Today, every student dreams of getting a good job and touching heights in his career. MBA i.e. Master of Business Administration is a professional course that gives a new direction to your career.
But the fees of this course are very high, and it is not easy for everyone to pay it immediately. In such a situation, education loan becomes a very good option. In this article, we will tell you how to take education loan for MBA and what things to keep in mind.
What is Education Loan for MBA?
Education loan for MBA is a financial assistance that banks or financial institutions provide to students to meet their study expenses. It includes tuition fees, hostel fees, books, laptop and other educational expenses.
You can repay this loan in easy EMIs after completion of studies. Many banks do not charge loan installments during studies, so that there is no financial pressure on the student during studies.
Eligibility for MBA Education Loan
If you want to pursue MBA from a recognized institute in India or abroad, you may be eligible for an education loan. For this, you need to score well in a prestigious entrance exam like CAT, XAT, MAT, GMAT etc. Along with this, the placement record of that institute is also important. Some banks ask for a cosigner or guarantor, especially when the loan amount is high.
How to Apply for MBA Education Loan?
Taking an education loan for MBA has now become much easier than before. First of all, you have to select the bank or NBFC (non-banking financial company) that provides education loan. Then you have to fill their application form which mentions your personal information, educational details, admission letter of MBA college and loan amount.
After this, you have to submit the necessary documents like identity card, residence proof, previous academic records, admission letter, course fee receipt etc. The bank approves the loan after checking your eligibility and documents.
Nowadays many banks are also providing the facility of online application, so that you can apply for a loan even while sitting at home.
Interest Rate and Payment Process of MBA Education Loan
The interest rate on MBA education loan varies according to different banks and institutions. Some banks also provide the facility of lower interest rates to women and meritorious students. The average interest rate can be from 8% to 14%.
EMI is usually not required to be paid during studies, this is called ‘moratorium period’. This period is for the duration of your course and after that for 6 to 12 months. After this, you have to repay the loan in the form of EMI every month. If you want, you can also repay the loan before time and some banks do not charge any additional fee for this.
From Which Banks Should You Take MBA Education Loan?
Almost all major public and private banks in India offer education loans for MBA. Such as State Bank of India (SBI), Bank of Baroda, Punjab National Bank (PNB), HDFC Bank, ICICI Bank, Axis Bank etc. Apart from this, companies like NBFCs like Avanse, InCred, Auxilo, Credila also offer loans for MBA.
While selecting a bank, you should thoroughly compare their interest rates, processing fees, moratorium period and prepayment terms.
Education loan for MBA abroad
If you want to pursue MBA abroad, then taking an education loan can be a little different. For this, you have to give information about passport, visa, admission letter, course fee structure, and living expenses to the bank.
Some banks or NBFCs offer loans up to a higher amount for studying abroad and some institutes also demand collateral (such as house or land). But if you have a good score and get admission in a reputed college, you can get a loan even without collateral.
Things to keep in mind while taking an MBA education loan
While taking a loan, you should read the terms and conditions carefully. What is the interest rate, when will the EMI start, if you repay the loan before time, will there be any additional charge or not – it is important to know all these things in advance.
Apart from this, try to take a loan of only the amount required so that there is no difficulty in repayment later. Make a plan to pay EMI on time so that it also has a positive impact on your credit score.
Conclusion
MBA is a great career option, but its fees can become a hindrance at times. In such a situation, education loan is a reliable way to give wings to your dreams.
If you choose the right bank, read the terms and conditions carefully and repay on time, then this loan can become a boon in your studies.
FAQs
Question 1: Is it safe to take an education loan for MBA?
Ans – Yes, it is completely safe if you take a loan from a recognized bank or NBFC and keep all the conditions in mind.
Question 2: Can I get an education loan without a guarantor?
Ans – Some banks offer loans without a guarantor to students with good colleges and scores, but a guarantor may be required for higher amounts.
Question 3: Do I have to pay EMI during studies?
Ans – No, there is no need to pay EMI during studies. EMI starts after a certain time after the course is over.
Question 4: How much time is available to repay the MBA education loan?
Ans – Most banks offer a time period of 5 to 15 years in which you can repay the loan in easy installments.
Question 5: Can I compare bank interest rates before taking a loan?
Ans – Yes, you should so that you can choose the option with low interest rate and convenience.
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