Education Loan

The question you are asking yourself right now is, do I need an education loan for the UK? Well, given the amount of expenses involved in studying and living in the UK, you most likely have to. But, whether you should take an education loan for the UK is a decision that you have to make for yourself.

However, if you do not have about INR 95,00,000 saved up which you can use on anything, then you simply cannot cover for any eventuality in the UK. In that case, you have to turn around to an education loan.

And let’s face it, taking education loan for the UK in India is like slow poison. Because of the high interest rates on loans, you end up paying almost 1.6 times the amount you borrow. Now, ain’t that horrendous?!

But, that is the truth.

Are educational loans beneficial?

It depends on what kind of education loan it is, and how much interest it charges. Most likely, for loans above INR 15,00,000 interest could vary between 10 % – 13% depending on the bank that you choose and the type of relationship you have with it.

You can compare some educational loans and their interest rates here.

What was my experience?

I took an educational loan of about INR 10,00,000 from Corporation Bank. They are charging a compounding interest rate of 12.5%. The EMI is about INR 26,000.

My overall experience was unsatisfactory. The process to get the loan approved is slow, and requires good bureaucratic skills. Additionally, I did not get any living expenses. So, for any living expenses, I had to either rely on my mother or had to pay them by myself. Although, since the loan, and some of my mother’s savings covered the accommodation fees. This helped me survive in an affordably premium student accommodation in East London.

The EMI is alright for me, however, I have no intention of dragging it to my death bed.

What do I think of the education loan?

I simply detest the idea itself. Paying the loan back at an interest rate of 12.5% is criminal.

However, I should not deter from admitting that it did support me through my education in the UK. And out of all the experiences and knowledge that I gained, some of the credit does go to that loan.

Should you take an educational loan?

Well, you have to answer that question for yourself. Do your research about the courses in the UK, familiarise yourself with the life you would be living if you make the move. The one thing that you should focus on is securing a job. If you can get a job after doing a course in the UK, and if that job pays you well, then what is the harm? Earning in GBP would mean you’d pay the loan back in less than 5 years.

Additionally, I was in a situation where if I did not get a job, there was no way I could stay in the UK. However, if you move to the UK now, you can make use of the 2-year PSW scheme. It simply means that you can stay in the UK for 2 years after completing your course.

It means that even if you take an education loan, you can still work part-time int he UK after your course finishes. While you work part-time you can earn enough money to sustain yourself and pay off at-least about INR 30,000 against the EMI.

Moreover, working part-time would mean you have enough time to apply for proper full-time jobs.

Therefore, taking an educational loan would not hurt as bad.