Student Loan for MBA

Pursuing an MBA is a strategic move for professionals seeking to elevate wealth of career opportunities and skill development, making it one of the smartest investments for your future. Students dedicate years preparing for various exams in order to secure admission to top universities for an MBA program. However, one of the biggest challenges of many prospective MBA students is determining how to finance their education. The steep cost of an MBA, typically ranging from ₹10 lakhs to ₹25 lakhs, is widely acknowledged as a significant factor contributing to students leaving away the dream of pursuing this course.

Why let financial constraints stand in the way of achieving your goals and pursuing your aspirations? Instead of being stuck in a dilemma over the daunting fees, there are plenty of ways to make your dream a reality without draining your bank account. There is a wide range of educational loans available, specifically designed to support MBA students. These loans come with special interest rates, typically lower than the prevailing market rates. They also offer extended repayment periods, ensuring the loan doesn’t become a financial burden on students.

Read on to discover more and take the first step towards making your dreams a reality!

Top Private Sector Banks Offering MBA Education Loans

Here’s a list of some of the top banks providing education loans for MBA.

HDFC Bank Education Loan

If you’re looking to finance your MBA education, HDFC Bank offers a comprehensive education loan package tailored to meet your needs. With loan amounts up to ₹1.5 crore and preferential interest rates for top institutions. A repayment tenure of up to 15 years and minimal documentation, this loan is designed to make financing your MBA easier. Enjoy benefits like tax savings and insurance coverage to ensure a smooth and secure educational journey. Read below for more details about the HDFC Bank education loan.

    1. Loan Amount
      • Get up to ₹1.5 crore as an education loan
      • Avail loans of up to 50 lakh without collateral for select Institutes
    2. Loan Processing Fees (Non-refundable)
      • No charges
    3. Interest Rate
      • Current repo rate by RBI + Spread (starting from 10.50% p.a)
      • Nil for loan amounts up to ₹7,50,000
    4. Loan Tenure
      • Up to 15 years
    5. Collateral Information
      • Residential Property, HDFC Bank Fixed Deposit, select Debt Mutual Funds, Insurance Policies and NSC / KVP
ICICI Bank Education Loan

You can also consider the ICICI Bank Education Loan to finance your MBA studies. They offer loans up to ₹1 crore for domestic courses and ₹3 crore for international courses, with collateral-free loans available for amounts up to ₹1 crore. This loan provides comprehensive financial support throughout your education, with a straightforward application process, minimal documentation, and no hidden charges, making it an ideal option for funding your MBA.

    1. Loan Amount
      • Domestic studies – Up to ₹1 crore
      • International studies – Up to ₹3 crore
      • ₹1 CR can be availed as an education loan for MBA without collateral.
    2. Loan Processing Fees (Non-refundable)
      • 2% of the loan amount
    3. Interest Rate
      • Current repo rate + 3.75% (Spread) onwards
    4. Loan Tenure
      • Up to 10 or 12 years
    5. Collateral Information
      • Property i.e. House or Flat, Fixed Deposit, Existing ICICI Bank Home Loan for cross-collateral.
IDFC FIRST Bank Education Loan

IDFC FIRST Bank brings fully digitized and customized education loans for every student’s unique needs. In addition to the academic expenses (tuition, hostel, exam fee etc.), the student loan provides financial coverage for additional expenses such as laptop, insurance, travel and others. Here’s more about IDFC FIRST bank educational loan.

    1. Loan Amount
      • Domestic studies – Up to ₹1 crore
      • International studies – Up to ₹3 crore
      • ₹1 CR can be availed as an education loan for MBA without collateral.
    2. Loan Processing Fees (Non-refundable)
      • Up to 7.5 Lacs – NIL
      • Above 7.5 Lacs -Up to 1.5%* of the Loan Amount 
    3. Interest Rate
      • ROI Starting from 9.5%*
    4. Loan Tenure
      • Flexible loan tenure up to 15 years
    5. Collateral Information
      • Collateral free loans of up to ₹75 lakhs
Axis Bank Education Loan

Student loan for MBA by Axis Bank offers comprehensive financial support, covering 100% of your educational expenses, including course fees, living expenses, and travel costs. This makes Axis Bank Education Loan highly sought after by students looking to fund their education. Here’s everything you need to know about their education loan offerings.

    1. Loan Amount
      • Minimum up to ₹50,000
      • Maximum up to ₹75 lakh
    2. Loan Processing Fees (Non-refundable)
      • 2% of the loan amount + GST
    3. Interest Rate
      • For upto ₹4 lakhs (Repo rate 6.50% + 8.70% [spread] + 15.20%  [Effective ROI linked to repo rate])
      • Greater than ₹4 lakhs and up to ₹7.5 lakhs (Repo rate 6.50% + 8.20% [spread] + 14.70%  [Effective ROI linked to repo rate])
      • Greater than ₹7.5 lakhs (Repo rate 6.50% + 7.20% [spread] + 13.70%  [Effective ROI linked to repo rate])
    4. Loan Tenure
      • Flexible loan tenure up to 15 years
    5. Collateral Information
      • Non-collateral loan is between ₹20 and ₹30 lakh
SBI Bank Education Loan

