KNOW ALL ABOUT EDUCATION LOANS FOR MBA IN INDIA

A Master in Business Administration is the most coveted degree for students and working professionals, but not everyone can afford the high MBA program fee. Top B schools’ MBA or PGDM program fees come around 18-25 lakhs, and for the other mid-range schools it may come around 8-12 lakhs. Apart from tuition fees, there are separate expenses for boarding and lodging, books, stationery etc., that make getting an MBA degree expensive.

MBA education loan is one of the most sought financing options to meet not only the tuition fees but all the other extra expenses that come with the two-year program. Many financial institutions in India readily comes forward with its different education loan schemes for MBA aspirants. It is just a matter of considering it as a long-term investment and making a well-informed choice.

We intend to make you aware of the MBA education loans in India, to help you in any possible way in making that intelligent choice. Here are a few things to keep in mind while looking for MBA education loans in India:

 

Eligibility criteria:

To qualify for an education loan, first of all you need to be a citizen of India; and secondly, you should already have secured a seat for MBA in the selected college. The applicant should have a co-borrower who acts as a guarantor for the loan.

RBI has not set any upper age limit to avail MBA education loans, however, some banks do have an upper age limit of 35 years.

In case if you procure a seat in the IIMs or other top-tier premier B schools, availing of an education loan is way easier. In fact, the rate of loan interest for these B schools is also less compared to other colleges.

 

Education Loan Options:

First, you need to understand the fee structure of an MBA study program well and based on that you take an education loan. There are a number of banks in India that provide education loans. In the public sector, there is the State Bank of India, Canara Bank, Punjab National Bank etc. In the private sector, there are banks like ICICI Bank, Axis Bank, Kotak Mahindra Bank and many more. Apart from the banks, there are non-banking finance companies like Credila, Avanse, InCred and Auxilo.

These different financial institutions have different rates of interest, the maximum amount of loan that they can provide, tenure of repayment. So, it would be best to research all these beforehand while choosing an education loan.

 

Making smart choices:

Look for ways to make the brunt of the loans less burdensome. As much as many people prefer collateral-free education loans, but due to the risks associated with these loans banks often charge higher rates of interest compared to education loans secured by collateral. Try repaying the amount of simple interest on your education loan during the course period itself as after one year of course completion the interest starts compounding.

 

Loan Repayment Plan:

Another way to avoid paying excessive amounts of compounded interest amounts is to opt for a shorter repayment period. The longer the repayment period, the more burden it on you to pay the excess amounts in interest. That is why some banks tactfully lure you by giving you longer repayment periods. Have a clear-cut loan repayment plan to avoid falling into a debt trap or falling under the burden of excessive accumulated interest amount. Consider these things while you are choosing to study an MBA program at a leading Business School in Kolkata.

 

Important tips that you need to be aware of:

1.       Make an estimation of the total expenses you may incur during your two-year study program. Apart from tuition fees; take boarding and lodging, books and stationery, computer expenses etc., into consideration too.

2.       Get an education loan with a cap that would cover all your expenses, because when you fall short of funds for your expenses, you do not want to look for a different loan for the other expenses and fall under the trap of multiple debts.

3.       Always make sure to compare the different education loan schemes of different banks. The rate of interest, loan amount, margin money, tenure of repayment, processing fees, need for collateral etc., vary from one bank to another.

4.       Keep an eye on the change in the interest rates for floating rate of interest. Many times, banks fail to implement the reduction in base rate change but remember to change in case of an increase.

5.       Check your monthly statements to see if the interest charged during the moratorium period is in simple interest or compounded interest.

6.       Concessional rate of interest is applied on educational loans given for girls. Find out which banks provide a lower interest rate. Similarly, people with prior work experience of 2-3 years have an interest concession on the education loan amount.

 

Calcutta Business School:

Calcutta Business School (CBS), founded by the Shikshayatan Foundation and located in a sprawling 15-acre residential, eco-friendly campus, is one of the top management colleges in Kolkata. 

Being an autonomous institute, we offer an AICTE approved 2-year full-time Post-Graduate Diploma in Management (PGDM) and Management Development Programs (MDP). Our smart campus provides a holistic environment for the development of students and provides avenues for their growth.

Join CBS PGDM courses and build an impressive career!