MBA Education Loan: Eligibility, Top Loan Schemes, Steps to Apply, Tips
The increasing fees for MBA courses have made it necessary for the students to opt for an MBA Education Loan. However, there is a lot to consider before you sign that loan agreement. Here are some of the most important details about MBA Education Loan in India.
Master of Business Administration (MBA) is one of the most expensive postgraduate courses in India. Even though the course offers high returns, MBA colleges in India demand a high investment up front, which many students are unable to afford out of their pockets.
Top MBA colleges such as the Indian Institutes of Management (IIMs) charge a premium for their high-quality MBA courses. With IIMA recently hiking the fee for its flagship course to Rs. 23 lakhs, the MBA course fee for IIMs now range between Rs. 13 - 23 lakhs. The amount is higher if a student is opting for an Executive MBA course.
It is not just the IIMs, other MBA colleges in India also charge a hefty sum for their courses. The fee for an MBA from a good college can easily lie between Rs. 5 and Rs. 20 lakhs. MBA course fees above Rs. 10 lakhs are becoming more common with each academic year. Add to this the cost incurred in books, lodging, and other essentials and the cost of pursuing an MBA increases.
Therefore, it becomes necessary for students to look for ways to fund their MBA education. Luckily, financial institutions in India offer student education loan options to finance your education. Keeping in mind the high expected returns on an MBA course, banks readily grant these education loans to students who have secured admission into a top-tier MBA college.
In this article, we have provided all of the important details about MBA Education Loan in India.
Why Take an MBA Education Loan?
An MBA Education Loan is financial assistance offered by banks and other financial institutions to a student for continuing their education. The loans are offered to students who have already secured admission to an MBA course. Here is why taking an MBA Education Loan can be helpful:
Extends your pocket: MBA Education Loans can help you complete a course that you may not have been able to afford on your own.
Prevents missed opportunities: There are many students who would not be able to afford the fees for an MBA course without an MBA Education Loan. It is a very important investment that can help boost your career and open up new avenues for growth.
Provides Almost 100% Coverage: MBA Education Loans generally cover almost all of the expenses you incur during your MBA education.
Thus, an MBA Education Loan can bring more colleges within your reach, which is essential considering the high cost of doing an MBA from reputed colleges some of which have been mentioned below.
MBA Course Fee for IIMs and Top MBA Colleges in India
The need for an MBA Education Loan becomes much clearer once we take a look at the MBA course fee for some of the premier b-schools in India. Affording such a high amount will be almost impossible for a majority of the candidates if they did not have access to an MBA Education Loan.
College | Course Fee |
23 | |
3.16 - 12.76 | |
21 - 27 | |
Narsee Monjee Institute of Management Studies (NMIMS), Mumbai | 20 |
8.10 - 11.02 | |
8.77 - 23.96 | |
SP Jain Institute of Management Studies and Research (SPJIMR), Mumbai | 17.87 |
22 | |
21 | |
| 5.8 - 8 |
The fee-related data in the table above is updated as per AY 2019-20. This is subject to change as per the discretion of the institute.
Top MBA Education Loan Schemes in India
MBA Education Loan in India is provided by public-sector banks, private-sector banks as well as NBFCs (Non-Banking Financial Institutions). Given below are some of the popular MBA Education Loans available in India.
| Bank | Max. Loan Amount (in Rs. lakhs) | Rate of Interest (in % p.a.) | Repayment Tenure |
| State Bank of India | 40 | 7.15 - 9.55 | 7 - 12 years |
| Punjab National Bank | 15 | 7.20 - 9.80 | 10 - 15 years |
| Canara Bank | 20 | 9.95 - 10.70 | 10 - 15 years |
| Allahabad Bank | 20 | 8 - 10 | 7 years |
| ICICI Bank | 50 | 11.50 and above | 10 years |
| Avanse | No Limit | 11.50 | 10 years |
| HDFC Bank | 20 | 9.55 - 13.25 | 15 years |
| Central Bank of India | 20 | 8.90 - 10.40 | 15 years |
| IDBI Bank | 20 | 9.70 | 10 - 15 |
| Axis Bank | 75 | 13.70 - 15.20 | 20 years |
Eligibility Criteria for an MBA Education Loan
The eligibility criteria for an MBA education loan is as follows.
