February 7, 2023 / By Top Vouchers Code

International Student Loans in the UK

Description: The Ultimate Guide to International Student Loans in the UK. Available loans, how to get them, and how the repayment works.

Student loans for international students in the UK

The United Kingdom is one of the most desired educational destinations. But studying here comes at a decent price. The tuition, rent, cost of living, and related disbursements tend to pile up. 

For many international students, getting financial help is the only chance to enroll in UK educational facilities. In this guide, you’ll find all about the available options, how one can get them, and how the repayment system works. 

Student loans: What you need to know?

Previously, EU residents had the same opportunities as UK students in terms of government-funded loans. However, since Brexit, such programs are no longer available. Those who have enrolled and acquired government-provided loans before the study year 2021/2022 will keep them. But if you enrolled or are planning to do so after that, this will not apply. 

Currently, student loans offered by the UK government are available only for domestic students. If you are a UK resident and have a UK bank account, you can also apply for it. 

There are some exceptions. For instance, if you are a migrant worker living in the UK, you can get accepted for a loan. For that, one will need a permanent address, a UK bank account, about 3 years of UK address history, and a valid visa. 

What types of international student loans are there?

To put it simply, there are two types of loans – from the government and other lenders. As an international student, you are probably not going to get a government loan. 

Other lenders include: 

• Universities (some have their own student loan programs); 
• Banks;
• Private/Special lenders (like Koyo, Future Finance, or Drafty). 

Besides loans, there are other financial support opportunities for international students. These are:

• Refugee integration loans (they will not cover all costs but it is interest-free); 
• Short-term loans from personal loan companies; 
• Credit-builder credit cards that both students and non-students can apply to for building a score; 
• Support from your government (for instance, the US has a Study Abroad Loan program); 
• Scholarships and grants (there are many available for international students); 
• Hardship Funds provided by some educational institutions; 
• Student overdrafts are offered by banks at no interest fee during education. Sometimes international students might not be eligible, but it is important to check with a bank; 
• Student credit cards are provided by many banks. The trick is that typically you need to be a student already to apply for such a card. Usually, the card has 55 days interest-free to pay for your needs. 

It is important to note, that the interest rate of a private or special lender is usually higher than the one of the government. But for many international learners, it can be the only available option. So consider all advantages and disadvantages before sealing the deal. 

It is always wise to conduct research on all options, use eligibility checkers, and find the most affordable options. Read through the eligibility criteria before applying and be aware of your credit score. If it is far from ideal, it might be reasonable to improve it before applying for a loan. 

Do not make several applications in a short period. And it is better not to apply at all if you are not confident in your approval chances as rejection can damage your score.

How to get student loans in the United Kingdom?

The main deciding factor for lenders is credit history. The better your score is, the higher the chances to get approval. If you have been living in the UK for 3 and more years, this is enough history to apply for a student loan. 

However, if this is not relevant to you, there might be some difficulties. Credit history is not transferred across countries. Here is what you can do in such a situation

• Contact your home bank and verify whether they have branches in the UK. If so, apply to those institutions as they will have your records; 
• You can also ask for a reference from your home bank; 
• Consider getting a loan from online lenders that do not require your financial history. They base the decision on your open banking transaction information. Some of them offer loans specifically to migrants and international students (Koyo is an example). 

If you are a migrant, you can also improve your score with several steps, namely:

• Register to vote and get on the electoral roll if applicable; 
• Get a regular job as international student with a steady income;
• Open a UK bank account; 
• Get your name on utility bills and pay them on time; 
• Leave from 3 to 6 months between loan applications. 

Regularly check your credit score and as soon as it is satisfactory, apply to a bank or a special lender. 

Student loan repayments: what you need to know about this?

The repayment system in the UK is pretty comfortable. You only get to repay after graduation and finding a job. After you start to earn a certain amount, the appropriate sum will be automatically withdrawn from your salary. 

The current repayment threshold is about £2,274 a month.  Only after you are earning as much, the repayment starts. So if you are volunteering, unemployed, or travelling – you won’t be eligible for withdrawals. 

If you are earning above the threshold, your repayment will be 9% of the sum above it. So if you earn £3,000 before tax, it is £726 over. 9% equals £65.34, which will be automatically taken from your salary. 

Those who move abroad also need to repay the loan but the process won’t be automatic. In such a case, a student needs to contact the student loan company and sort it out manually. You need to inform them of your earnings with evidence and get a new repayment schedule.