The fact that MBA is an expensive education is beyond any point of dispute but added to it is another fact that once you get admission offer from one of the 13 IIMs or other top rated B schools like MDI, IMT, XLRI, SPJIMR, JBIMS, IMI, NITIE, there is no dearth of funds to pursue the course. The only need is that you have to be smart enough to judge your requirements and find out the Bank offering the best deal or other financial institution that can cater to it in the manner best suitable to you and at low cost.
Judge you 2 years financial requirements during MBA
You will need funds to satisfy the following needs
Rs.9 lakhs to 15 lakhs towards tuition fee, Lab fee, Library fee, caution money, security deposit.
Rs. 2 to 4 lakhs towards Lodging & Boarding. It includes the hostel accommodation, single or double seater; mess and other charges related to it.
Rs.1.5 to Rs.2 lakhs towards study material and laptop. Books and stationery are not less expensive. You will need around Rs. 1 lakh to Rs. 1.5 lakhs for this purpose. Laptop and accessories are a must in present day education if you wish to remain connected to the rest of the world, an added provision of Rs.50K for this will be needed. You may not need recurring expenses for internet services as almost all the hostel accommodations are wi-fi enabled
Rs. 1 to 2 lakhs for study tours or foreign university tours
Rs. 1 to 2 lakhs towards other expenses like clothing, travelling, outing, entertainment etc.
Apart from this you never know about other unforeseen expenses like medical etc. Now you have to search for the institution that can fund your above needs and in return doesnt impose much financial burden.
Loan amount cap and Interest rates differ for different B schools
Different banks and financial institutions have different criteria to fund MBA education in different institutes according to their own ranking. Banks have published their lists of premier B schools and other B schools. Accordingly, loan for MBA education may be available from Rs. 4 lakhs to Rs.20 lakhs depending upon the classification of the institute by the Banks own standard.
Apart from this, a bank situated in the premises of the particular MBA College may also provide some special funding schemes to pursue MBA from that particular institute. For example, State Bank of India at IIM Ahmedabad campus offers education loan upto Rs.20 lakhs but the same Bank at MDI Gurgaon campus offers education loan upto Rs. 15 lakhs to pursue MBA. On the top of it, rate of interest at IIMA is 10.20% and MDI Gurgaon it is 10.70%.
Make a Comparison
Education loan for MBA is available from almost all the banks including Central Bank ofIndia, Dena Bank, Punjab National Bank, State bank of India, Punjab & Sind Bank, AvanseFinancial Services, IDBI Bank, HDFC. These loan schemes are known by different names toascertain the various terms and conditions, maximum amount, concessionary rate of interest,clubbing of co borrower, need of margin and security.
SBI has named it as SBI Scholar and SBI student loan; PNB has named it as PNB Pratibha and PNB Saraswati. But our prime objective is not to go for the name but to know where we can get maximum at minimum interest rate. Let us compare among the prominent loan providers
Central Bank of India
Maximum loan amount: Rs. 20 lakhs
Rate of interest: 10.75%
Margin amount from borrower: Nil
B schools covered: 13 IIMs, XLRI, XIMB, SPJIMR, MDI
State Bank of India
Maximum Loan amount: Rs.15 to 20 Lakhs (as per the classification)
Rate of interest: 10.20 to 10.70%
Margin amount: 5% of the loan amount
B schools covered for Rs.20 lakhs cap: IIM A,B,C
B schools covered for Rs.15 lakhs cap: All other IIMs, MDI, XLRI, XIMB,IMT
Punjab National Bank
Maximum Loan amount: Rs.10 lakhs and Rs.15 lakhs
Rate of interest: 10.75% for girls and 11.25% for male
Margin amount: 5%
B schools covered:
Rs.15 lakhs cap: IIM A,B,C,L, Kozhikode, Indore, Shillong, XLRI,
Rs.10 lakhs cap: New IIMs, MDI, IMT, SPJIMR, IIFT, FMS, JBIMS, NMIMS, NIRMA, Symbiosis
Dena Bank
Maximum loan amount: Rs.10 lakhs
Rate of interest: 11.8%
Margin Amount: 5%
B schools covered: MDI, IIMs, IMT, SPJIMR, XLRI and other top rated B schools
Canara Bank
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.20%
Margin amount: 5%
B schools covered: IIM A, B, C
Union Bank of India
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.25%
Margin amount: Nil
B schools covered: All the 13 IIMs, XLRI, SPJIMR, MDI,
Punjab & Sind Bank
Maximum loan amount: Rs.10 lakhs
Rate of Interest: 12.75%
Margin amount: 5%
B schools covered: All the 13 IIMs and other B schools
Credilas Education Loan
Maximum loan amount: Total amount as per offer letter of the B schools
Rate of interest: 11.75%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A,B,C,XLRI and other top B schools
Avanse Financial Services
Maximum loan amount: Rs.25 lakhs
Rate of interest: 12.25%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A, B, C, XLRI and other top B schools
Negotiate with the Bank
You may find number of points in their schemes where you can negotiate with the bank and other financial institutions. A few of them could be as follows
Check which Bank or financial institution doesnt ask for any repayment during the course period
Check which bank or financial institution gives relief in interest, if you pay interest during course period
Check which bank or financial institution reduces rate of interest if your parent becomes co-borrower
Waiver of processing charges. If you are taking loan from the institution that charges processing fee, try to negotiate and ask them to waive the same. They know well that Public sector banks are not charging this component. With a little effort you could get the same waived.
