Education Loan for MBA in India: The Complete Guide

  • By Christy J. Varghese
  • 27 July 2022
Education Loan for MBA in India: The Complete Guide

The education loan for MBA in India is highly attainable today. Since MBA is a highly competitive degree programme sought-after by millions of aspirants every year, banks and NBFCs have both stepped up as lucrative loaning options for students. Besides, you can take a wide range of different loans to pursue an MBA in a reputed and recognised B-school such as the IIMs, etc. 

Fee Structure of IIMs & Other Top MBA colleges: Check First

Before you apply for an education loan for MBA, you should first be aware of the admission fees and course fees. Given the high fees of MBA colleges in India, it is clear that without an education loan, it gets challenging to enrol into an MBA programme from IIMs and other top business institutes without an education loan.

MBA College

Fee Structure (in Lakhs)

                                       IIM Ahmedabad

23.00

                                        IIM Bangalore

23.20

                                        IIM Calcutta

22.60

                                        IIM Lucknow

19.25

                                        IIM Kozhikode

20.50

                                        XLRI Jamshedpur

23.60

                                        MDI Gurgaon

21.34

                                        IIFT Delhi

18.25

                                        SIBM Pune

20.72

                                        SPJIMR Mumbai

19.001

                                        IMI New Delhi

19.25

                                        IMT Ghaziabad

19.53

You should also check the loan surcharges and other fees involved with respect to the loan. Moreover, you must also have the education loan eligibility for MBA at these institutions. 

MBA education loan options

It is also integral for aspirants to know about options for taking an  education loan for MBA. The average fee for an MBA course ranges between 3 lakhs to 20 lakhs per annum and is the highest for top B-schools. Banks offer education loans under different schemes, which students can avail of under the banks' terms and conditions. 

Education loan for MBA by public sector banks

The following is a list of banks offering education loans for MBA and their prominent characteristics:

State Bank of India (SBI)

 The following education loan schemes are offered for an MBA pursuant:

  • The SBI Scholar Loan Scheme is offered to students who wish to study in selected 120 premier Indian institutions.
  • The SBI Student Loan Scheme is offered to students who have already gained admission to courses in India or abroad.
  • The SBI Global ED-VANTAGE Scheme is offered exclusively to students who intend to pursue full-time courses in universities outside India.

ICICI Bank

ICICI bank offers education loans up to an amount of 1 crore INR. No margin money is needed for loans up to INR 20 lakhs.

  • No restrictions on pre-payment or part payment
  • Student exchange travel expenses, laptop expenses etc. are covered
  • Pre-visa disbursal for candidates applying overseas
  • Minimal documentation needed along with an added percentage of no collaterals or securities for loans up to INR 7.5 lakhs
  • No processing charges 
  • No foreclosure penalty
  • Fast processing

Oriental Bank of Commerce

This scheme is characterised by maximum benefits, affordable terms and easy conditions.

  • A 15% margin is charged for loans above INR 4 lakhs.
  • The upper limit is INR 200 lakhs.
  • A 0.50% concession is provided to female candidates.

Allahabad Bank

The education loans by Allahabad  Bank are provided to students securing admission in premier institutes only. The upper limit for a loan is INR 75 lakhs.

  • Zero margins for a loan up to INR 4,00,000
  • 0.5% rebate on ROI for female candidates
  • For IIMs, ISBs, and XLRI, the base rate for interest is +1.50%.
  • For IITs, BITS, and other prestigious institutes, the base rate is +2.0%.
  • For NITs and that level of premier institutes, the interest rate has a base rate of +2.5%
  • For all other institutes, the interest rate is base rate 3%.

HDFC Bank

HDFC bank offers two types of education loan schemes, one for students pursuing education in India and the other, for students going abroad. The education loan for foreign education is offered under Credila. However, both these schemes boast attractive rates of interest.

  • A maximum of INR 10 lakhs is available under the Education Loan for Indian Education scheme.
  • Out of 10 L INR, a maximum of INR 7.5 L is unsecured. For an amount higher than INR 7.5 L, applicants are required to provide collateral.
  • The maximum tenure for Education Loan under the Indian Education scheme is 15 years.
  • Applicants may avail themselves 100% of the educational expenses if they’re applying for the Foreign Education scheme
  • Applicants enjoy tax benefits on both schemes.