Candidate must be a citizen/resident of India.
Candidate must have secured a seat in an MBA course in selected colleges.
These are the basic requirements that are common across most of the banks. Some banks or financial institutions may also specify certain other conditions for an MBA education loan such as.
Age Limit for MBA Education Loan: RBI has placed no restrictions on the upper age limit for MBA Education Loans. However, some banks may specify an age limit of 35 years.
Some factors that influence a bank's decision in granting an education loan include:
- Academic Merit of a Student
The reputation of the MBA College
Collaterals offered
These factors may influence the amount of loan that a bank sanctions as well as the decision of the bank to provide a loan.
How to Take an MBA Education Loan
Nowadays, students can just go online to apply for an MBA Education Loan. Most of the banks allow students to apply for education loan online. Here are the steps you must follow to apply for an MBA education loan.
- Compare different loan schemes.
Fill the online education loan application form or visit the bank.
Students will usually receive a phone call from a bank representative. Over the phone, the bank representative will inquire about the student's requirements as well as answer any questions about the loan scheme.
An executive from the bank will visit the home of the student and assist in filling up the application form. The application form along with the required supporting documents will be collected and submitted at the bank.
The application form will be reviewed by the bank.
The bank may ask for additional information or fulfil any more inquiries required from the student.
Once the necessary procedure has been completed, the loan application will be approved by the bank.
The student will be asked to sign an agreement and the formalities will be completed.
The education loan amount is generally directly deposited in the institute's account. However, in some cases, it may be deposited in the student's account as well.
The student will have to provide valid bills and receipts for any costs incurred during their study to justify the usage fo the loan amount.
Best Tips for MBA Education Loan
There are a lot of institutions in the market who are willing to lend money so that meritorious students can further their educations. The banks also get good returns on these loans in the long run. When choosing an education loan, it is important to carefully select the best loan option. Here are a few tips that will help you when taking an education loan.
- Research well. Look for schemes online and talk to multiple banks regarding your loan requirements. This will help you get a better idea of the best education loan schemes and what may work best for you.
Look out for hidden charges: The loan amount and interest rate are only the basic factors when choosing a loan, look out for any bank charges such as late payment fees, prepayment penalty etc. that might affect the amount you have to pay back.
Borrow the least possible amount. When choosing an education loan, it is better not to stretch your expenses. Do a rough calculation of how much you will require as living and other expenses during the course. Borrow only the amount that is required.
Calculate your expenses. When choosing an education loan, you must calculate your estimated expenses after completing an MBA course. Take into account your expected salary, EMI, living expenses etc.
Negotiate with the bank. There are several factors of education loan such as Rate of Interest on which you can negotiate with the banks, especially if you have been selected into a top tier management college
Try to get processing fee waived off. You can negotiate with the bank to reduce or waiver the processing fee on your education loan. This is just an amount charged by financial institutions, which can be a flat charge or a certain percentage of the loan amount.
Use Work Experience for Reduced Interest: Banks may provide a concession of 0.25% - 0.50% on the rate of interest to the students who have previous work experience. However, you must inquire from your banks about any such policy.
Choose the Right Repayment Period: While it is recommended to go for the lowest repayment period for a loan as is possible, you must also take into account that the interest paid on an education loan is exempted from income tax, which can be beneficial.
A student has to be very careful while applying for an MBA Education Loan. Before you sign the loan agreement, make sure you understand the complete terms and conditions of a loan and have inquired about each and every point associated with a student loan.
Being careful when choosing an MBA education loan can help you save a couple of lakhs in the long run while also saving you from a lot of hassles and worries in the future.
For help with admission to MBA colleges in India, please fill our Common Application Form (CAF) or call our toll-free student helpline number 1800-572-9877.