MBA happens to be the most in-demand postgraduate degree around the world these days with aspirants increasing every year. It is a dream of many ambitious students to pursue MBA abroad but finances come in their way. Keeping this in mind, B-schools abroad offer an array of financial aid opportunities to outstanding applicants to welcome them aboard. One of these ways to pay for an MBA abroad is to avail a student loan. While offering loans, banks give preference to job oriented courses therefore an MBA degree easily qualifies for education loans.
Curious to know about education loan for MBA abroad? You have come to the right place. Here is a detailed blog on loan for MBA abroad along with details of leading banks and NBFCs, eligibility, how to apply, collateral, etc.
How to Finance Your MBA Abroad?
This happens to be one of the most asked questions among students considering an MBA abroad. Being one of the most expensive programs in the world, MBA aspirants are concerned about their finances and look for ways to reduce their financial burden. While scholarships happen to be the best option because there is no repayment required, it is practically not possible for all students to get one. Therefore, the next best option to finance your MBA abroad is to apply for a student loan for MBA abroad.
Several banks as well as NBFCs in India offer education loans under specific conditions to students for pursuing MBA in India or abroad. Some of the most popular non-banking financial companies (NBFCs) include Avanse, Credila, Tata Capital, InCred, Global Student Loan Corporation, etc. that provide a student loan for MBA abroad.
You can get 2 types of loans: either a collateral loan or non-collateral loan. Let us discuss this in detail:
Collateral for Education Loan for MBA Abroad
Non-collateral loan is simply where you do not have to provide any security for getting a loan. If you didn’t know, collateral for education loans refers to any security that you offer to the bank against a loan to reduce the risk of non-repayment. Now, if you want to know what qualifies as collateral for an education loan, you can provide FD, bank deposits, bonds, property except agricultural land, gold, life insurance policies, shares, etc. Few points that you must take note of are:
- You can avail a loan of up to 4,00,000 INR without any collateral.
- For loans up to 7,50,000 INR, there is no need of a collateral but instead your parents will be made joint borrowers with a third party guarantor.
- Education loans above 7,50,000 INR require collateral.
- As you might know, students can avail loans up to 1,50,00,000 INR in India.
- The interest rates for collateral loans from public loans is between 7.6-9% and 10.5% for private banks.
Eligibility Criteria for Education Loan to Study Abroad
Thinking about whether you are eligible to get an education loan for MBA abroad? Take a look at the eligibility criteria to apply for education loans:
- You must be a citizen of India.
- You must be at least 18 years at the time of application.
- You must have completed graduation with at least 60%.
- At the time of application, you must have an admission offer from a foreign institution.
Documents Required for Education Loan to Study Abroad
You will have to provide the banks with a list of documents mentioned below to apply for loan for MBA abroad:
- Completed loan application
- Academic records up to most recent education
- Letter of admission
- PAN card
- Aadhar card
- Voter ID
- Passport size photographs
- Proof of residence
- Bank account statement from last 6 months
- IT return statement
Application Process for Education Loan for MBA Abroad
Applying for an education loan for MBA abroad has become easy especially because the application process has become online. This means you can apply for a student loan at the comfort of your home by providing all necessary details and documents asked during the process. Here is the step-by-step process to apply for MBA abroad loan:
- The first step is to look for banks or NBFCs that provide loans for the program you wish to apply for.
- You will also have to determine what amount of loan is required for your chosen program before applying for it.
- Before finalizing your application, it is best to compare available options in terms of maximum loan amount, interest rate, collateral, etc.
- Once you have made your choice, submit the loan application form either online or in person and wait for the intimation.
- Make sure you are applying for a loan well in advance as the application processing time varies from bank to bank and may delay the procedure.
- You will be asked to submit necessary documents and complete the formalities related to the loan document.
- Once approved, the bank will automatically forward the amount as asked by the university in your name.
Top Banks and NBFCs in India for Education Loan for MBA Abroad
Here is a table showing top banks in India for education loan for MBA abroad with details on loan amount, interest rate, loan margin and tenure:
Name of Institution
State Bank of India
Punjab National Bank
Oriental Bank of Commerce
Bank of Baroda
Among NBFCs, the top 3 include Credila, Avanse and InCred. So let us take a look at the details of MBA abroad loan provided by them:
- This is provided by HDFC bank and was the first student education loan providing platform.
- You can avail need-based loans starting from 1,00,000 INR.
- You can get loan approval from Credila before getting an offer for admission.
- There is a floating interest rate on the loan.
- It can be repaid within 10 years.
- There is no loan margin.
- Counts among the leading NBFCs for education loans.
- Loans above 1,00,000 INR are offered on the basis of need.
- The loan can cover 100% of the course expenses.
- The repayment period is 10 years.
- The interest rate is determined on the basis of base rate plus credit profile.
- InCred provides unsecured loans upto 40,00,000 INR and secured loans up to 1,00,00,000 INR.
- The repayment period is 10-15 years.
- Interest rates start from 12% based on various factors including collateral, credit profile, course and others.
- No loan margin is applicable.
This was all about a loan for MBA abroad. A MBA abroad loan is a much feasible option because it also covers living expenses which is not the case even for scholarships. It is hard to find fully funded scholarships which makes students believe it is a myth. Although fully funded scholarships are a reality, it is also true that they are extremely competitive and limited which again tells us why loan for MBA abroad is important. Apply for loans at banks you find feasible and you will definitely get one that will cover the entire expenses of your MBA abroad.
Frequently Asked Questions about Education Loan for MBA Abroad
Ques. Which bank is best for education loans for MBA abroad?
Ans. Some of the best banks for getting education loans for MBA abroad are HDFC Bank, State Bank of India, Axis Bank, Punjab National Bank, Bank of Baroda, Canara Bank among others.
Ques. Who is eligible for an education loan for MBA?
Ans. To be eligible for an education loan for MBA, you must be at least 18 years old at the time of application, completed a bachelor’s degree with good results and must secure an admission offer.
Ques. Can I get a loan of 20,00,000 INR without collateral?
Ans. No, you can only get a loan up to 4,00,000 INR without collateral.
Ques. Is it possible to get a student loan without interest?
Ans. No, there are no student loans available without interest. Instead of education loans, you can apply for various scholarships.
Ques. Can I take 2 education loans?
Ans. Yes, however surprising it may sound, you can take 2 education loans from the same or different banks given they satisfy the criteria for a second loan.