Bank of Baroda

Bank of Baroda offers multiple education loan schemes to students for pursuing MBA courses in India and abroad. The following are the education loan schemes offered:

  • Baroda Gyan (for higher studies in India) 
  • Baroda Scholar is offered to students aspiring to study abroad.
  • Baroda Education Loan to Students of Premier Institutions: This is offered to students aspiring for programs in institutions stipulated in List A and List B of the scheme.
  • The upper limit for the loan amount available under the Baroda Gyan Scheme is INR 10 lakhs. There is no margin for a loan amount of up to INR 4 lakh. For a loan upward of 4 lakhs INR, the margin is 5%.
  • For Baroda Scholar, the upper limit is INR 60 lakhs for institutions under List A and List B of the scheme. The scheme offers a maximum amount of INR 40 lakhs for colleges not under institutions in List A and List B.
  • Baroda Education Loan to students enrolled in MBA programs in premier institutions under List A may be the amount of up to INR 15 lakhs without security and up to INR 30 lakhs. 
  • It offers up to INR 7.50 lakhs without security and up to INR 30 lakhs with collateral for pursuing an MBA from institutions under List B of the scheme. 
  • Up to 30 lakhs INR without security is offered to applicants enrolled in MBA at IIM-A, IIM-B, IIM-C, and XLRI.
  • The tenure for a loan of up to INR 7.5 lakhs in 120 months maximum. The tenure for a loan amount higher than that is a maximum of 180 months.

Education loan for MBA by private banks & NBFCs

Many NBFCs, such as capital firms, insurance giants and private entities, also provide educational loans. The list of the few top education loan providers is listed below:

  • Tata Capital 
  • InCred 
  • Credila
  • Credence
  • DHFL Avanse

Most of these organisations have online websites that the aspirants can check to know more information about them. 

How to reduce MBA study expenses

It is useful to economise when you are pursuing your MBA. The following are things to keep in mind.

  1. Apply for a scholarship(s) and negotiate the cost of studying: There are business schools that may offer you discounts, scholarships, fee waivers etc. if you can avail all the options that you get, your financial burden may get significantly reduced.
  2. Save on international tours: many business schools have started foreign study tours to business schools abroad or encourage students to apply to international exchange programmes. The expenditure for these programs runs in lakhs. The value of these temporary international programs is usually not worth the investment.

5 Tips to secure MBA loans

MBA full form is Master of Business Administration. The given checklist will be useful to you for choosing a bank or scheme for MBA loans. 

  • Evaluate Interest Rate Structure so that you do not have to pay more than the base rate or hidden interest rates. You would benefit by finding a bank that does not charge processing fees.
  • Calculate your overall expenses and periodically keep updated on the payment of the EMI amount.
  • Look for an option that allows you to repay after landing a job. This will release the stress of EMIs during the learning duration.
  • Compare MBA Funding Schemes of Different banks and financial institutions. Opt for the one that is the cheapest and comprehensively settles your needs.
  • Ask the institution of your choosing about details of the education loans supported for the B-school.

Conclusion

While MBA is one of the most popular courses at the postgraduate level in India, it is also an expensive and highly competitive discipline. Education loans are one of the best way-outs to finance education through the learning years. It helps fund college tuition fees without an added headache. Many options are available that allow repayment after getting a job as well. Sunstone is one such platform on which there is a range of financing options alongside getting mentorship for the industry’s top experts. 

About Sunstone

Sunstone is a leading higher education services provider that works with academic institutions in upskilling students for employability. Sunstone offers career-oriented training interventions for undergraduate and postgraduate students at 40+ institutions across 30+ cities.

Sunstone’s training programs are industry-endorsed to enhance employability. These programs are designed for hybrid delivery with an unparalleled focus on soft skills and personality development. Sunstone’s focus is to provide students with a holistic educational experience.

Frequently Asked Questions

Is an education loan available for MBA?

Yes, education loans are available for MBA aspirants.

Which bank gives an MBA loan for education?

Several banks and financial institutions give education loans. These include banks such as SBI, ICICI Bank, HDFC Bank and non-banks such as Credillia, InCred, etc. 

Is an education loan available for management students?

Yes, there is a plethora of loan options available for management students. Both banks and NBFCs have several schemes that support all types of MBA funding requirements.

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