Through his mother's family, he was descended from an illegitimate royal line of King Charles II. Loder was educated at Eton College, where he excelled in history and languages, with a particular interest in drama. Although originally intending to go to Trinity College, Cambridge, with the outbreak of the First World War, Loder was instead commissioned into the 4th Battalion of the Royal Sussex Regiment, and later joined the Intelligence Corps, seeing service throughout the war in Gallipoli, Egypt and Palestine. For his services, he was Mentioned in Despatches, and left the British Army in 1919 with the rank of captain.