Detailed Guide on Top-Up Education Loans: What Indian Students Need to Know

Top-Up Education Loans
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Mahesh and Suresh are studying undergraduate courses at Imperial College, London and both of them have taken an education loan for tuition and accommodation fees. When they completed the course Suresh said that he wanted to pursue a postgraduate program in continuation and insisted Mahesh do the same. 

Mahesh asked Suresh “How is it possible to manage finances for another course when we have already taken a loan and the repayment is about to start?”. Suresh then told Mahesh “Don’t worry! There is a top-up education loan which is offered by banks in case you need more loans to fund your education”. 

Hence, with this story, we can understand that top-up education loans mean an extended loan offered by banks in case you need to study further. Let’s discuss all the features of top-up education loans.

What is a Top-Up Education Loan?

An education loan top-up is an additional loan that can be availed by students who have already taken an education loan for their studies. It essentially supplements the initial loan amount and can be used to cover expenses that were not initially considered. 

The key benefit of a top-up loan is that it saves students from the hassle of applying for an entirely new loan, which might involve re-submitting documents and going through the approval process once more. Usually, the students who decide to pursue postgraduate studies in continuation with their graduation take a top-up education loan.

Education Loan Consolidation is one of the most preferred options to convert your multiple loans and credit card bills into one single loan. However, you must be very careful while choosing a bank/lender for a personal loan for debt consolidation. You can read this blog on 

Best Student Loan Consolidation Banks

When Should You Apply for a Top-Up Education Loan?

It is very important to analyse the situation when you require a top-up education loan. Indian students pursuing education abroad often encounter situations where they need more funds than originally estimated. Some common scenarios where a top-up loan can be beneficial include:

Continuing Further Studies

In most cases, students who want to pursue further education after completing a particular degree require a top-up education loan. For example, you are pursuing an undergraduate degree from a college or university in Australia. 

Now after completing the undergraduate course, you decide to be admitted to a postgraduate program from the same or different universities in Australia. In this case, you can take a top-up loan or extended loan from your bank.

Rising Tuition Costs

With a rise in inflation rates in a country the tuition fee also shows a rise in the cost. Tuition fees for international courses can increase over time. This impacts the short and mid-term financial planning of a student studying in a foreign university. A top-up loan can bridge the gap between the initial tuition fee and the inflated tuition fee. 

In such cases, you can immediately contact your banks and ask whether they can approve a top-up loan over the existing one. 

Additional Living Expenses

In some cases, the bank may initially approve only the tuition fee and related costs. However, there are a lot of cities which have a high cost of living. A top-up loan can cover increased accommodation, food, and transportation expenses. You can also ask your bank to transfer the accommodation amount directly to your bank account (might not be available always). 

Course Extensions

If a student’s program extends due to course changes, additional semesters, or research requirements, a top-up loan can provide the necessary financial support. Sometimes there can be a delay in examinations or research-oriented degrees. In such cases, you can take a top-up loan without worrying about the repayment period as it will start only after the completion of the course. 

When taking an education loan there is always a question among students about taking a loan with or without collateral. You can read this blog to find your answers 

Secured vs. unsecured Loan 

Benefits of Education Loan Top-Ups

There are a lot of benefits of education loan top-ups. One of the most important benefits is that you can continue to study further without any hindrance regarding finances. Let’s understand how top-up education loans can be beneficial for you:

  • Simplified Process: Applying for a top-up loan is generally easier and quicker than applying for a new loan, as the student’s creditworthiness is already established. Also, you have already an ongoing relationship with the bank which will make the entire process fast. 
  • Flexible Usage: Top-up loans can be used for various purposes related to education, such as tuition fees, living expenses, travel costs, and course materials. 
  • Extended Repayment Tenure: Top-up loans often come with extended repayment tenures, making it more manageable for students to pay back the borrowed amount. The bank will allow you enough time to finish your studies before starting the repayment. 
  • Competitive Interest Rates: Top-up loan interest rates are often competitive, making it a cost-effective financing option. For example, SBI has a dedicated scheme of education loan takeover in which the bank will offer you a loan for further education at low-interest rates with an extended repayment period. 

Eligibility Criteria for Top-up Education Loan

There are certain eligibility criteria prescribed by the banks and NBFCs for a top-up on education loans. It also varies from bank to bank. Some of the general eligibility criteria include:

  • The student must have an existing education loan
  • The performance of the student in the current course shall be up to the mark
  • Your credit score shall be good at the time of applying for a top-up education loan.
  • The bank may ask for more collateral to match the overall value of your education loan.

How to Apply for a Top-up Education Loan?

A lot of banks today accept online applications for top-up education loans. The application process involves providing necessary documents, including proof of admission, existing loan documents, and an estimate of the additional funds required. It’s advisable to approach the lender who originally provided the education loan for a smoother process. 

  • Visit the official website of your current lender/bank to apply for a top-up loan
  • Check the eligibility criteria
  • Submit necessary documents like your academic transcripts, scorecards, admission letter for upcoming courses (if required) etc.
  • Apply and wait for approval

Note: Some banks may require a branch visit by the student or the parent/co-applicant. The bank will analyse the application and the required eligibility criteria before approving the top-up loan. Please read all the terms and conditions provided by the bank before applying for an education loan top-up. 


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

If you have completed your graduate program and secured high grades you can apply for a top-up on your education loan for further studies. 

What is the interest rate for a top-up education loan?

The interest rate for education loan top-up will vary depending on the bank/NBFC. Also, it’s not guaranteed that the interest rate will be the same for the initial loan and the top-up loan.

What is an extended education loan?

The extended education loan is similar to the top-up loan provided by the same or other bank/lender for further studies subject to the terms and conditions of the loan.

Education loan top-ups are a valuable financial tool for Indian students aspiring to study abroad. They provide the flexibility and convenience needed to cope with unforeseen expenses and changing financial circumstances.

To know more about education loan top-ups, 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. 

Related Blogs
Pros and Cons of Student Loan Consolidation 
How to Apply for Education Loan Refinance 
Impact of Moratorium and Grace Period on Education Loan Refinancing 

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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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