Education Loan For MBA in India 2024: Public & Private Bank Loan Schemes

Higher studies in India can cost excessive rates; however, it depends on the colleges. To cope with the growing fees, there are various financial institutes that offer education loans for MBA in India. MBA course is preferred by most youngsters globally.

Financing options to pursue the expensive MBA courses are needed for getting admission to top MBA colleges. It becomes difficult to pursue an MBA without finding ways to fund your MBA program and additional costs and expenses that should also be considered equally.

Also, Read on MBA Admission Process

Education Loan for MBA in India

The education loan for MBA in India has become quite common as MBA courses influence the professional workforce in the country with higher pay grades which will ultimately increase the tax generation for the country. In 2018, there was an inflation of 10 to 15% in the education loan and now it has stably increased to 22%. 

The applicants can apply for an education loan with public or private sector banks or approach lenders to facilitate their higher education. But, there is another method of pursuing management education that is, the MNC sponsors their higher education to support the managerial positions in the firm. Usually, the applicants will be signing a bond for a specific number of years to work under the same MNC to contribute to the growth of the company using the education sponsored.

Banks Offering Education Loans for Pursuing MBA 

At present, MBA is one of the most popular courses in India and is being pursued by lakhs of students per year. The average fee for an MBA course annually ranges between 3 lakhs to 20 Lakhs and is higher for any good-ranking college.

And there the banks come into the picture where they offer education loans under different schemes, which can be availed by the students under the terms & conditions given by the banks.

Here are a few banks and education loans offered with the features. 

State Bank of India (SBI)

This bank offers some of the best education loan schemes in India. For MBA courses, the following education loan schemes are offered:

• SBI Scholar Loan Scheme – It is offered to people who wish to study in selected 120 Premier Indian Institutions.
• SBI Student Loan Scheme – It is offered to people who have already got admission to a course in India or abroad.
• SBI Global ED-VANTAGE Scheme – It is offered exclusively to people who want to pursue full-time courses in universities outside India.

Read More: SBI Education Loan

ICICI Bank

ICICI bank offers education loans up to INR 1 Crore, and there is no margin money needed for loans up to INR 20 lakh.

Other key features of ICICI Bank Education loan are,

• No restrictions on pre-payment or a part payment
• Other expenses like student exchange travel expense, the laptop also covered
• Pre-visa disbursal for students applying for education overseas
• Preferential forex rates for international disbursements
• Minimal documentation along with an added percentage of no collaterals or securities for loan up to 7.5 lacs
• No Processing Charges; No Foreclosure Penalty
• Faster Processing and Easy Documentation

Read More: ICICI Education Loan

Oriental Bank of Commerce

The scheme is extended with maximum benefits, affordable terms, and easy conditions to follow.

• 15% margin is charged for a loan above INR 4 Lakhs.
• The maximum loan limit is INR 20 Lakhs.
• 0.50% concession to girl students

Allahabad Bank

The Education Loan is extended to students securing admission in premier institutes

• The maximum loan limit allowed is INR 75 Lakhs
• Zero-margin for a loan up to INR 4 Lakhs
• 0.5% rebate on RoI for female applicants.
• For IIMs, ISBs, and XLRI the interest rate is base rate +1.50%.
• For IITs, BITS, and other premier institutes, the interest rate is base rate +2.0%.
• For NITs and other reputed institutes, the interest rate is base rate +2.5%.
• For other institutes, the interest rate is base rate 3.0%.

Also, Check: Top 5 Banks Offering Education Loans Without Collateral

HDFC Bank

This bank offers two different education loan schemes. One is for pursuing education in India and the other one is offered for pursuing education outside India. The Education Loan for Foreign Education is offered under Credila by HDFC Bank. Both these loans are offered at attractive rates of interest.

Features and Benefits:

• A maximum of Rs.10 lakhs can be availed under the Education Loan for Indian Education scheme. Out of this Rs.10 lakhs, a maximum of Rs.7.5 lakhs is unsecured and for the amount exceeding Rs.7.5 lakhs, applicants have to provide collateral.
• The maximum tenure for Education Loan for Indian Education scheme is 15 years after the moratorium period.
• Applicants can avail 100% of the educational expenses as a loan from the Education Loan for Foreign Education scheme.
• There is no margin on the Education Loan for Foreign Education scheme and the loan is sanctioned prior to admission.
• Applicants can enjoy tax benefits on both schemes.