Rate of interest can be negotiated. Banks link their rate of interest to the base rate which goes on changing. Check the correct prevailing base rate and link it as specified because correction at later stage becomes a problem due to the many constraints. For example if the base rate today is 10.25 and rate of interest on education loan is 0.25 above the base rate; your rate will come to 10.50%. Be aware about this fact
Ask for the screen shot when loan account is opened. Number of banking personnel due to the ignorance about their own schemes enter higher rate of interest, other charges, moratorium and repayment period in their system without ascertaining your eligibility criteria. Better to check what they have entered at the time of sanctioning and disbursement of education loan.
Check for margin amount. If the bank asks you for the margin amount while it is not applicable, be on your guard. Education loan upto Rs.4 lakhs for any B school doesnt call for the margin amount and loan for higher amount, which goes upto Rs.20 lakhs without margin, is sanctioned and disbursed in accordance to the specified scheme for the particular institute.
No guarantee or security can be taken by the Bank upto the specified amount of MBA education loan according to the scheme. In case the amount is higher than specified in the loan scheme, please check and confirm whether the same can be taken by the Bank.
Avoid getting deceived
Discuss with the authorized person and in case of need, talk to their controlling office, send mail and letter and make it a documentary proof. Please remember-
No 3rd party guarantee unless specified in the scheme
No collateral security unless specified in the scheme for the prescribed amount
No margin up to the specified amount
These 3 items are to be properly understood as at a later stage Banks usually take the plea that they didnt ask for the above but the borrower had offered and the bank didnt refuse. Once they become the part of your loan document it is very difficult to take the security back before repayment except the margin money that you were asked to pay.
Take back the margin money, if not applicable
In case banks collect margin amount from you and you pay it because you need the loan and do not have much time left to deposit the fee, you may later on ask for the refund of the same. Banks as per the rules, if charge anything which they shouldnt charge have to refund it and in case of any resistance from them you can claim the refund with interest which you will get with all expenses paid.
Advisory
Contact the B school campus branch of the bank first. Banks situated in the B school campus have all the relevant details and are more expert in the job. They can issue in-principle sanction letter for the loan amount with all the terms and conditions written therein. You may approach the nearest branch to your residence to get the loan disbursed. Most of the banks have centralized processing centres to sanction the loans. They then direct the concerned branch to release the funds.
Also Read other Articles:
Is your Inbox hampering MBA Dream? Glass half full or half empty, its your wish!
MBA Admission: I couldn`t do my MBA from a top B-school. So What?
Wait before taking MBA admission, better be late than sorry
Are IIMs wasting time of MBA aspirants? Whats your take?
Want a Fee refund from your MBA College? Admission withdrawal cases; How to avoid
Stay tuned to MBA Universe.com for next article on education loan for MBA
Judge you 2 years financial requirements during MBA
You will need funds to satisfy the following needs
Rs.9 lakhs to 15 lakhs towards tuition fee, Lab fee, Library fee, caution money, security deposit.
Rs. 2 to 4 lakhs towards Lodging & Boarding. It includes the hostel accommodation, single or double seater; mess and other charges related to it.