State Bank of India’s education loan scheme is designed to help students meet the costs of tuition, accommodation, and other academic-related expenses. Here’s a basic introduction to the SBI Education Loan:

  1. Loan Amount
    • ₹50 lakh for university ranked top by NIRF
    • ₹30 lakh other eligible institutions
  2. Loan Processing Fees (Non-refundable)
    • Loans up to ₹20 lakh: NIL
    • Loans above ₹20 lakh: ₹ 10,000 (plus taxes)
  3. Interest Rate
    • Current repo rate by RBI + Spread
  4. Loan Tenure
    • Loan to be repaid in 15 years after the commencement of repayment
  5. Collateral Information
    • Loans up to ₹7.5 lakhs: No collateral needed
    • Loans above ₹7.5 lakhs: A co-borrower and collateral are needed

Government-Backed Education Loan Schemes for MBA 

The Indian government is dedicated to making education more accessible by offering affordable loan schemes for students pursuing career-oriented higher education, including MBA programs. Below are some of the top education loan options for MBA students supported by the Indian government.

Pradhan Mantri Vidyalaxmi Scheme

The PM-Vidyalaxmi Scheme has been approved by the Government of India to provide financial assistance to meritorious students, ensuring that financial constraints do not hinder their access to quality higher education. Here’s a breakdown of the key features of the scheme:

  • Education loans for meritorious students who get admission in the top 860 quality Higher Educational Institutions (QHEIs) of the nation.
  • The scheme offers a unique loan product that allows students to obtain collateral-free, guarantor-free education loans.
  •  Loan amounts up to ₹7.5 lakhs will be provided a 75% credit guarantee by the Government of India, to support banks to expand coverage. 
  • Furthermore, for students with up to ₹ 8 lakhs annual family income, the scheme will also provide for 3% interest subvention on loans up to ₹10 lakh.
  • This is in addition to the full interest subsidy already offered to students with up to ₹4.5 lakhs annual family income. 
  • The Scheme is applicable for all Scheduled Banks/Regional Rural Banks (RRBs)/Cooperative Banks. 

More about:  Pradhan Mantri Vidyalaxmi Scheme.

Central Sector Interest Subsidy Scheme

The Central Sector Interest Subsidy Scheme (CSIS) is an important government-backed initiative designed to make higher education more accessible and affordable for students, particularly from economically disadvantaged backgrounds. The scheme primarily focuses on providing an interest subsidy on education loans, ensuring that students from specific categories, such as Scheduled Castes (SC), Scheduled Tribes (ST), Other Backward Classes (OBC), and Economically Weaker Sections (EWS), can pursue higher education without the financial burden imposed by high interest rates on their loans.

  • Applicable to students enrolled in professional/technical courses from NAAC accredited institutions, NBA accredited programs, Institutions of National Importance, and CFTIs.
  • The scheme is applicable to students from Economically Weaker Sections (EWS) with a parental income of up to ₹4.5 lakhs per year.
  • Education loans are provided without collateral security and without third-party guarantees.
  • Maximum loan amount is ₹7.5 lakhs.
  • The Government of India pays interest during the course period plus one year (moratorium period). After the moratorium period, the student is required to pay the interest on the outstanding loan amount.
  • Interest rates are based on the BPLR/Base Rate of individual banks and the IBA Model Educational Loan Scheme provisions.

More about: Central Sector Interest Subsidy Scheme.

IBA Model Education Loan Scheme

The IBA Model Education Loan Scheme has been established by the Indian Banks’ Association (IBA) to provide standardized education loans to students pursuing higher education, ensuring easy access to financial assistance. Below are the key features of the scheme:

  • Available for Indian students pursuing higher education in recognized institutions in India and abroad, including undergraduate, postgraduate, and professional courses.
  • Up to ₹7.5 lakhs for studies in India and ₹15 lakhs for studies abroad
  • Loans up to ₹7.5 lakhs are offered without collateral or a guarantor.
  • Competitive rates linked to Base Rate (BPLR); women students may receive lower rates.
  • Available for students with family income up to ₹4.5 lakhs per year.
  • Loans can be repaid over 15 years, with a moratorium period (course duration + 1 year).

More about: IBA Model Education Loan Scheme.

Student Loan for MBA by Public Sector Banks:

Banks Loan Amount in INR (lakh) Interest Rate (in %)
SBI 30 8.05-10.15
PNB 75 8.35-10.95
Canara Bank 40 8.65-10.75
Dena Bank 15 10-11.8
Central Bank of India 20 8.9-10.4
Punjab & Sind Bank 10 9.75-10.75
Union Bank of India 30 8.65 onwards

State-Specific Student Loan for MBA

State governments in India also provide a range of loan and credit card schemes to support students pursuing higher education. To be eligible for these schemes, applicants must hold a domicile certificate from the respective state. Below, we have highlighted some of the prominent student loan schemes specifically for MBBS students, organized by state.

How to Avoid Education Loan Rejection for MBA?

