About Education Loan | Why Education Loan? | Benefits and Expenses | List of Loan Provider | Eligibility and Repayment | Concession | Steps to Education Loan | How to choose the right Loan? | Comparison| Procedure
An increasing number of students are now taking education loans for their studies and especially those who are doing their masters in India or studying abroad. The fees of these institutes are a lot and it becomes difficult for the students to arrange for that much amount at one go. But thanks to the education loan providers in India, their efficient loan providing services and hustle free document processing has helped many students to live their dreams with ease. There are multiple numbers of education loan providers available in India but we will hear talk about the top educational loan providers which will provide you an insight into all these service providers. This article will help you to understand everything you want to know about MBA Education Loans.
The fact that MBA is an expensive education is beyond any point of dispute but added to it is another fact that once you get admission offer from one of the 13 IIMs or other top-rated B schools like MDI, IMT, XLRI, SPJIMR, JBIMS, IMI, NITIE, there is no lack of funds to pursue the course. The only need is that you have to be smart enough to judge your requirements and find out the Bank offering the best deal or other financial institution that can cater to it in the manner best suitable to you and at low cost.
A loan helps make you independent. You’ll help your parents by financing your MBA by yourself. You’ll be able to finance unforeseen expenses related to additional exams to be taken, travel arrangements, laptop computers, and books. For example, suppose your living expenses are higher now since other low-cost campus arrangements might not be working out, or suppose your travel expenses have gone up due to the rate increase, taxes, etc. And yet another reason for availing an education loan is the Tax Benefit. The borrower or co-borrower can avail a benefit under Section 80(E) of Income Tax Act of India.
Different banks and financial institutions have different criteria to fund MBA education in different institutes according to their own ranking. Banks have published their lists of premier B schools and other B schools. Accordingly, loan for MBA education may be available from Rs. 4 lakhs to Rs.20 lakhs depending upon the classification of the institute by the Bank’s own standard.
Apart from this, a bank situated in the premises of the particular MBA College may also provide some special funding schemes to pursue MBA from that particular institute. For example, State Bank of India at IIM Ahmedabad campus offers education loan up to Rs.20 lakhs but the same Bank at MDI Gurgaon campus offers education loan up to Rs. 15 lakhs to pursue MBA. On the top of it, the rate of interest at IIMA is 10.20% and MDI Gurgaon it is 10.70%. Whenever you get an offer from college and get selected, college sends you the brochure which includes college fees and few of the bank’s names that will grant you study loan easily.
To get a loan is way easy if you get admission in Colleges like IIM (Indian Institute of Management), IIT (Indian Institute of Technology), FMS (Faculty of Management Studies), XLRI (Xavier School of Management), NIIE (National Institute of Industrial Engineering), SP Jain Institute of Management, IIFT (Indian Institute of Foreign Trade) and few others.
Even you may get the call from various private banks and Education loan providers ( Credila, Avanse). Your contact details are many times share by the institute with the banks they have collaboration with). If you thinking to do MBA from Outside India, then it might be a little difficult and long process. But to get the loan for doing MBA from India, getting the loan is the easy and simple process.
In government banks – They have the name of all private and government PG institutes to whom they grant loan at one go, but for rest of Colleges, it gets little difficult to sanction the loan.
Why should I apply for an education loan?
- A loan helps make you independent and helps your parents by financing your MBA by yourself.
- You’ll be able to finance unforeseen expenses related to your education, such as travel, a laptop computer, and books.
- You get a tax benefit under Section 80(E) of the Income Tax Act of India.
- Education loans for MBA degree programs often feature low-interest rates and deferred repayment while you are in school.
Benefits and Expenses covered under MBA Education Loan
There are so many Benefits and Expenses covered under MBA Education Loan. Loan for MBA education is one of the few worthwhile reasons for getting into debt. But falling into a trap without giving it a proper thought is definitely bad which shows your poor management skills. Getting into education loan trap is easier than you think and usually, we run into a bank the scheme of which appears lucrative but has many loopholes to plug. Sometimes we have to approach other banks to take over the existing education loan to get rid of the vicious cycle of these schemes since it becomes difficult to regularly repay the same after competition of the same due to their hidden charges, high rate of interest, compounding interest system, guarantee, and security system as well as irrelevant documentation. You can get a loan up to 100 percent of your cost of education. There are many benefits of Education Loan which could cover expenses under MBA Education Loan. Know More.
List of MBA education loan provider
Education loan for MBA is available from almost all the banks and other specialized financial institutions in private and public sector including this list of MBA education loan provider Avanse, Central Bank of India, Credila, Dena Bank, IDBI Bank, HDFC, Punjab National Bank, State bank of India, Punjab & Sind Bank. These loan schemes are known by different names to ascertain the various terms and conditions, maximum amount, the concessionary rate of interest, clubbing of co-borrower, need of margin and security. SBI has named its education loan scheme for premier B-schools as ‘Scholar loan scheme’ and SBI student loan; PNB has named it as PNB Pratibha and PNB Saraswati. But our prime objective is not to go for the name but to know where they can get maximum at a minimum interest rate. Know More.
Eligibility and Repayment of MBA Education Loan
To get a loan is way easy if one gets admission in top management colleges like IIM (Indian Institute of Management), IIT (Indian Institute of Technology), FMS (Faculty of Management Studies) Delhi, XLRI Jamshedpur, SPJIMR Mumbai, and few others. In such cases, some private banks and Education loan providers like Credila and Avanse might even call the students themselves. The contact details of students are often shared by the institute with the banks and loan providers they collaborate with. This makes it all the cooler as the bank may sometimes come to the customer’s doorstep to carry out the loan processing formalities. Following article will help you to understand the Eligibility and Repayment of MBA Education Loan. Know More.
