Education Loan

How to Get Loan Midway Through Your Course

How to Get Loan Midway Through Your Course

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Discover ways to get an education loan during your course. Our guide helps you understand options and simplifies the application process.

Rohit Gidwani
Updated on:  20 Feb 2024  | Reviewed By: 
| 121 | 7  min read

Wondering if you can get an education loan in your 3rd year or in any subsequent year of your education? The answer is yes, and this blog is your guide to understanding how. Many students realize they need extra financial support as they progress in their studies. Whether it's for covering tuition fees or other educational expenses, this guide simplifies the process, showing you how to secure the funding you need to continue your education without stress. From evaluating your options to applying and choosing a repayment plan, we've got you covered.


Can You Get an Education Loan Mid-Course?

Yes, it's entirely possible to secure an education loan midway through your academic journey. Many students face the challenge of funding their education after their courses have commenced. Financial institutions are aware of these circumstances and thus provide education loans for students who require financial aid after beginning their studies. Whether due to unexpected financial challenges or the need for additional resources to complete their education, students can find viable options to obtain funding mid-course. In case you decide to take an education loan midway through your course then it will cover your future expenses and in some cases few lenders can also provide you funds for the money already spent.


Understanding Your Lending Options

Education loans are primarily categorized into two types: secured and unsecured.

  • list items Secured education loans: These loans necessitate collateral as security against the loan amount. Acceptable forms of collateral include real estate, fixed deposits, and government bonds. The advantage of secured loans is typically lower interest rates and the possibility of higher loan amounts, making it an attractive option for those who can provide the necessary security.
  • list items Unsecured education loans: These loans do not require collateral and are primarily based on the creditworthiness of the borrower and the co-borrower. This option is particularly suited for students without significant assets but who possess a solid academic record.

The market for these loans is vast, with Public Banks, Private Banks, Non-Banking Financial Companies (NBFCs), and International Lenders all participating. Each lender offers distinct terms, interest rates, and loan amounts, necessitating a thorough evaluation by borrowers to find the best fit for their financial needs. A Simplified overview of them is shown below - 

  • list items Public banks: Offer lower interest rates and longer repayment terms, with eligibility for government subsidies.
  • list items Private banks: Provide faster processing and flexible loan terms, usually at slightly higher interest rates.
  • list items NBFC: More lenient on eligibility criteria, catering to a wider range of educational institutions.
  • list items International lenders: Specialize in loans for students studying abroad, with varied interest rates and loan terms.


Check Your Education Loan Eligibility


Eligibility Criteria for Mid-Course Education Loan

Every lender has its own set of eligibility criteria that you need to fulfill to obtain an education loan. This holds for mid-course education loans as well; there are specific criteria you need to consider. These are:

  • list items No prior loans taken from any lender for the current course.
  • list items A review of your academic performance to date.
  • list items Proof of continued enrollment in the educational program.
  • list items A co-applicant, often a parent or guardian, with a stable income.
  • list items A satisfactory credit history for both the applicant and the co-applicant.
  • list items Admission to a recognized institution and course of study.
  • list items Evidence of the capability to repay the loan, including future income prospects.

Documents Required for Mid-Course Education Loan

The basic documentation that would be required for your loan application is as follows -

Documents required from applicants

  • list items Photo ID proof
  • list items Proof of residence
  • list items Passport-sized photograph
  • list items Proof of admission
  • list items Fee structure document
  • list items Salary slips (if experienced)
  • list items Academic documents

Documents required from co-applicants

  • list items Photo ID proof
  • list items Proof of residence
  • list items Passport-sized photograph
  • list items Income-related documents (wherever required)

Available Options for Mid-Course Education Loan

Different lenders can provide you with an education loan to study abroad even if you need the same mid-course. Some of the lenders with which GyanDhan can help you in securing the education loan are listed below:

Lender Name Maximum Loan Amount Rate of Interest


Up to 1.5 Cr INR

10.15% - 10.65% (males)

10.65% - 11.15% (females)


