FAQs on Top-up Education Loan

FAQs on Top-up Education Loan

Top-up education loans are an extended loan option for supporting additional study expenses abroad. Most banks provide additional funding beyond the primary education loan. You can apply for a top-up education loan if you have an existing education loan for which you haven’t started the repayment. Usually, top-up education loans are availed in case the students pursue further education after completing the degree course or in case the university increases the fee or any other genuine reason. Check some of the common FAQs on top-up education loans for study abroad.

What is a top-up education loan?

An education loan top-up is an extended loan that can be taken by students who have already availed an education loan for their studies. A top-up education loan is provided based on the initial loan amount and can be used to cover expenses that were previously not decided. For example, you were initially eligible for a loan of INR 20 lakhs but took only INR 10 lakhs. Further, you decided to pursue another course for which you need more amount. You can apply for a top-up loan of INR 10 lakh which will be sanctioned based on your existing loan. 

What are the eligibility criteria for loan top-up?

To be eligible for a top-up education loan, students must have an existing education loan and a good credit score. Lenders often consider academic performance and the reputation of the chosen institution as well. The eligibility criteria are pre-determined and verified as you have already got a certain loan amount sanctioned at the time of getting the initial loan. 

Also Read: Planning to study abroad with education loan and a guaranteed top-up? Check this blog on Comparing top-up education loans of different banks in India

What is the maximum amount for a top-up education loan?

The maximum amount for a top-up loan is the difference between the total eligible loan amount and the initial loan amount availed. For example, at the time of applying for the first loan, the bank sanctioned INR 50 lakhs but you only required INR 30 lakhs. After 3 years, you decide to pursue another 2-year degree program and want to get more loans. You can ask for INR 20 lakhs as this amount is the difference between an existing loan and the total amount sanctioned. 

How to apply for a top-up education loan?

Top-up education loans for specialised programs are easily available and can be availed without any hassle. If you require additional funds and want to get a top-up loan, contact your bank for the same. Explain to the bank the purpose for taking the loan and the amount required. Submit the relevant documents demanded by the bank. After verification, the bank will sanction and disburse the loan amount. 

Is collateral required for a top-up loan?

Collateral requirements for top-up loans depend on the lending institution. Some lenders may not ask for additional collateral if the existing loan is adequately secured, while others may request additional security. Contact your bank or lender for detailed information on the requirement of collateral for a top-up education loan. 

What is the repayment process of a top-up education loan?

Repayment for a top-up education loan usually begins after the completion of the course or a specified moratorium period. The repayment tenure and instalment amounts depend on the terms agreed upon with the lending institution or the bank. Usually, when you complete the entire course, the bank starts charging interest from the date of the beginning of the moratorium period. 

What is the interest rate on a Top-Up Education Loan?

Interest rates for top-up education loans can vary among lenders. Generally, these rates are slightly higher than those of the primary education loan, but they are still competitive compared to other financing options. The total loan amount i.e. initial loan and the top-up loan will be provided based on the floating rate of interest in most cases. Check the interest rate and schedule of charges with your bank. 

Can I get a top-up education loan for pursuing postgraduate studies?

Yes. If you decide to pursue a postgraduate course after finishing your graduate studies, you can apply for a top-up loan. However, the repayment of the loan shall not be started at the time of applying for the top-up loan. 

Also Read: Interest rate increase by bank for education loan? Check here all the details on how to refinance education loan and when should you consider it

Is there any processing fee for a top-up education loan?

Banks or financial institutions may charge a certain amount as a processing fee for the top-up education loan. It will vary depending on the bank or the lender. Go through all kinds of fees before applying for the loan. 

Is a co-applicant required for education loan top-up?

If there is a co-applicant involved in the existing education loan, the same will be considered for the top-up education loan. You don’t need to submit fresh documents as the bank already has them and so the loan will also be processed quickly. 

Top-up education loans are a valuable resource for Indian students pursuing higher education abroad. By understanding the major factors of these loans, students can make well-informed decisions. Always consult with financial advisors and thoroughly research lending institutions to secure the best possible terms for a top-up education loan.

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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About Shekhar Suman

Shekhar is a versatile writer with a passion for sharing knowledge and creativity. With expertise in crafting informative blogs on study abroad and finance, Shekhar helps readers navigate the complexities of education and financial planning. Most of his writings blend the practicality of finance and the beauty of language, making a meaningful impact in both spheres. Beyond his professional pursuits, he finds solace in the writing Shayari.

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