Education loan top-up is a system where the bank provides an additional loan if you have an ongoing education loan. The bank also extends the moratorium so that the burden of repayment can’t impact your studies. The education loan repayment will start after completing the studies and the entire loan amount is combined and EMI is decided accordingly. Let’s understand how a top-up loan is helpful for specialised programs.
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What is an Education Loan Top-up?
Aman took an education loan of INR 10 lakhs to study B.Tech in Germany. The bank initially offered 15 lakhs but he took only the required amount. When he completed his course, he decided to pursue M.Tech from the same university. He then asked his bank for some more funds to pay the fee for the postgraduate program. The bank agreed and gave an additional loan of INR 5 lakhs. This additional amount of loan apart from the existing loan is called a top-up loan. One more factor to be noted here is that the upper limit for a top-up education loan is the eligible amount minus the loan amount initially taken.
Also Read: Are you planning to study in the USA? Check this blog on Indian Banks providing Education Loans to Study in the USA
Education Loan Top-up for Specialised Programs
Specialised programs like engineering, medicine, computer science etc are the most preferred courses by Indian students who want to study abroad. However, these courses are a bit costly, especially in countries like the UK and the USA and that’s why students take education loans.
- Many students plan to pursue postgraduate programs soon after completing their graduation for which more funds are required.
- The student can approach the same bank for the top-up loan from which the loan was taken initially.
- The loan will be approved quickly as the bank already has your documents and other required details.
- The moratorium period will be restructured and aligned as per the top-up loan amount.
Eligibility Criteria for Top-up Loans for Specialised Programs
Banks have their own set of eligibility criteria which you must fulfil to get an education loan top-up. In most cases, the lender is the same bank who gave the initial loan and so they have all your details. However, there are still some norms and procedures of the bank which is set on the direction of RBI. Check some of the eligibility criteria for top-up education loans:
- The student must have secured admission to the university in the course for which the loan is required.
- The repayment shall not have started at the time of applying for the loan, neither the EMI payment nor the interest payment.
- The initial loan must have been taken from the same bank as the bank will align the repayment structure considering the total loan amount.
- If you have availed the education loan refinancing then the existing lender or bank will be approached for a top-up loan, and not the previous one.
Also Read: Are you worried about loan repayment? Know How to Pay off Education Loans
Top Banks Providing Top-Up Facilities on Education Loans
In India, most of the banks provide education loan top-up to the students who want to pursue further education. Some of the major leaders with strong track records are SBI with the Global Ed-vantage Scheme, Bank of Baroda with the Baroda Scholar Loan Scheme, Punjab National Bank with the PNB Udaan Scheme etc. Check the details below:
| Name of the Bank | Scheme for Education Loan |
| State Bank of India | Global Ed-vantage Scheme |
| Bank of Baroda | Baroda Scholar |
| Punjab National Bank | PNB Udaan |
| Bank of India | BOI Star Loan |
| Union Bank | Union Education Premier Abroad |
Note: Top-up education loan amount is subject to the maximum limit of the loan decided initially. For example, if you were eligible for an amount of 50 lakhs but you took only 35 lakhs then your maximum top-up loan amount will be INR 15 lakhs.
What if the Repayment has Started?
In case the repayment has started the banks may deny an education loan top-up. If the bank approves the loan after repayment has started then it will be called a restructured loan. Also, this may affect your credit score as restructuring on loans is not a positive sign in your credit history.
- If you have started the repayment and the bank approves your second loan based on your debt-to-income ratio, you won’t have the option to get a top-up loan.
- Additional loan after repayment shall be considered as a fresh loan and the entire process of the loan application will be done.
- There are some banks where you can get an offer for a second education loan but technically that loan will also be considered as a fresh loan and not a top-up loan.
FAQs
Yes. Most of the banks allow top-up education loans even if the existing one is a refinanced education loan.
The maximum limit for education loan top-up is the total eligible loan amount minus the amount already taken.
Once you start the repayment process, you cannot take top-up on the same loan.
Top-up education loan for the specialised program is provided by the bank with the purpose of encouraging the student to study without worrying about repayment. Banks do provide additional loans for studies. However, always check the terms and conditions properly before applying for a top-up education loan.
To know more about education loan top-ups, the best international 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.
| Related Blog |
| How to Customise Education Loan Top-up as per Your Needs |
| Detailed Guide on Top-up Education Loans in India |
| Early Repayment Charge on Education Loan |
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