A top-up education loan is an additional loan availed by students who already have an existing loan. It is taken by students when additional loan requirements arise, for example, when a student has completed his undergraduate course and wants to take an additional loan to pursue postgraduation or any other higher degree. It can also be taken in some other cases like when the cost of student accommodation increases, etc. In such a scenario, the student can approach his bank and request a top-up loan.
A top-up loan is usually taken from the same bank and its purpose is to make it easier for students to avail of additional loan amounts. In other words, a student taking a top-up loan will not have to look for a new lender and go through the entire process of the loan application again. Applying for a top-up education loan is comparatively easier than applying for a new loan from a new lender. In this blog, we are going to look at different banks providing top-up education loans in India. So, let’s dive in!
Table of contents
Top-up Education Loan From SBI Bank
SBI Bank provides the ‘SBI Global Ed-Vantage Scheme’ for students planning to study abroad. If you previously took a loan under this scheme or any other scheme of the SBI Bank then you can avail a top-up education loan from the SBI Bank. Below are listed some of the major features of SBI Bank’s education loan scheme-
- Repayment Tenure: The bank usually provides flexible repayment tenure of up to 15 years. However, when a candidate approaches the bank for a top-up loan, his previous repayment tenure will be adjusted keeping in view his new loan requirements. The bank will ask you about your new loan requirement and the reason for it. After understanding your specific case you will be told a new repayment period. It should be noted that this will only be a single repayment period and not two different repayments. The bank will simply extend your repayment period due to your additional loan requirements.
- EMIs: The bank provides the option to pay EMIs through net banking, mobile banking, and cheques. It should be noted that your previous loan repayment should not have started for you to be eligible for a top-up loan. When you take a top-up loan, your monthly EMIs are also adjusted accordingly.
- Quantum of Finance: The minimum quantum of finance provided by the bank is INR 7.5 Lakhs and the maximum quantum of finance is INR 1.5 crores. The loan amount that you can get under a top-up education loan will be calculated by deducting the previous loan amount taken from the bank from the total eligible amount.
- Interest Rate: The scheme attracts an effective floating interest rate of 11.5%. A 0.50% concession is available for students availing of SBI Rinn Raksha or any other existing life policy assigned in favour of SBI Bank. Furthermore, a 0.50% concession is also available for female students.
If you want to understand the complete process of student loan consolidation, then you must refer to this blog: Understanding Student Loan Consolidation: A Comprehensive Guide
Top-up Education Loan From HDFC Bank
The HDFC Bank provides top-up education loans both with collateral and without collateral. Below are some of the major features of HDFC Bank’s top-up education loan scheme-
- Loan Amount: Maximum loan amount of up to INR 1.5 crores is available with collateral and up to INR 50 Lakhs without collateral for select institutes. As stated above, the same process will be followed for deciding the actual loan amount for a top-up education loan. And, you will have to contact your bank to know about the specific loan amount that you will get.
- Repayment Tenure: The bank provides flexible repayment tenure of up to 15 years on the first loan and extends the repayment period for people taking a top-up education loan.
- EMIs: The bank provides pocket-friendly EMI repayment options and your loan EMIs will slightly change when you opt for a top-up loan.
- Tax Benefit: You can save on taxes with a rebate on the interest you pay on an education loan under Section 80-E of the Income Tax Act, 1961.
- Interest Rate: The interest rate charged by the bank starts from 9.50% p.a.
Top-up Education Loan From Kotak Mahindra Bank
Kotak Mahindra Bank is another major bank providing top-up education loans in India and below are some of its major features-
- Student Eligibility: If you have taken an education loan from Kotak Mahindra Bank then you are also eligible to apply for a top-up education loan. To know more about specific eligibility, you’ll have to contact a bank’s representative and you will be told whether you are eligible for a top-up loan or not. The bank will check various things like what was your previous loan amount and repayment tenure, whether your repayment has started or not, and other such details.
- Interest Rate: The maximum interest rate could be up to 16%.
Top-up Education Loan From Axis Bank
If you have already taken an education loan from the Axis Bank then you are eligible for a top-up loan, and below are the major features of the same-
- Repayment Tenure: The bank provides flexible repayment tenure of up to 15 years as most other banks and your previous repayment period will be extended. The extended repayment period is decided by calculating the total loan amount taken by you (previous loan amount + loan amount taken under top-up education loan).
- Interest Rate: The effective interest rate ranges from 13.70% to 15.20%.
Comparing Different Banks For Top-up Education Loans
Here is a table that contains details of top-up education loans offered by different banks-
| Name of the Bank | Maximum Loan Amount | Repayment Tenure | Interest Rate |
| SBI Bank | INR 1.5 crores. | Up to 15 years. | An effective floating interest rate of 11.50%. |
| HDFC Bank | INR 1.5 crores. | Up to 15 years. | Starting from 9.50% p.a. |
| Kotak Mahindra Bank | INR 20 Lakhs | NA | Maximum up to 16%. |
| Axis Bank | NA | Up to 15 years. | Effective interest rates range from 13.70% – 15.20%. |
Note: 1. It must be noted that sanctioning an additional top-up loan also depends on the maximum loan eligibility. The loan amount that you are eligible for under the top-up education loan will be calculated after taking into consideration your previous loan amount. For instance, if the maximum loan amount provided by Kotak Mahindra Bank is INR 20 Lakhs, and you have already taken INR 15 Lakhs in your previous education loan, then you are only eligible to avail of INR 5 Lakhs for a top-up education loan.
If you want to know the process of customisation of a top-up education loan, then this blog will help you- How To Customise Top-up Education Loan As Per Your Needs
FAQs
A top-up education loan is an additional loan taken on the existing loan by a student planning to pursue further education. For example, if you took an education loan for an undergraduate course and want to take a loan to pursue post-graduate studies, then this loan will be called a top-up education loan.
Yes, if you have already taken an education loan, and have finished your graduate studies with top grades, and now wish to pursue further education, then you are eligible for a top-up education loan.
A lot of banks in India provide top-up education loans at competitive rates. however, you should take a top-up education loan from the same bank from which you took your previous education loan. Doing this will save you from a cumbersome documentation process and bank verification which is usually the case for taking a new loan from a lender.
This was all about comparing top-up education loans from different banks in India. To know more about the loan application process, the best bank accounts for students, forex and banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
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