As the moment draws closer to offer letters from the B-Schools to arrive after the GD/PI rounds and the results are released, many MBA aspirants cling back and forth when investing their lives in the B-Schools due to their rising fees. Cost of MBA at the best universities abroad are soaring high, but money is not anything that can deter someone from going into their dream B-School, and that’s why it’s time to make that dream exist with an education loan to study abroad. Here is a guide to get an education loan for an MBA.
MBA Loans For International Students: Key Features
Obtaining an education loan for an MBA is a prevalent choice among international students, given the substantial expenses involved in higher education. Numerous financial institutions, whether private or government-supported, provide study loans designed specifically to cater to the requirements of prospective students. These loans commonly cover tuition fees, living expenses, and other associated expenditures. The following table outlines the key characteristics of MBA student loans:
|Student Loans For MBA Programmes Overview
|1 Cr-1.5 Cr
|Education loans for MBA Interest Rates
|Course Duration + 6-12 months
|Tangible property, bonds, assets, etc.
|Parents, Guardians, Spouse, In-laws
MBA Education Loan Eligibility
The eligibility criteria requirements for international MBA admission student loans can vary depending on the lender you’re applying through. However, some general criteria are commonly applied:
- Citizenship: Most lenders require you to be a citizen or permanent resident of the country where you’re applying for the loan.
- Age: You’ll typically need to be within a specific age range, often between 18 and 35 years old.
- Academic Background: A good academic record, often with a minimum GPA requirement, is usually necessary. This could be based on your undergraduate degree or previous academic achievements.
- Institution: The program needs to be offered by a recognised university or academic institution.
- Creditworthiness: A good credit history or a co-signer with a strong credit score might be required, depending on the lender. Education loan with low CIBIL score can affect the loan borrowing amount.
- Collateral: Unsecured loans are available but might come with higher interest rates. Secured loans involving collateral might be an option for some lenders.
Always research and compare different lenders and their specific requirements before applying for an MBA student loan.
How To Apply For MBA Student Loans For International Students
The ease of operation of every foreign education loan for MBA students depends very much on the contract terms of the lending institution. There are several lenders who are lending an MBA education loan in India. So, how are you going to choose the correct one whose policies meet the financial criteria of your university/college? For example, if the country in which you wish to study is not on your respective bank’s list of countries qualified for education loan for MBA abroad, it is likely that bank officials will fail to process your application. The education loan eligibility for MBA varies with different loans. This is one of the most popular challenges confronted by candidates who intend to take advantage of an MBA student loan from government banks. This is where the UniCreds come into the picture. If you apply with us, we can guarantee that the whole loan phase becomes a piece of cake for you. Here’s a step-by-step application process:
- Step 1: Go to www.unicreds.com and fill the entry form on the website.
- Step 2: Soon, our loan expert will get in touch with you for a detailed understanding of your requirements.
- Step 3: With a thorough understanding, we will give you a customised loan option from the top financial institutions in India.
- Step 4: You can choose your lender and provide us with the documents digitally, along with the loan application form.
- Step 5: Just wait for your loan to get sanctioned in days!
Documents Necessary For Education Loan For MBA Abroad
The process of securing an education loan for pursuing an MBA abroad requires careful attention to documentation. Ensuring you have all the necessary paperwork in order is crucial for a smooth application process. Given below is a list of documents you need to gather beforehand for a faster application process:
- Application of the loan
- Proof of entry in the university
- Passport size photographs
- Address and evidence of age if you are not a current bank customer
- Copies of the transcripts in the qualifying examinations
- Schedule of fees for the course
- Statement of bank account for the last six months of the borrower/co-borrower income tax statement of not more than two years (students or parents)
- A concise statement of the borrower’s assets and liabilities
- Sample SOP for MBA to demonstrate need of financial assistance
Various Lenders That Provide MBA Student Loans For International Students
Education loans in general education loans for MBA abroad are classified into two types, depending on the requirement for collateral. The first type is called Secured Education Loans. The second type of student loan is an MBA loan without collateral. Non-collateral student loans do not need collateral, unlike secured loans. However, non-collateral loans mandate higher interest rates as compared to loans with collateral. The table given below mentions the MBA loan with and without collateral offered by different banks:
|Secured MBA Loan
|Secured Interest Rate
|Unsecured MBA Loan
|Unsecured Interest Rate
|INR 1.5 Cr
|INR 1 Cr
|INR 2.5 Cr
|INR 80 Lakhs
|IDFC First Bank
|INR 1.5 Cr.
|INR 75 Lakhs
|Union Bank of India
|INR 1.5 Cr
|INR 40 Lakhs
|Bank of Baroda
|INR 1.5 Cr
NBFCs That Offer Study Loans For MBA
Here is a list of NBFCs that offer secured as well as unsecured education loans for MBA Education Loans:
|Secured MBA Loan
|Unsecured MBA Loan
|INR 1.5 Cr.
|INR 75 Lakhs
|INR 1.5 Cr.
|INR 1 Cr.
|INR 85 Lakhs
|INR 85 Lakhs
When Is A Good Time To Apply For An MBA Education Loan?
