The UK is an academic hub that is home to some of the most renowned colleges and universities of the world. While every student dream to get through University of Oxford or Cambridge or Imperial College, grades become an important factor. For some, despite adequate scores, financial stringencies play spoilsport. And if you are an international student crossing an ocean to settle in the UK, sustaining education alongside lodging can be even more expensive.
Now, before you let your purse strings dampen your spirit, remember there is always a way out. You can now apply for a student loan to afford the exorbitant tuition fees and boarding rents in the UK. However, it isn’t as easy as it looks like. On that note, let us check out the essentials.
A-Z of Applying for Student Loan in the UK?
Before you apply for a student loan in the UK, you have to consider the loan structure and the guidelines of the institution you want to apply in. Moreover, the application procedure will vary as per your nationality and level of education.
If you are an overseas student, you will also have to obtain a visa to study in the UK. Alongside, you must research the cost of living as per your choice of accommodation (dorm, homestay or rented apartment).
Let us now delve into the full-fledged process of obtaining student loans for all types of applicants.
For resident students from the UK
If you are a resident of England, you can apply online for a loan from Student Finance England. Here is what you have to do:
- Step 1: Set up an online account on the portal of Student Finance England.
- Step 2: Log in to your account and complete the online application.
- Step 3: Include the household income of your family, which your guardian will have to confirm. If you are the sole bread earner, then you will have to submit your salary slip.
- Step 4: Next up, you will have to send in proof of your identity, if needed.
If you want to apply offline, you can get the required forms using form finder and download the hard copy and submit it. You can also call Student Finance England to know the further procedure for applying for a loan or physically visit the office premises.
For continuing students studying in the UK
If you are moving to the next year of a course you are pursuing in the UK or repeating a year of the same course, you will fall under the category of continuing students. Even if you are transferring to a new course from an old course, you can use your existing student loan login ID with Student Finance England to reapply for another student loan.
However, the process might be a long one if you are returning to the course that you had been pursuing after taking time out for personal reasons. Personal reasons would include an ailment, caring for someone, death of someone close or being pregnant. In that case, apart from applying for a loan via your student finance account, you will have to submit a letter that explains why you had to suspend your studies.
The letter must include your student finance reference number and an explanation of your situation along with supporting evidence. The supporting proof can be any one of the following:
- a letter from the doctor treating you
- a letter from the social services you were a part of
- a letter from your university or college
- copies of birth certificate (in case you were pregnant) or death certificate (in case of someone’s demise)
You can send the letter by post or via your online account along with the evidence to Student Finance England. SFE usually replies within eight weeks with a letter that states how much loan you are liable to get.
For new EU students
If you are sailing into the UK from any other countries in the EU or other continents, then here is what you have to do to apply for a student loan UK.
- Download an application pack.
- Use the form finder to understand which forms you will be needing.
- Send in your proof of identity, like passport details, birth certificate, proof of nationality, etc.
After you have met all the requirements, and if your grades are up to the mark, you will get a letter from Student Finance England confirming how much loan you’ll get.
Now, after you have received the loan, the ordeal doesn’t end here. Usually, the interest structures and repayment conditions of student loans tend to be complicated. To simplify the details, we have encapsulated all the basics that you need to know. Read on!
All about Student Loan Interest Rates & Repayment in the UK
When it comes to student loan repayment, the process is very different from other kinds of financial aids. Unlike other loans that are based on how much you have borrowed, you will have to repay a student loan based on how much you earn after you have acquired a degree. Now, there are two plans for repayment.
You will have to repay 9% of your income above the repayment threshold. If you leave your course, then you will have to repay when your income surpasses the repayment threshold. At present, the limit for a student loan in the UK is £26,575 a year, or £2,214 a month. You can even get a weekly loan of £511.
Now, let us understand how the repayment works along with the student loan interest rates UK with an example. Say, you earn £2,250 a month excluding tax deductions. In that case, you cross the monthly threshold by (£2,250 – £2,214) £36. Now, 9% of £36 is £3. So, that is how much you have to pay.
For this plan, you will have to pay interest of 1.1%. Find out how the interest is calculated here.
As mentioned earlier, the weekly and monthly thresholds are £511 and £2,214 respectively, before tax and other deductions. This threshold is also subject to change on 6th April every year. As per this plan, if your weekly income is £600, it exceeds the threshold of £511 by £89 (£600 – £511 = £89). In that case, you will have to pay back 9% of £89, which is £8, in that particular week.
The student loan interest rate on Plan 2 is 5.6%. Now, this may differ with time since the rate includes the Retail Price Index (RPI) along with a mandatory of 3%. Currently, the RPI is 2.6%. Ergo, the interest rate is (2.6 + 3) 5.6%. Again, the 3% interest rate would also depend on your income in the prevalent tax year.
We know this can be hard to wrap around your head. If you think all this calculation is too much to take, you can use this student loan repayment calculator to get the breakup in an instant.
How to Student Loan Company operate?
If you are a resident of the UK, you will get your student loan from the Student Loans Company and its Welsh and Scottish subsidiaries. The Student Loan Company is an organisation that is government-run and responsible for financing students’ educational costs. If you do not count in bank overdrafts (which would be a massive mistake, not to mention), you cannot get private loans in the UK.
However, if you aren’t a UK resident, or belong to any of the countries in the EU, you cannot apply for your student loan through a local authority to the Student Loans Company. In that case, you will have to rely on applying for student loans in private and public organisations relevant to the country you belong to.
Bookmark this post for a quick guide to applying for a student loan in the UK. The process can be hectic, but do not try to get out of it so that you do not have to suffer financially later on while you are studying in a college in the UK.
And if you are too busy to work on your assignments in the meantime, do not hesitate to take help from online academic writers to secure your grades (which will matter when you take a loan).
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