Loans for migrants and international students

Moving to a different country can be exciting, but it’s not always easy for people who aren't UK citizens to get approved for a loan. Below, we weigh up your best options for borrowing money.

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Loans for international students

In the UK, local students can apply for government-funded loans to cover the cost of their tuition. If you’re an international student, you won’t be eligible for this type of student loan, but you’ll still have a couple of finance options to choose from. This includes personal loans, loans from specialised lenders like Future Finance, and also scholarships, grants and other funds.

Can international students get loans in the UK?

Yes, you can still get a personal or certain educational loans as an international student in the UK, but will not be eligible for government-funded loans. This means you’ll be able to apply for an unsecured personal loan, provided you’re currently a UK resident and have a UK bank account, and also meet a lender’s other requirements.

How much do international students pay for university in the UK?

This will depend on things like the course you’re studying, the university you’re enrolled at, as well as other costs such as accommodation. While student fees for local and EU students are standardised across the UK, this is not the case for international students, and you’re likely to end up paying at least £10,000 per year, though this amount may be significantly higher.

Can I get a loan as a non-UK citizen?

If you’re a migrant worker who has just moved to the UK, or are studying here as an international student, you may not have the same range of financial options as UK citizens. However, you should still be eligible for a range of loans provided you’re a resident with a UK bank account.

Can I get car finance as a new UK resident?

If you’ve just moved to the UK, you could be eligible for a car loan or car finance if you have a fixed UK address and bank account, and meet the lender’s additional lending criteria. This means you’re likely to also need a regular source of income, and able to demonstrate that you’ll be staying in the UK for an extended period.

What are my other loan options as a non-UK citizen?

Below are some of the options for borrowing money that you’re likely to be approved for, even if you’re not a UK citizen. Make sure to compare all of these options to find the one that represents the best deal for you:

  • Government support

    If you’re an EU resident who has moved to the UK to study, you may be eligible for a government loan to support you during your studies. EU students are eligible for loans to cover their undergraduate or Master’s tuition fees if they’ve resided in the European Economic Area for at least three years prior to the start date of their course. EU nationals who have lived in the UK for at least five years will also be eligible for these loans.

  • Hardship funds

    Many educational authorities in the UK offer students the ability to take a loan from their hardship fund. These rates are likely to be more affordable than many of the other options on this list. As such, it’s advisable to check whether your college or university provides this before exploring other avenues.

  • Student overdrafts or credit cards

    Many student bank accounts offer a large overdraft which remains interest-free for the duration of your education. The interest tends to rocket a year or so after you’ve graduated, though, so it’s a good idea to pay off your debt as soon as possible. There are lots of student credit cards, and these offer a lengthy 0% introductory deal, too. Again, it’s smart to pay off your balance before this ends to avoid huge interest charges.

  • Credit-builder credit cards

    These cards are aimed at applicants with a poor or limited credit rating, which you’re likely to have if you’ve 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 chance to build your credit rating with each timely payment. Both students and non-students are eligible to apply for credit builder cards.

  • Short-term or payday loans

    There are some personal loan companies which 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 loan companies offer short-term loans, typically up to 30 days, but these have eye-wateringly high interest rates attached so should be considered as a last resort.

Will I be eligible for a loan?

Nearly everyone will be able to get some sort of loan, but your choice of lender may be more limited if you’re not a UK citizen. If you’re a migrant worker or student, some lenders won’t be willing to offer you a loan, and others will only offer them under certain circumstances.

However, if you can provide evidence of a permanent address, have a UK bank account and proof of a visa, you’ll likely be able to get a loan, even if you’re a non-UK resident.

If you’re looking for a loan, it’s important to check a lender’s minimum eligibility criteria before applying. This document will usually have details about the lender’s policy for non-UK applicants.

The application process will be the same as for UK citizens, although you may need to provide more paperwork, and may be offered a different rate to the one that is advertised.

A bigger obstacle to your eligibility with a traditional lender is likely to be a poor credit score, although you may able to get around this using some of the alternative options listed above.

How to build a good credit score

If you want to improve your chances of getting a loan as a non-UK citizen, it’s in your best interest to start taking steps to build your credit score.

Here are some simple ways to boost your credit rating, and your chances of being approved for a loan at a better rate in the future.

  • Register to vote in the UK at www.gov.uk/registertovote (if you’re an EU or qualifying Commonwealth citizen resident in the UK, or become a UK citizen)
  • Check and amend any mistakes in your credit record
  • Set up a few direct debits and ensure they’re paid on time
  • Make credit card purchases and pay off your balance in full each month
  • Refrain from making multiple credit applications in a short amount of time

Loans with no credit history

Nowadays, there are a number of online lenders that approve loans based on your Open Banking data, as opposed to traditional credit history. Lenders such as Koyo offer personal loans that are specifically aimed at migrants, students and any other customers that have not had a chance to develop their UK credit history.

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