If you want to finance your MBA abroad with the aid of an educational loan, the best period to apply will be at least 1.5 months before you start your visa procedure. The best option will be to submit shortly after you have obtained entry to a college abroad.
If you are looking forward to becoming an international student and need assistance with student loans, all you have to do is fill the form in this blog.
MBA Education Loan Repayment
Repaying an MBA education loan can be a significant financial commitment. Here’s a breakdown of the key points to understand the process:
Generally, education loan repayment starts 1 year after completing your studies or 6 months after securing a job, whichever comes first. This grace period allows you to focus on settling into your career before starting loan payments.
Repayment Period: The loan repayment period or the period of moratorium in education loan typically ranges between 10 to 15 years, though it can extend beyond that depending on the lender and your loan agreement.
Standard Repayment: This involves making fixed monthly payments over the entire loan term. This is the most common option.
Income-Driven Repayment: This option may be available depending on your location and lender. It adjusts your monthly payments based on your income, potentially providing lower payments during lower-earning periods.
Graduated Repayment: This option starts with lower monthly payments that gradually increase over the loan term.
Early Repayment: Some lenders might offer benefits or discounts for early repayment of the loan. This can save you money on interest in the long run.
Tax Benefits: In certain countries, you might be eligible for tax deductions on your loan interest payments. Check with your financial advisor or tax professional to understand if this applies to you.
Refinancing: Depending on your situation and interest rates, refinancing your loan with a lower rate might be an option in the future.
Tips To Get Education Loan for MBA
If you stick to the following suggestions when getting funding for an MBA with an Education Loan, not only can you get the greatest offer, but you can also save a ton of money when repaying your education loan for an MBA abroad with interest. (Keep in mind that you need to be careful about the education loan eligibility for MBA for different loan schemes.
1. Calculate the estimated expenditures
Calculate the demand for MBA funds on the basis of 4 considerations, i.e. the requirement for 2-year funds; the prospective work market after 2 years; the amount required to live a non-luxurious life over the year; and the EMI on the basis of the interest rate and the repayment date. Apart from finding money for school fees, you need to worry about accommodation & boarding costs, computers, stationery, books, clothes, and others. Taken together, each of these costs may be very heavy. So it’s for sure that you will incur them.
2. Look for the cheapest education loan for MBA
You will save at least 2 lakhs on your admission fee if you opt for a student loan from the right lender after a little negotiation.
Almost all banks use their own study loan schemes to finance MBA studies in India and abroad. These study schemes are split into two parts – one is a standard study loan for students of normal academic institutions and the other is for premium institutions such as IITs, IIMs, XLRIs, MDIs, SPJIMRs, IMIs, IMTs, IIFTs.
The distinction between the two forms of schemes is that the study loan schemes for top institutions give you a greater sum with a lower interest rate. The Corporate/Head Offices of these banks shall post a revised list of such premium B colleges.
If your institute comes under the category of top MBA college, you can get a low-interest rate MBA study loan and you will be able to save a considerable sum over the repayment period of 7 years or so when a 0.25 per cent increase in interest rate will have a cumulative impact on lakhs at the end of the year.
3. Try comparing MBA Funding Schemes for different banks
Educational MBA loans are applicable to almost all banks and other specialist financial entities in the private and public sectors. These loan schemes are called by different names to determine the different terms and conditions, maximum number, concessionary interest rate, co-borrowing, need for margin and protection.
4. Ask for a shorter period of payment
Think about reducing the maturity time on your school loan. The banks have tactfully updated and expanded the same. The burden of interest would be higher for a prolonged period. For eg, if you repay a loan sum in 10 years on which accumulated interest is Rs. 6.4 lakh, the same amount, if repaid in 7 years, would bear the net interest of about Rs. 4.35 lakhs as the interest rate will be lower due to a shorter repayment duration.
5. Pay interest in the course cycle
Try to repay the balance of basic interest added to your study loan amount. It will reduce the interest pressure as interest compounding starts after 1 year of completion of the program.
Q1. How should I arrange my MBA money?
The best option to arrange for your MBA money is to get an education loan. There are many banks which provide lucrative education loan options for students planning to go abroad.
Q2. Is an education loan available for MBA?
Yes, an education loan is available for students who want to pursue MBA. Depending on the cost of the MBA course and the type of institution, banks may finance up to 100% of the education loan. Most banks don’t need a margin deposit for MBA education loans up to Rs. 4 lakh. A co-applicant with collateral may be needed for loans of more than Rs 4 lakh and up to Rs 7.5 lakh.
Q3. Is it worth taking an education loan for an MBA?
It is considered a good option to take an education loan for an MBA. Simply applying for an MBA tuition loan will save you taxes. Your income would generally be Rs 10 LPA or more after obtaining an MBA degree. Hence, payback becomes easier.
Q4. Do we get loans for an MBA in India?
Yes, many banks have a dedicated section to provide education loans to students looking to pursue an MBA in India. With the right documents and admission letter, you can successfully apply for an education loan in India.
Q5. Which bank is best for an abroad MBA education loan?
Choosing the best bank for an abroad MBA education loan depends on factors such as interest rates, repayment terms, and customer service, making it subjective to individual preferences and financial circumstances.