How to secure an overseas education loan top-up with an existing loan?


In 2024, it is expected that a substantial number of Indian students will continue to pursue higher education abroad. Moreover, the expected expenditure is over $80 billion by 1.8 million students. This underscores the increasing demand for international education among students. However, the high costs associated with studying abroad necessitate additional financial resources.

While many students opt for student loans to fund their education overseas, some individuals may already have existing student loan for study abroad. When individuals face increased expenses or require additional financial support, they must navigate the complexities of managing multiple loans.

What are top-up study abroad loans?

An overseas education top-up loan involves obtaining an additional sum of money or loan while already having an existing loan. This indicates that an individual is seeking additional financial assistance, possibly for different reasons. The repayment for both the existing education loan and the top-up loan is then combined, creating a consolidated payment structure to be repaid at a later date.

Is there any additional paperwork required for a top-up loan?

Typically, when applying for a top-up loan, students may find that much additional documentation won’t be required. However, if seeking an extra amount for a master's programme, providing evidence of enrollment, such as the offer letter, becomes necessary. Additionally, banks may request documents confirming the completion of the bachelor's degree.

An essential requirement for establishing a top-up facility involves providing collateral in addition to duly signing the standard paperwork for the loan. In cases where individuals opt for an unsecured loan, the bank will conduct a reassessment of the individual's creditworthiness and credit history.

This approach ensures that the application process remains streamlined, with the necessary documentation serving as a means to validate the student's academic progression and financial standing. Furthermore, it highlights the significance of collateral in obtaining a top-up facility while also conducting a comprehensive credit evaluation for individuals who choose unsecured loans.

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

Typically, overseas education top-up loans have higher interest rates compared to regular study abroad loans. Individuals must communicate directly with the bank to determine the specific percentage that the top-up loan will be charged. Additionally, individuals should clarify with the bank whether the new interest rate will result in a recalculation of the equated monthly installment (EMI) for the previous loan.

This clarity is fundamental to understanding the financial implications of opting for a top-up loan, ensuring that borrowers are well-informed about the associated costs and can make informed decisions regarding their repayment obligations.

How do loan top-ups work?

Let’s take into consideration an example to get a clearer understanding of the matter.

There is a scenario where a student took an overseas loan for undergraduate studies. Now they again need a loan for their masters.

Explanation: In this scenario, the student's financial journey involves a phased approach to education financing. A 10 lakh INR loan was required by a student for their undergraduate studies, spanning five years with a six-month moratorium. However, the need for a top-up loan of 30 lakhs arises for pursuing a master's programme in the UK, extending over 1.5 years, so they took another loan.

Upon acquiring the top-up loan, the total outstanding debt becomes 40 lakhs, encompassing both the undergraduate and postgraduate loans. Notably, the 40 lakh amount effectively serves as the new initial loan. During the moratorium period of the top-up loan, the borrower temporarily defers the repayment of EMIs from the undergraduate loan.

The holistic repayment timeline for the combined loans extends to 6.5 years, excluding the moratorium duration. To streamline the financial process, students should consider opting for a top-up loan from the same banking institution that provided the initial loan. Additionally, students can explore the possibility of negotiating an extension of the repayment period, aligning with their financial capabilities, and ensuring a manageable repayment schedule.

Should an individual take an overseas education top-up loan from the same lender?

When considering a top-up loan, a careful analysis of available options is essential. The decision largely depends on the individual's preference—whether to choose the same bank for the additional loan or explore alternative lenders. If an individual is opting for a different lender, it prompts the need to transfer the loan balance from the previous bank to the new one. This step is commonly taken by borrowers seeking to leverage the potentially lower interest rates offered by the new lender, a strategy employed by many to optimise their financial arrangements.

How can Education Loan Guru ease the process for you?

Education Loan Guru serves as your trusted companion in simplifying the complexity of obtaining an education loan abroad, particularly when considering a top-up loan. Recognising the challenges students may face in navigating the complexities of securing financial support for international education, Education Loan Guru emerges as a reliable guide.

From the initial application process to resolving queries about top-up loans, Education Loan Guru stands by your side. They ensure a smoother and more informed experience in your pursuit of international education.


With the rising costs of education abroad, individuals may face unforeseen challenges that necessitate additional funds. In such circumstances, students often opt for an additional student loan to meet their financial requirements. It's noteworthy that while top-up loans are available to address these needs, borrowers may incur higher interest rates on the supplementary loan.

For a comprehensive and streamlined approach to student loans for studying abroad, Education Loan Guru emerges as the one-stop solution. Education Loan Guru stands as a reliable partner for students, addressing their diverse needs and ensuring a smoother financial journey when pursuing education on an international scale.

By Education Loan Guru