Education loan for MBA and its Consideration

Posted by Edu4sure team

Master of Business Administration (MBA) makes for a good career choice to pursue. Jobs in the Corporate word are enormous. MBA is popular career choice among students. The diversity in fields in which you can obtain a master degree. You can do MBA even after engineering, mass communication. So it makes it easy for the children. Doing MBA from a reputed IIM will cost you around 15-20 Lacs of rupees. A Huge amount to pay for. Is it worth?Yes. If you see yourself as a person who can handle business, Managing is your forte, go for this course. MBA is surely for you. We would like to share a small discussion between father and son on the MBA plan and then the research done by father on Education loan. We expect it would help our students.

Father: what are your future plans?

Son: I want to pursue MBA

Father: Are you sure you can do it?

Son: Yes, I am pretty sure about it and I only want to do MBA and nothing else

Father: Start preparing for CAT and get admission into the best IIM

Son: I will, but it will cost you more

Father: Don’t worry about the cost, I’ll take a  loan from the bank.

Be so good they can't ignore you. - Steve Martin


Son: Have you done research on it

Father: Yes, I have done research and I will be taking advice from my Banking friends and friends in MBA field.

Son: Okay.

Then the father shared the research done by him and found a solution "Education Loan".

Let's read more about the Education loan and its consideration.

♦ Policy: The number of banks that provide loans is not limited. A Sheer number of loan providers are there in the market. Learn about the policy and clear what you are entitled to by default. Indian Bank Association backed by RBI has drafted model loan scheme for higher education. The purpose of this scheme is to make higher education affordable for all. It acts as a base for other banks

♦ Institutes: Banks extend loans only to reputed and recognized institutes. Banks look for institutes which have placement as a student does. This way student is sure of a job and can repay. IIMs, XLRIs, FMS qualify for loans

♦ Expenses: What all expenses are covered by the loan you are obtaining. Generally, the mandatory tuition fee is covered and partial expenses of hostels, books, other purchases are covered

♦ Loan amount for MBA: Each course has a separate loan amount. MBA students can avail loan till Rs. 10 Lacs and even more if studying in an expensive institute.

♦ Margin requirement: do you need to pay margin? Margin payments are made by the borrower ( the portion is paid) and rest by banks. No margins till Rs. 4 Lac. Learn about all the conditions applying to this clause

♦ Security: Loan for MBA in India up to 4 lac requires no security, up to 7.5 lacs require security and above 7.5 lacs require a collateral security

♦ Loan Approval: How long it takes to approve a loan for MBA. It takes 2- 3days. In case of  loan is not advanced reasons are to be told to the student

♦ Repayment:  The time duration to repay the loan taken

Banks give a relief for unemployment period during the tenure of the loan. This is given for 2-3 times for 6 months

Students who start their own business are given a period of 2 years

A 2- year extension can be granted to students who are unable to complete their MBA in the given tenure

If a student services the interest accrued during the course and moratorium before the repayment term begins, he/she is eligible for a 1% subsidy in interest.

EMI in initial years is low as salary is less, it increases with the increase in the salary and becomes proportionate to it.

♦ Insurance: certain banks require life insurance of the student in order to obtain the loan

♦ Processing Charges:  Banks does not charge processing charges but the third party may charge.

♦ Tax saving: Education loan is tax less  under Section 80E of Income Tax Act

♦ Comparison: Compare the educational loan for MBA of different banks and their interest rates.  The Comparison will reveal the clear picture.

Other consideration to be made

♦ Interest rates

♦ Repayment Mode

♦ Documentation process

♦ Processing fees


♦ Additional benefit as credit guarantee

People avail the education loan despite the capability to fund MBA studies due to the following reasons:

♦ Interest rates are low

♦ Security and margins requirement are also relax

♦ Subsidies on Interest in case of early repayment

♦ Simple interest till moratorium

It is not much difficult to avail the education loan for MBA. Proper repayment improves your credit score. It can be a good start in future to avail loans which can further help you in achieving your dream of being an MBA.


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Edu4sure Team

Edu4Sure, Digital Literacy is an Educational Blog. Our aim is to spread education. We have conducted more than 500 workshops in different areas like Digital Marketing, MS Excel, Analytics, Soft Skills etc. We need people support to continue our blog in Audio & Video as well so that we can spread education to each person. Kindly write to us if you can support in our aim. Our email: Partner@edu4sure.com

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