Bank of Baroda

This bank offers multiple education loan schemes to students for MBA courses in India and abroad, the following are the education loan schemes offered at Bank of Baroda:

• Baroda Gyan (for higher study in India) – Offered to students aspiring to study in India.
• Baroda Scholar – Offered to students aspiring to study outside India.
• Baroda Education Loan to students of Premier Institutions – Offered to students aspiring to pursue courses offered by institutions mentioned in institution List A and List B of the scheme.

Features and Benefits:

• The maximum loan amount available under the Baroda Gyan scheme is Rs.10 lakhs. There is no margin for a loan amount of Rs.4 lakhs and for a loan amount of more than Rs.4 lakhs, the margin is 5%.
• Baroda Scholar offers a maximum loan of Rs.60 lakhs for colleges mentioned in institution List A and List B of the scheme. The scheme offers a maximum loan of Rs.40 lakhs for colleges not mentioned in institutions List A and List B.
• Baroda Education Loan to students of Premier Institutions up to Rs.15 lakhs without security and up to Rs.30 lakhs with collateral for pursuing MBA from colleges mentioned in institution List A. It offers up to Rs.7.5 lakhs without security and up to Rs.30 lakhs with collateral for pursuing MBA from colleges mentioned in institution List B. It offers up to Rs.30 lakhs without security for pursuing MBA from IIM-A, IIM-B, IIM-C, and XLRI.
• The tenure for a loan of up to Rs.7.5 lakhs is a maximum of 120 months and the tenure for a loan of more than Rs.7.5 lakhs is a maximum of 180 months.

Read More: Bank of Baroda Education Loan

Public and Private Bank Education Loan Details

These banks avail loans to students who want to pursue MBA both in India and abroad.

Education loans and their processing fee in public banks are given below.

The applicants can check the list of private banks that offers education loans with the latest interest rates. 

Education Loan for MBA in India: Eligibility Criteria

These are some of the eligibility criteria for taking an education loan for MBA in India. The applicants are required to take note of the following. 

• The applicant must be an Indian citizen and resident. 
• The applicant must have secured a seat with the MBA colleges by writing the entrance exam in selected colleges. 
• RBI has no age limit for education loans for MBA but some banks have a restriction of 35 years of age. 
• Collateral has to be offered to the applied banks.  

How to Take an MBA Education Loan?

Every college is affiliated with giving information on the different banks that offer loans. But there are no steps given that help in making and understanding the procedure easily.

Below are the steps explained for taking a loan for MBA:

• Step 1: After researching and referring to catalogs, it is very important to compare the different rates of different banks.
• Step 2: After aspirants choose the bank of their choice, they can either pay a visit to the bank or fill an application on the bank's website.
• Step 3: After the application is filed, students receive a call from the respective bank; it could be a representative who would ask for details and requirements of the aspirants.
• Step 4: Students are asked to visit the bank with the required documents. The students can also take their guardians as it would be helpful for understanding.
• Step 5: The aspirants are asked for every document to be submitted to the bank post, where there is a review of the documents done by the bank.
• Step 6: The bank then sends the verified procedure and documents in a mail, after which the bank approves the loan.
• Step 7: The banks then verify certain criteria with the college the aspirant would be admitted to.
• Step 8: After the loan approval, the amount is deposited into the institute's account. In some cases, it may be deposited into the student's account as well.
• Step 9: If there is any excess usage of the amount, students will be required to provide bills and receipts to redeem the same.

Documents Required for MBA Education Loan

These are some of the documents required for MBA education loan disbursement. The applicants are required to keep the list of documents ready to quickly process the loan amount.

Student-Applicant

• Proof of Identity - Aadhar, PAN card, Voter’s ID. (Any one)
• Proof of Residence/ Address: Passport mandatory in case of Studies Abroad (Any one)
• Academic Records:
  • 10th Result & 12th Result, Graduation Result- Semester-wise (if applicable)
  • Entrance Exam Result through which admission is being taken (e.g. CAT, CMAT, JEE, NEET, CET, GMAT, GRE, TOEFL, etc.)
• Proof of admission: Offer Letter or Admission Letter from the Institution. Conditional admission letter may be considered in case of studies abroad.
• Statement of cost of study
• College or Course prospectus (if available)
• 2 passport-size photographs
• Account statement for last 1 year in case of any previous loan from other Banks.

