Can You Change University After Education Loan Sanction? Explained!

In the fiscal year 2022-23, India's outstanding education loan portfolio experienced a significant 17% growth, increasing from ₹82,723 crore to ₹96,847 crore.

With such a significant number of students relying on education loans to pursue higher studies, it's not uncommon for plans to change after a loan has been sanctioned. Whether due to receiving a better offer from another university, unforeseen circumstances, or personal preferences, many students find themselves considering a change in their educational institution post-loan approval.

The question then arises: Is it possible to change your university after your education loan has been sanctioned? The answer is yes. The process, though, does come with a few extra steps.

Key Highlights:

• Updated documents such as a new admission letter, fee structure, and course details must be submitted to process modifications.
• Loan modifications may involve processing fees, typically ranging between ₹5,000 to ₹10,000, depending on the lender.
• The timeline for changes can vary from a few days to a couple of weeks, so it’s important to start the process early.
• Switching universities may affect loan terms like interest rates, repayment schedules, and eligibility criteria, which should be reviewed carefully.

But don’t worry—we’re here to simplify every detail. In this blog, we’ll break down the entire process step-by-step, making it easy for you to understand and follow.

Can You Change Your University After an Education Loan is Sanctioned?

Yes, you can change your university even after your education loan has been sanctioned. Banks and financial institutions understand that plans can change, and they allow updates to loan details if needed.

Many students face situations where they receive a better offer from another university, experience course cancellations, or deal with personal reasons that require them to switch. In such cases, lenders offer a process to modify the loan details to match the new university.

However, it’s important to know that this change isn’t automatic. It involves informing your lender, submitting updated documents, and making adjustments to the loan terms. While it may take some time and paperwork, it is a straightforward process if you follow the steps carefully.

Modifications in an Education Loan After the Loan Sanction

Modifying an overseas education loan after it has been sanctioned is possible, but the process depends on when the changes are made. Lenders understand that plans can shift, and they offer procedures to update loan details accordingly. However, these changes may involve new paperwork, processing fees, and slight delays. 

Here’s how modifications work in different scenarios:

Scenario 1 - Before Loan Disbursement

If you decide to change your university before the loan amount has been disbursed, the process is relatively simple. Since the funds haven’t been transferred yet, lenders can update your application with the details of the new university. You will need to submit your new admission letter, fee structure, and course details for verification. 

Some lenders may ask you to fill out a revised loan application form, but the process usually moves quickly as long as all required documents are in place.

Scenario 2 - After Loan Sanction but Before Disbursement

In cases where your loan is already approved but the funds haven’t been sent, modifications can still be made without starting from scratch. You’ll need to inform your lender immediately and submit updated documents reflecting the new university details. Most banks charge a small fee to process such changes, and this can range from ₹5,000 to ₹10,000, depending on the lender. 

It’s also important to check if the new university meets the lender’s eligibility criteria, as this can impact approval timelines.

Scenario 3 - After Loan Disbursement

Changing universities after the loan amount has been disbursed is more complex. Since funds have already been transferred, you might need to close the current loan and reapply for a new one. This involves settling any disbursed amounts, which can be time-consuming and may include prepayment charges. Lenders also require updated documentation and might reevaluate the new university’s eligibility before approving a fresh loan. 

If the new university’s fee structure is higher, you may need to apply for an additional loan or request a top-up.

What is the Process of Changing University After Education Loan Sanction?

Changing your university after securing an education loan involves a series of steps. Taking these steps on time can help you avoid delays in your academic schedule. It’s important to stay in touch with your lender throughout the process and double-check all documents to ensure smooth approval.

Here's what you need to do:

1. Inform Your Lender Immediately

The first and most important step is to notify your bank or financial institution as soon as you decide to change universities. Early communication helps avoid delays and ensures a smoother process.

2. Submit Updated Documents

You need to provide the admission letter from your new university, the updated fee structure, and course details. These documents are required to reassess the loan terms and verify eligibility.

3. Fill Out a New Loan Application Form

Some lenders may ask you to submit a fresh application form with the updated university information. This step helps banks revise the loan details accurately.

4. Pay Modification Fees

Lenders may charge a small processing fee, usually ₹5,000 to ₹10,000, for modifying the loan agreement. Make sure to confirm the charges with your bank before proceeding.

5. Wait for Loan Re-evaluation

Once you submit the updated documents, your lender will review the new details to ensure the new university and course meet their funding criteria. This may take a few days to a couple of weeks.

6. Sign the Revised Loan Agreement

If the changes are approved, you will need to sign a new loan agreement reflecting the updated details. This step finalizes the process, and the funds can be disbursed to the new university.

Why Would You Need to Change Universities?

Changing universities after securing an education loan can happen for several reasons. Each of these situations requires careful consideration and prompt action to ensure a smooth transition to a new university. It's important to communicate with your lender about any changes to update your education loan details accordingly.

Here are some common scenarios:

• University Admission Rejection: Sometimes, students apply to multiple universities and may not get accepted into their first choice. If the university you planned to attend rejects your application, you'll need to consider other options. This might mean choosing a different university that has offered you admission.
• Finding a Better Option After Securing Admission: After being accepted into a university, you might receive an offer from another institution that better aligns with your academic goals or personal preferences. In such cases, switching to the new university can be beneficial for your future.
• University Deferral or Closure: Unexpected events like a university postponing its academic session or shutting down can disrupt your plans. If your chosen university defers your course or closes, you'll need to find an alternative institution to continue your education without delay.
• Personal Reasons (e.g., Family Relocation): Life events such as family relocation, health issues, or other personal circumstances might make it necessary to change your study location. In such situations, transferring to a university closer to your new location or one that better fits your changed circumstances becomes essential.

Final Thoughts

Changing universities after your education loan is sanctioned can seem tricky at first, but it’s a process designed to support students when plans need to shift. Lenders are flexible and allow modifications as long as the right steps are followed—submitting updated documents, revising agreements, and ensuring eligibility. While it may take some extra time and effort, the process is straightforward and helps you stay on track with your academic goals.

At Yocket Finance, we make education financing simple and stress-free. Whether you’re planning to apply for a loan or need help modifying one, our team is here to guide you every step of the way. With tailored advice, easy comparisons, and dedicated support, we ensure that your financial journey aligns perfectly with your academic dreams. If you’re facing challenges with your education loan, reach out to us—we’re here to help.