If you are an international student looking to study in Uk but need additional money in order to afford this great adventure, student loans are an option for you to pay for your studies in the United Kingdom. However, it’s important to get familiar with how student loans work before applying.
On this page, we will take you through what you need to know about student loans so that you can be a responsible borrower. Read on!
Overview
Each year, the UK welcomes so many international students from all over the world. They come to Uk looking to pursue their studies in one of the top study destinations in the world.
While they are here they can explore the country – with incredible, vibrant, bustling cities alongside vast expanses of nature and wildlife.
Of course, there is more to it than that, but the good news is that at least there are options available for international student loans.
What is a personal loan?
A personal loan is money given to a borrower which they can use for any purpose they would like. Therefore, the funds do not need to go directly into paying tuition, but many other things: you could cover living/food expenses or personal purchases.
What are International Student Loans?
International Student Loans are private loans provided by specialist education loan providers. They are available for international students who are studying at approved universities in the UK.
There are a growing number of universities across the UK where students may apply for a loan without a co-signer.
The majority of financial aid options at UK universities are aimed at Uk resident students, meaning international students may not be able to access them.
Using your own savings and help from your family, plus some financial aid like grants or scholarships (which do not have to be paid back), you might only be able to cover some of the cost of studying in the UK. This is why many students rely on a loan to cover the remaining costs.
You should only apply for these loans after exhausting all scholarships, personal funds, and other options first.
What can Uk Student Loans cover?
This will cover your tuition fees, as well as your living costs if you’re studying an undergraduate course. See How To Get Startup Loan For Business with No Money.
Cosigners for International Student Loans
Since many international students do not have a previous credit history in the Uk, they will find that most lenders will require a cosigner for international student loans to be approved.
A cosigner assures the lender that if the borrower fails to pay back the loan, the cosigner will then be responsible for repaying the loan.
Most of the time, the cosigner is required to be a Uk citizen or permanent resident which is difficult for international students to find. However, international student loans such as Stilt and SoFi do not require a cosigner.
Who is eligible to apply for an International Student Loan in Uk
If you’re an international student, you won’t be eligible for a loan from the UK government like local students.
However, there are other educational loans and finance options that you may be able to apply for. In some cases, you may be able to apply for a loan in your home country to use for study in the UK, whether this is from a particular scheme or even your local bank.
Individual countries will have different schemes in place, so It’s important to research all the available options and find a reputable lender that will offer you a package that meets your needs.
What loan options are available to me as a new UK student?
Here are some of the borrowing options you might want to consider. Make sure to compare all of these options to find the one that represents the best deal for you:
Refugee integration loan
If you are over 18 years old and you are either a refugee or have humanitarian protection or you’re a dependant of a refugee or someone with humanitarian protection, you can apply for the refugee integration loan.
Through the loan, you can borrow between £100 and £500 (or £100 and £780 if you apply with a partner) to pay for a housing deposit or rent, household items, household bills, or education and training for work.
Integration loans are interest-free and you only pay back what you borrow, but you must make regular payments.
Loans from specialist lenders
The UK lending market has so many innovative brands finding new ways to say “yes” to responsible borrowers.
This might involve connecting your account through open banking so that would-be lenders have more than just a credit score to go on.
Pretty much all decent lenders in the UK now offer eligibility checking services, so you can find out before you apply whether or not your application would be likely to succeed.
These are fantastic tools, the reason being that they stop you from damaging your credit score further by making unnecessary applications.
Comparison sites offer eligibility checkers that can check your chances of approval for multiple loans in a single go! which saves time and hassle. See How To Get a Startup Business Loan With No Credit.
Credit-builder credit cards
These cards focus on applicants with a poor or limited credit rating, which you are likely to have if you have just entered the UK.
These have higher interest rates than traditional credit cards have and are unlikely to include 0% introductory deals, but they do offer you the opportunity to build your credit rating with each timely payment. Both students and non-students are qualified to apply for credit builder cards.
Short term loans
There are some personal loan companies that will approve migrant applicants or those with a low credit score, although the rates offered might be higher than those a more creditworthy applicant might be offered.
Payday-style loan companies offer short-term loans, typically over terms from 1 to 6 months, with relatively lenient application criteria.
However, these have eye-wateringly high interest rates attached so should be considered as an absolute last resort.
How do I get a loan as a new UK resident?
When deciding whether to let you borrow, lenders will run a credit check to assess your credit history. They do this to establish how reliable you are as a borrower. The higher your credit score, the more likely you are to get accepted.
For a start, it can be worth contacting your old bank to see if it has any branches in the UK. If it does, you may find it easier to get a loan through that particular bank as it will already have your financial record.
If your bank does not have any UK branches, it can still be worth getting in touch to ask for a reference that you can use when you apply for a loan elsewhere.
Conclusion
As emphasized in this article before now, there are options available for you but it might be more difficult to get a loan if you have only recently moved to the United Kingdom.
To increase your chances of success, it is crucial to take steps to get your credit score up to scratch and also do your research to see which type of loan you are more eligible to apply for.
