarships for international students, with varying requirements and country-specific criteria. Such as :
If your heart is set on studying in the UK, then exploring all funding options that are available to you will help increase your possibility of getting closer to achieving that goal of studying in the country and university you love.
- Work Opportunities
As an international student with a tier 4 visa, you are allowed to work up to 20 hours per week during a school term and more on vacation periods. You can explore available low and high-paying part-time jobs, Internships, and work placements related to your field of study. Some casual jobs include:
- Shelf packer
- Barber/Hairdresser
- Bricklayer
- Construction worker
- Retail worker
- Receptionist
- Waiter/bartender
But on vacation periods you can take on more demanding roles such as:
- Customer service representative
- Home lesson tutor
- Marketer
- Event Planner
- Amusement park staff
You can check out these sources Indeed, Reed, or Monster to apply for part-time or full-time work.
Conclusion
In summary, One of the first steps you should take when applying for a loan as an international student in the UK is to research the different financial institutions and lenders that offer loans to international students, comparing interest rates, conditions, and loan amounts offered by different lenders to find the best option for your financial needs.
To improve your chances of getting quick loan approval in the UK, having a good credit score, a credible co-signer, and all your financial documents and information is important. This includes providing proof of income, making regular payments via your credit card, utility bills as well as a letter of acceptance from your academic institution in the UK.
In addition to having a solid financial plan and credit history, it is important to demonstrate to lenders that you are honest and transparent about your financial situation, providing accurate information, and showing that you are committed to repaying the loan on time. Lenders also require a clear plan outlining how you intend to use the loan funds and how you plan to repay the loan once you have completed your studies.
Overall, getting quick loan approval as an international student in the UK requires thorough research, careful planning, and a proactive approach. By following these steps and taking the necessary precautions, you can increase your chances of securing a loan to fund your studies abroad and make your academic dreams a reality.