Rejection for an education loan is also highly likely, as many students make some common mistakes while applying for an education loan. Recognizing and figuring out the solution for common pitfalls leading to educational loan rejection for MBA students can aid students with obtaining the student loan. Here’s how you can avoid education loan rejection: 

  • The most crucial step while granting an education loan is maintaining a good CIBIL score. If the guarantors have a bad CIBIL score, it is highly likely for their educational loan for MBA to get rejected. 
  • Ensuring that parental income is up to the mark. If the bank finds the parents financial standing is weak, then the chance of getting your education loan approval is less.
  • Academic performance also plays a crucial role as if the scholar has a poor academic record, there is a chance that your education loan for MBA might get rejected. This happens because they think that these applicants don’t have the potential to earn enough money to pay the loan back. 
  • If the applicant is admitted to a college or institute which is not well recognized and has a poor placement record, banks might decline the education loan. 
  • If the applicant has submitted wrong documents, it can lead to the cancellation of an education loan. 
  • Many banks have a certain age criteria that the applicant must meet, not being able to be within the age limit will lead to rejection of the education loan for MBA.
  • There are more chances to get the educational loan if you are admitted to a course from which earning potential after graduation is high.

Highest and Lowest Education Loan for MBA Offered in India

There is a range of education loans offered by banks available for MBA programs, which often causes confusion for understanding which is the best option. Each bank loan offer varies as they have different repayment methods, rate of interest and collateral options etc. The most powerful influence in changing an applicant’s mind lies in the rate of interest, as this can make a huge difference in the overall sum. To make things easy for you, listed down are the highest and lowest loan rate of interest for MBA, that may suit your preferences.

Banks offering highest education loan rate of interest 

Bank Name ROI 

Kotak Mahindra Bank

11.5% – 24%

Avanse Financial Services

10% – 16.5%

Dena Bank

10% – 11.8%

ICICI Bank

10.5 % onwards
Punjab & Sind Bank 9.75% – 10.75%
Central Bank of India 8.9% – 10.4%

Banks offering lowest education loan rate of interest 

Bank Name ROI 
Axis Bank 8.8% onwards
Canara Bank 8.65% – 10.75%
Union Bank of India 8.65% onwards
PNB 8.35% – 10.95%
IDBI Bank 8.5% – 10.5%
SBI 8.05% – 10.15%
HDFC-CREDILA 6.7% onwards

Eligibility Criteria for Student Loan for MBA in India 

Every scholarship comes with a set of eligibility criteria that students must meet in order to qualify for an MBA loan. Listen below are the most important criteria to consider before availing for this loan. 

  • The applicants must be Indian nationals or Non-Resident Indian (NRI).
  • The applicant must have secured admission to a recognized MBA program.
  • Applicants should have a degree and marksheets of 10th grade, 12th grade and graduation to avail Education Loan for MBA studies.
  • The applicant must be between 18-35 years of age to apply for the student loan for MBA.
  • An MBA education loan typically requires a co-applicant, usually a parent, spouse or guardian with a stable income.
  • Proof of family income may be required to assess eligibility.
  • The applicant must be a PAN card holder. 
  • Banks offer small loans collateral-free, but typically, loans worth ₹7.5 lakhs require applicants to submit collateral.  

Also read: Details on Eligibility 

Required Documents for Student Loan for MBA In India 

Listed below are the documents that applicants need to upload while applying for an education loan for MBA.

  • Admission letter issued by the college where the applicant is admitted.
  • Entrance exam result.
  • Income proof of the co-applicant.
  • ID proofs like Aadhar Card, PAN card, or Driving License.
  • Address proof
  • Academic documents
  • Details regarding the collateral

Also read: Details on Required Documents 

How to Apply for an Education Loan for an MBA?

The application process for an MBA education loan can be completed both online and offline, though the specific steps may vary depending on the type of loan. Below is the general method of applying for an MBA education loan.

  1. Go to the official website of the bank that offers education loans for MBA.
  2. Find and click on the education loan section.
  3. Select the Apply Now button to start your loan application for MBA.
  4. Fill Out the Application Form and Upload required documents.
  5. After reviewing, submit the application. The bank will start processing your request.
  6. Once your loan is approved, you will receive a confirmation email and sanction letter from the bank, detailing the loan amount, interest rates, repayment schedule, and other terms.

Also read: Details on application process

FAQs

Can I get a loan if my MBA program is hybrid or online?

Some lenders offer loans for full-time MBA programs only, but a few finance hybrid or online MBAs from recognized institutions.

Does an educational loan affect my credit score before repayment starts?

Yes, the loan appears on your credit report immediately, but your score is impacted only if repayments are missed after the moratorium period.

Can I switch my education loan to another bank for a lower interest rate?

Yes, some banks offer education loan balance transfer options to reduce your interest burden.

Do lenders consider MBA specialization while approving loans?

Yes, they do. Specializations with higher earning potential (Finance, Consulting, etc) may improve approval chances.

Can I use part of my education loan to start a business during my MBA?

No, education loans are strictly for academic purposes, but you can explore personal loans or startup grants.

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