Co-applicant/Guarantor

• Proof of Identity: Aadhar, PAN, Voter’s ID (Any one)
• Proof of Residence/ Address: Residence card or Ration Card.
• 2 passport-size photographs
• Account statement for last 1 year in case of any previous loan from other Banks.

Income Proof for Salaried Co-applicant/ Guarantor

• Salary Slip or Salary Certificate
• Copy of Form 16 and IT Returns acknowledged by IT Dept.
• Bank account statement for last 6 months of the Salary Account.

Income Proof for Self-employed Co-applicant/ Guarantor

• Business address proof (If applicable)
• IT Returns acknowledged by IT Dept., TDS Certificate (Form 16A, if applicable)
• Bank account statement for last 6 months

Best Way to Select the Best Bank and the Best Loan Scheme

The best way to select the bank is to compare different loan schemes available at various government and private banks that offer education loans for MBA programs.

Find the below checklist before choosing a bank or a bank scheme for pursuing an education loan for MBA.

• No margin money; the banks decide whether they can fund the entire MBA education, including tuition fee as well as other additional expenses or not.
• These expenses are called margin money which is funded by banks and would be very beneficial. Finding the bank that does not charge Loan Processing fees, these charges by banks can differ from INR 4000 to INR 5000 which is also a loss for the students. So find a bank that does not charge or charge less nominal processing fees.
• Evaluate the Interest Rate Structure so that the students do not cost more than the base rate or hidden interest rates.
• Interest during the Moratorium Period should include the MBA course duration plus the grace period granted by the bank before the repayment of the loan begins.

List of Top Colleges for MBA in India with Fee Structure

Various colleges have some good courses and syllabi when it comes to MBA programs. Below are a few institutes or colleges that have vivid subjects for students to explore.

Why Education Loan for MBA?

Education loan to pursue MBA is the economical way of taking an education. However, due to the gaining number of MBA aspirants, MBA programs in reputed colleges cost hefty. The students who cannot finance the fees from their parents have to find an alternative option to fulfill their dream of pursuing an MBA.

The importance of education loans for MBA are,

• Affordability
• Best Financial Option
• Alternative Way of Fulfilling Dreams

Affordability

The most affordable MBA program costs lakhs. IIMs have a fee structure around INR 13 lakhs to INR 23 lakhs. The top Business Schools also have a fee structure between INR 10 lakhs to INR 20 lakhs. Apart from this, students should also consider the hostel fees, project costs, and personal expenses. So to be doubt-free and relaxed during an MBA program, funding an MBA program is as important as getting an admission.

Best Financial Option

The best option for financing your MBA program is to opt for an economically viable educational loan. Educational loans for professional programs can be availed from many banks, private or public sector banks. Many banks in India offer education loans for MBA abroad as well. Many banks in India offer education loans to students for pursuing MBA in India and abroad. And offer various schemes for education loans for Distance MBA also. So choosing the right bank and right loan scheme is essential in availing an educational loan for an MBA.

Alternative Way of Fulfilling Dreams

MBA Education is an expensive program, and financing the program is an equally challenging task to secure a seat in one of the top MBA colleges of India. Therefore, when it comes to funding an MBA, be it in India or abroad, educational loans are the most preferred and viable option to manage the program's financing.

However, like any other loan lending, borrowing money has risks alongside it, and MBA education loans are no different. There are many risks involved even in an MBA education loan, which can haunt you during your MBA program period or after graduating, so how to get the best education loan for MBA in India.

Expenses Covered under Educational Loan

Apart from just the cost for the course, the Education Loan amount covers a list of related things too.

Here's the list of what the loan amount will cover:

• Tuition fees
• Hostel fees/housing
• Examination, laboratory, library fees
• Insurance Premium
• Travel expenses for students studying abroad
• Cost of books, uniform, equipment, instruments
• Cost of gadgets required for the completion, of course, such as computers, laptops.
• Other study-related expenses such as study tours/project work