Up to 1.5 Cr INR

9.25% - 9.75%

Axis Bank

Up to 75 Lakh INR

9.90% - 11.50%


Up to 1.5 Cr INR

9.50% - 11.25%


Up to 70 Lakhs INR

9.75% - 12.25% 

HDFC Credila

Up to 60 Lakhs INR

10.50% - 12.25%


Up to 50 Lakhs INR

10.50% - 12.75%


Up to 50 Lakhs INR

10.50% - 12.95%


Up to 50 Lakhs INR

10.50% - 13.50%

MPOWER Financing

Up to 100,000 USD

12.99% - 15.99%

Prodigy Finance

Up to 100% cost to study

12% - 14%

Interest rate as of February 2024


Factors to Consider While Choosing a Lender

Key considerations when choosing a lender include

  • list items Competitive interest rates and transparent fee structures.
  • list items Flexible repayment terms to accommodate your financial situation.
  • list items A straightforward loan disbursement process to ensure funds are available when needed.
  • list items Reliable customer service for resolving any issues that arise during the loan term.

Application Process for Mid-Course Education Loan

The application process for getting an education loan mid-course is quite simple. All you have to do is follow the given steps -

  1. list items Initial eligibility check: Begin by using an online tool to evaluate your loan eligibility, which helps in identifying the financial products that match your educational and financial situation. You can check your eligibility with GyanDhan here.
  2. list items Consultation with loan advisor: After the eligibility check, a specialized loan advisor will reach out to discuss your needs, guiding you towards the lenders that best fit your profile and requirements.
  3. list items Document preparation: You'll receive a detailed list of documents required by your chosen lender. This list is customized to simplify the preparation process, offering alternatives when possible to ease document collection.
  4. list items Document submission: Depending on the lender's preference, submit your documents either online or through a direct collection by a relationship officer.
  5. list items Verification process: This phase involves the lender verifying the submitted documents. The duration varies but generally ranges from 7 to 15 days, subject to the lender's policies and the type of loan.
  6. list items Loan approval and agreement: Once your loan is approved, you will be asked to review and sign a loan agreement. You can monitor the status of your loan application in real time through an online dashboard.
  7. list items Loan disbursement: The final step involves the disbursement of the loan amount, which can be directly to your bank account or, in some cases, directly to the educational institution. This step is crucial, especially for those seeking financial aid midway through their course, as it ensures that funds are available when needed.

Repayment Plans and Tips

Choosing an appropriate repayment strategy can significantly ease the financial pressure during and after your studies. Here are some ways in which you can start repaying your education loan during your moratorium period only - 

  • list items Partial simple interest during study: This plan involves making partial interest-only payments while studying, which can substantially lower the overall interest burden on the loan.
  • list items Simple interest payment during study: Paying simple interest during the study period is another effective way to manage loan costs without overwhelming financial strain.
  • list items EMI during study: Starting EMI payments while still in school can significantly decrease the total interest paid over the loan's lifespan, although it requires financial discipline and planning.

Finding financial support midway through your academic journey can seem daunting, but it's entirely achievable. This guide aims to demystify the process, ensuring you have the necessary tools and knowledge at your disposal. For those in their subsequent years of study looking to navigate the complexities of securing an education loan, remember assistance is just a few steps away. Start by checking your eligibility on platforms like GyanDhan, where a tailored approach can help simplify your journey towards securing the financial support you need to continue your education.

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Frequently Asked Questions

What types of interest rates are applied to education loans?

Loans can have either simple or compounded interest rates, affecting how much you'll end up paying back in total.

Can I prepay my education loan without additional charges?

Prepayment options are available, but whether there are charges can depend on the lender's policies at the time of prepayment.

Is there a processing charge for education loans?

Some lenders, like Avanse Financial Services, may charge a one-time processing fee, usually around 1-2% of the total loan amount.

What is the margin amount in education loans? Do I need to provide it?

A margin amount is similar to a down payment. However, some lenders may offer up to 100% financing, eliminating the need for a margin amount.

Can I get an education loan in the 3rd year for expenses already incurred?

Yes, some lenders can provide funds not only for future expenses but also for expenses already incurred during the course, subject to their terms and conditions.

Check Your Education Loan Eligibility


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