Rs.1.5 to Rs.2 lakhs towards study material and laptop. Books and stationery are not less expensive. You will need around Rs. 1 lakh to Rs. 1.5 lakhs for this purpose. Laptop and accessories are a must in present day education if you wish to remain connected to the rest of the world, an added provision of Rs.50K for this will be needed. You may not need recurring expenses for internet services as almost all the hostel accommodations are wi-fi enabled
Rs. 1 to 2 lakhs for study tours or foreign university tours
Rs. 1 to 2 lakhs towards other expenses like clothing, travelling, outing, entertainment etc.
Apart from this you never know about other unforeseen expenses like medical etc. Now you have to search for the institution that can fund your above needs and in return doesnt impose much financial burden.
Loan amount cap and Interest rates differ for different B schools
Different banks and financial institutions have different criteria to fund MBA education in different institutes according to their own ranking. Banks have published their lists of premier B schools and other B schools. Accordingly, loan for MBA education may be available from Rs. 4 lakhs to Rs.20 lakhs depending upon the classification of the institute by the Banks own standard.
Apart from this, a bank situated in the premises of the particular MBA College may also provide some special funding schemes to pursue MBA from that particular institute. For example, State Bank of India at IIM Ahmedabad campus offers education loan upto Rs.20 lakhs but the same Bank at MDI Gurgaon campus offers education loan upto Rs. 15 lakhs to pursue MBA. On the top of it, rate of interest at IIMA is 10.20% and MDI Gurgaon it is 10.70%.
Make a Comparison
Education loan for MBA is available from almost all the banks including Central Bank ofIndia, Dena Bank, Punjab National Bank, State bank of India, Punjab & Sind Bank, AvanseFinancial Services, IDBI Bank, HDFC. These loan schemes are known by different names toascertain the various terms and conditions, maximum amount, concessionary rate of interest,clubbing of co borrower, need of margin and security.
SBI has named it as SBI Scholar and SBI student loan; PNB has named it as PNB Pratibha and PNB Saraswati. But our prime objective is not to go for the name but to know where we can get maximum at minimum interest rate. Let us compare among the prominent loan providers
Central Bank of India
Maximum loan amount: Rs. 20 lakhs
Rate of interest: 10.75%
Margin amount from borrower: Nil
B schools covered: 13 IIMs, XLRI, XIMB, SPJIMR, MDI
State Bank of India
Maximum Loan amount: Rs.15 to 20 Lakhs (as per the classification)
Rate of interest: 10.20 to 10.70%
Margin amount: 5% of the loan amount
B schools covered for Rs.20 lakhs cap: IIM A,B,C
B schools covered for Rs.15 lakhs cap: All other IIMs, MDI, XLRI, XIMB,IMT
Punjab National Bank
Maximum Loan amount: Rs.10 lakhs and Rs.15 lakhs
Rate of interest: 10.75% for girls and 11.25% for male
Margin amount: 5%
B schools covered:
Rs.15 lakhs cap: IIM A,B,C,L, Kozhikode, Indore, Shillong, XLRI,
Rs.10 lakhs cap: New IIMs, MDI, IMT, SPJIMR, IIFT, FMS, JBIMS, NMIMS, NIRMA, Symbiosis
Dena Bank
Maximum loan amount: Rs.10 lakhs
Rate of interest: 11.8%
Margin Amount: 5%
B schools covered: MDI, IIMs, IMT, SPJIMR, XLRI and other top rated B schools
Canara Bank
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.20%
Margin amount: 5%
B schools covered: IIM A, B, C
Union Bank of India
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.25%
Margin amount: Nil
B schools covered: All the 13 IIMs, XLRI, SPJIMR, MDI,
Punjab & Sind Bank
Maximum loan amount: Rs.10 lakhs
Rate of Interest: 12.75%
Margin amount: 5%
B schools covered: All the 13 IIMs and other B schools
Credilas Education Loan
Maximum loan amount: Total amount as per offer letter of the B schools
Rate of interest: 11.75%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A,B,C,XLRI and other top B schools
Avanse Financial Services
Maximum loan amount: Rs.25 lakhs
Rate of interest: 12.25%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A, B, C, XLRI and other top B schools
Negotiate with the Bank
You may find number of points in their schemes where you can negotiate with the bank and other financial institutions. A few of them could be as follows
Check which Bank or financial institution doesnt ask for any repayment during the course period
Check which bank or financial institution gives relief in interest, if you pay interest during course period
Check which bank or financial institution reduces rate of interest if your parent becomes co-borrower
Waiver of processing charges. If you are taking loan from the institution that charges processing fee, try to negotiate and ask them to waive the same. They know well that Public sector banks are not charging this component. With a little effort you could get the same waived.
