How to Get Loan Midway Through Your Course
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.

GyanDhan
Rohit Gidwani
Updated on:  03 Jun 2024  | Reviewed By: 
Aman 
| 327 | 8  min read

Are you wondering if you may receive an education loan in your third year or later? The answer is yes, and this article will help you understand how. Many students find they require further financial assistance as they proceed through their courses. Whether it's for tuition or other educational expenditures, this guide makes the process easier, teaching you how to get the money you need to continue your education without worry. We'll help you with everything from reviewing your options to applying for and selecting a repayment plan.

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Can You Get an Education Loan Mid-Course?

Yes, it is perfectly feasible to obtain an education loan halfway through your academic career. Many students confront the issue of affording their education once classes begin. Financial organizations are aware of these scenarios and consequently provide education loans to students who need financial assistance after starting their studies. Students can discover acceptable financing choices in the middle of their education, whether owing to unanticipated financial issues or the need for more resources to complete their studies. If you opt to take out an education loan midway through your degree, it will cover your future expenditures, and in some situations, a select lenders may also offer you with cash for money that has already been spent. 

Check Your Education Loan Eligibility

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Understanding Your Lending Options

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

  • list items Secured education loans need collateral as security for the loan amount. Real estate, fixed deposits, and government bonds all qualify as acceptable kinds of collateral. Secured loans provide lower interest rates and the possibility of larger loan amounts, making them an appealing alternative for people who can provide the appropriate security.
  • list items Unsecured education loans: These loans do not require collateral and are generally determined by the borrower and co-borrower's creditworthiness. This option is best suited for students who lack considerable assets but have a strong academic record.
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    The market for these loans is enormous, with public banks, private banks, non-banking financial companies (NBFCs), and international lenders all taking part. Each lender provides different terms, interest rates, and loan amounts, so applicants must do a comprehensive examination to locate the greatest fit for their financial circumstances. A simplified outline of them is presented 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.
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    Eligibility Criteria for Mid-Course Education Loan

    To acquire an education loan, you must meet the qualifying conditions established by each lender. This applies to mid-course student loans as well; there are certain criteria to evaluate. They are:

  • list items There have been no past loans from any lenders for the present course.
  • list items A review of your academic achievements to date.
  • list items Proof of continuous enrollment in the educational program.
  • list items A co-applicant, typically a parent or guardian, with a steady income.
  • list items A good credit history for both the applicant and the co-applicant.
  • list items Admission to a recognized institution and program of study.
  • list items Evidence of capacity to repay the loan, including future earnings projections.
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    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)
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    Looking for an abroad Education Loan?
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    Available Options for Mid-Course Education Loan

    Different lenders might give you with an education loan to study abroad, even if you require the same course in the middle. GyanDhan can assist you secure an education loan from the following lenders:

    Lender Name Maximum Loan Amount Rate of Interest

    SBI

    Up to 1.5 Cr INR

    10.15% - 10.65% (males)

    10.65% - 11.15% (females)

    UBI

    Up to 1.5 Cr INR

    9.25% - 9.75%

    Axis Bank

    Up to 75 Lakh INR

    9.90% - 11.50%

    ICICI Bank

    Up to 1.5 Cr INR

    9.50% - 11.25%

    IDFC FIRST Bank

    Up to 70 Lakhs INR

    9.75% - 12.25% 

    HDFC Credila

    Up to 60 Lakhs INR

    10.50% - 12.25%

    Auxilo

    Up to 50 Lakhs INR

    10.50% - 12.75%

    Incred

    Up to 50 Lakhs INR

    10.50% - 12.95%

    Avanse

    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
     

    Read More About: Understanding Partial Interest in Education Loan

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    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.
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    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. 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. Consultation with loan adviser: Following the eligibility check, a trained loan advisor will contact you to discuss your needs and direct you to the lenders who best match your profile and criteria.
     

    3. Document Preparation: You'll be given a complete list of papers necessary by your selected lender. This list is tailored to simplify the preparation process, with alternatives provided whenever available to facilitate document gathering.
     

    4. Document submission: Depending on the lender's option, you can submit your papers online or by direct collection by a relationship officer.
     

    5. Verification: During this phase, the lender verifies the provided documents. The period varies, but it often runs from 7 to 15 days, depending on the lender's regulations and the kind of loan.
     

    6. Loan Approval and Agreement: After your loan is accepted, you will be required to review and sign a loan agreement. You may track the status of your loan application in real time using an online dashboard.
     

    7. Loan disbursement: The next step is to disburse the loan money, which can be transferred directly to your bank account or, in some situations, to the educational institution. This step is critical, particularly for individuals requesting financial help midway through their degree, because it assures that funds are accessible when required.

    Calculate your Education Loan EMI

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    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. 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. 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. 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. Document submission: Depending on the lender's preference, submit your documents either online or through a direct collection by a relationship officer.
     

    5. 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. 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. 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.

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    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.
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    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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