Concessions on MBA Loans for female students
Indian colleges provide concessions on MBA education Loans for female students because in India many girls are not allowed a good education. Even though primary school is attended by an equal number of boys and girls, most girls are forced to drop out because of different reasons. There is also a good percentage of women who have studied hard and are competing with men at all levels in different industries. According to the 8th, All India Educational Surveys (AIES) 2012 conducted by the National Council of Educational Research and Training (NCERT), of the out-of-school children, 62% were girls. They make up two-thirds of the illiterate population aged between 15 to 24 years. The report throws light on the fact that while girls attend primary school in roughly equal numbers as boys, the gap widens as they get older. More girts are forced to drop out to help with work at home or get married. The reason behind this may also be the expenses incurred on funding the education of the female child. To empower women, almost all public and private banks have launched various schemes, concessions on MBA Loans for female students, giving low-interest rates and rebates on education loans. Banks such as HSBC, Central Bank of India, Corporation Bank, Overseas Bank, State Bank of India and Allahabad Bank are offering 0.5% concession to girl students on their education loans as compared to the male students. Know More.
Steps to Apply for an Education Loan for Your MBA
Today, technology has made it very simple to apply for an education loan. You can apply from anywhere in India. You can even apply before your confirmed admission. It’s just a click away.
Most banks provide an online application and support. The process is simple, as illustrated below:
- Student: Complete an online education loan application form
- Bank: Follow up with the student and parents to answer questions
- Bank: A representative visits your house and collects a signed application form with the supporting documents
- Student: Provides a completed education loan application form with all the required supporting documents
- Bank: A credit team will review and underwrite the education loan application
- Bank: Approves the education loan or asks for any additional information required
- Student: Completes the education loan disbursement formalities by signing the education loan agreement
- Bank: Deposits the education loan amount in the required bank account electronically
How do I choose the right loan for me?
Look for banks that offer:
- The full loan amounts
- A low-interest rates
- Security flexibility
- Quick and door-step service
Most banks offer loan approval before your confirmed admission. This helps you show proof of funding for your admission or for a visa. You can get a loan up to 100% of your cost of education. EMI typically starts six months after graduation. You get a tax benefit under Section 80(E) of the Income Tax Act of India.
Make a Comparison
Education loan for MBA is available from almost all the banks including Central Bank of
India, Dena Bank, Punjab National Bank, State bank of India, Punjab & Sind Bank, Avanse
Financial Services, IDBI Bank, HDFC. These loan schemes are known by different names to
ascertain the various terms and conditions, maximum amount, the concessionary rate of interest,
clubbing of co-borrower, need of margin and security.
SBI has named it as SBI Scholar and SBI student loan; PNB has named it as PNB Pratibha and PNB Saraswati. But our prime objective is not to go for the name but to know where we can get maximum at the minimum interest rate. Let us compare among the prominent loan providers
Contact the B school campus branch of the bank first. Banks situated in the B school campus have all the relevant details and are more expert in the job. They can issue in-principle sanction letter for the loan amount with all the terms and conditions written therein. You may approach the nearest branch to your residence to get the loan disbursed. Most of the banks have centralized processing centers to sanction the loans. They then direct the concerned branch to release the funds.
Most banks provide an online application with support. After you complete the application form, a bank representative visits your house and collects the application and required supporting documents. A credit team reviews and approves the loan or asks for additional information. Once you sign the education loan agreement, the bank deposits the loan amount in the required bank account.
Go to the bank in your city where you or your family member have an account. Apply for education loan. Every bank has their own loan terms, repayment duration, and Interest rates. Interest rate can be floating or fixed. Floating means Interest rate keeps changing according to the rate cut by RBI. Fixed means your Interest will not change for the entire duration of amortization. Prefer Fixed.
Today normal MBA college fee in India is 12–18 Lakh. It’s easy to get a loan of amount 10lakh or less. So, apply for loan 10lakh or less for quick and easy sanction. The one that gives you the maximum loan at minimum fixed interest shall be preferred. Repayment duration totally depends upon your paying capacity in the future.
Normally for 10 Lakh loan, you will end up paying around 16Lakh at 10% interest rate. This means you will pay 17,000 Rs every month for 8 years, once you get postgraduate. The duration of this loan is 10 years. First 2 years, one has to pay only interest and after that, you have to pay EMI + INTEREST for the next 8 years. Once you finalize this basic thing, other Bank documentation instructions will be given by bank officials. And after completing all the formalities, you will get check for your 1st college Instalments.
MBA education fee in India could be anywhere between Rupees 5 to 20 Lakhs – an amount high enough to get students thinking and plan their finances. But money isn’t something that should stop anyone from getting into their dream B-school, and that’s why it’s time to turn that dream into a reality through an education loan. Thanks to education loans offered by banks and financial schemes of the government, those bright students even from low-income families who can achieve the desired independence and fund their education.
Today, loans for MBA courses are available with almost all major banks. Some banks even have tie-ups with some of the premier institutes. These banks offer the students a special rate of interest which is normally lower than the market rate of interest. You might feel a little apprehensive that education loans are complicated monsters. But worry not. During your ‘free-time’ after you’re done with MBA applications and are awaiting your offer letter anxiously, make use of this in-between time to research thoroughly about education loan options.
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