Rate of interest can be negotiated. Banks link their rate of interest to the base rate which goes on changing. Check the correct prevailing base rate and link it as specified because correction at later stage becomes a problem due to the many constraints. For example if the base rate today is 10.25 and rate of interest on education loan is 0.25 above the base rate; your rate will come to 10.50%. Be aware about this fact
Ask for the screen shot when loan account is opened. Number of banking personnel due to the ignorance about their own schemes enter higher rate of interest, other charges, moratorium and repayment period in their system without ascertaining your eligibility criteria. Better to check what they have entered at the time of sanctioning and disbursement of education loan.
Check for margin amount. If the bank asks you for the margin amount while it is not applicable, be on your guard. Education loan upto Rs.4 lakhs for any B school doesnt call for the margin amount and loan for higher amount, which goes upto Rs.20 lakhs without margin, is sanctioned and disbursed in accordance to the specified scheme for the particular institute.
No guarantee or security can be taken by the Bank upto the specified amount of MBA education loan according to the scheme. In case the amount is higher than specified in the loan scheme, please check and confirm whether the same can be taken by the Bank.
Avoid getting deceived
Discuss with the authorized person and in case of need, talk to their controlling office, send mail and letter and make it a documentary proof. Please remember-
No 3rd party guarantee unless specified in the scheme
No collateral security unless specified in the scheme for the prescribed amount
No margin up to the specified amount
These 3 items are to be properly understood as at a later stage Banks usually take the plea that they didnt ask for the above but the borrower had offered and the bank didnt refuse. Once they become the part of your loan document it is very difficult to take the security back before repayment except the margin money that you were asked to pay.
Take back the margin money, if not applicable
In case banks collect margin amount from you and you pay it because you need the loan and do not have much time left to deposit the fee, you may later on ask for the refund of the same. Banks as per the rules, if charge anything which they shouldnt charge have to refund it and in case of any resistance from them you can claim the refund with interest which you will get with all expenses paid.
Advisory
Contact the B school campus branch of the bank first. Banks situated in the B school campus have all the relevant details and are more expert in the job. They can issue in-principle sanction letter for the loan amount with all the terms and conditions written therein. You may approach the nearest branch to your residence to get the loan disbursed. Most of the banks have centralized processing centres to sanction the loans. They then direct the concerned branch to release the funds.
Also Read other Articles:
Is your Inbox hampering MBA Dream? Glass half full or half empty, its your wish!
MBA Admission: I couldn`t do my MBA from a top B-school. So What?
Wait before taking MBA admission, better be late than sorry
Are IIMs wasting time of MBA aspirants? Whats your take?
Want a Fee refund from your MBA College? Admission withdrawal cases; How to avoid
Stay tuned to MBA Universe.com for next article on education loan for MBA
Description
The fact that MBA is an expensive education is beyond any point of dispute but added to it is another fact that once you get admission offer from one of the 13 IIMs or other top rated B schools like MDI, IMT, XLRI, SPJIMR, JBIMS, IMI, NITIE, there is no dearth of funds to pursue the course. The only need is that you have to be smart enough to judge your requirements and find out the Bank offering the best deal or other financial institution that can cater to it in the manner best suitable to you and at low cost.
Judge you 2 years financial requirements during MBA
You will need funds to satisfy the following needs
Rs.9 lakhs to 15 lakhs towards tuition fee, Lab fee, Library fee, caution money, security deposit.
Rs. 2 to 4 lakhs towards Lodging & Boarding. It includes the hostel accommodation, single or double seater; mess and other charges related to it.
Rs.1.5 to Rs.2 lakhs towards study material and laptop. Books and stationery are not less expensive. You will need around Rs. 1 lakh to Rs. 1.5 lakhs for this purpose. Laptop and accessories are a must in present day education if you wish to remain connected to the rest of the world, an added provision of Rs.50K for this will be needed. You may not need recurring expenses for internet services as almost all the hostel accommodations are wi-fi enabled
Rs. 1 to 2 lakhs for study tours or foreign university tours
Rs. 1 to 2 lakhs towards other expenses like clothing, travelling, outing, entertainment etc.
Apart from this you never know about other unforeseen expenses like medical etc. Now you have to search for the institution that can fund your above needs and in return doesnt impose much financial burden.
Loan amount cap and Interest rates differ for different B schools
Different banks and financial institutions have different criteria to fund MBA education in different institutes according to their own ranking. Banks have published their lists of premier B schools and other B schools. Accordingly, loan for MBA education may be available from Rs. 4 lakhs to Rs.20 lakhs depending upon the classification of the institute by the Banks own standard.
Apart from this, a bank situated in the premises of the particular MBA College may also provide some special funding schemes to pursue MBA from that particular institute. For example, State Bank of India at IIM Ahmedabad campus offers education loan upto Rs.20 lakhs but the same Bank at MDI Gurgaon campus offers education loan upto Rs. 15 lakhs to pursue MBA. On the top of it, rate of interest at IIMA is 10.20% and MDI Gurgaon it is 10.70%.
Make a Comparison
Education loan for MBA is available from almost all the banks including Central Bank ofIndia, Dena Bank, Punjab National Bank, State bank of India, Punjab & Sind Bank, AvanseFinancial Services, IDBI Bank, HDFC. These loan schemes are known by different names toascertain the various terms and conditions, maximum amount, concessionary rate of interest,clubbing of co borrower, need of margin and security.
SBI has named it as SBI Scholar and SBI student loan; PNB has named it as PNB Pratibha and PNB Saraswati. But our prime objective is not to go for the name but to know where we can get maximum at minimum interest rate. Let us compare among the prominent loan providers
Central Bank of India
Maximum loan amount: Rs. 20 lakhs
Rate of interest: 10.75%
Margin amount from borrower: Nil
B schools covered: 13 IIMs, XLRI, XIMB, SPJIMR, MDI
State Bank of India
Maximum Loan amount: Rs.15 to 20 Lakhs (as per the classification)
Rate of interest: 10.20 to 10.70%
Margin amount: 5% of the loan amount
B schools covered for Rs.20 lakhs cap: IIM A,B,C
B schools covered for Rs.15 lakhs cap: All other IIMs, MDI, XLRI, XIMB,IMT
Punjab National Bank
Maximum Loan amount: Rs.10 lakhs and Rs.15 lakhs
Rate of interest: 10.75% for girls and 11.25% for male
Margin amount: 5%
B schools covered:
Rs.15 lakhs cap: IIM A,B,C,L, Kozhikode, Indore, Shillong, XLRI,
Rs.10 lakhs cap: New IIMs, MDI, IMT, SPJIMR, IIFT, FMS, JBIMS, NMIMS, NIRMA, Symbiosis
Dena Bank
Maximum loan amount: Rs.10 lakhs
Rate of interest: 11.8%
Margin Amount: 5%
B schools covered: MDI, IIMs, IMT, SPJIMR, XLRI and other top rated B schools
Canara Bank
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.20%
Margin amount: 5%
B schools covered: IIM A, B, C
Union Bank of India
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.25%
Margin amount: Nil
B schools covered: All the 13 IIMs, XLRI, SPJIMR, MDI,
Punjab & Sind Bank
Maximum loan amount: Rs.10 lakhs
Rate of Interest: 12.75%
Margin amount: 5%
B schools covered: All the 13 IIMs and other B schools
Credilas Education Loan
Maximum loan amount: Total amount as per offer letter of the B schools
Rate of interest: 11.75%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A,B,C,XLRI and other top B schools
Avanse Financial Services
Maximum loan amount: Rs.25 lakhs
Rate of interest: 12.25%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A, B, C, XLRI and other top B schools
Negotiate with the Bank
You may find number of points in their schemes where you can negotiate with the bank and other financial institutions. A few of them could be as follows
Check which Bank or financial institution doesnt ask for any repayment during the course period
Check which bank or financial institution gives relief in interest, if you pay interest during course period
Check which bank or financial institution reduces rate of interest if your parent becomes co-borrower
Waiver of processing charges. If you are taking loan from the institution that charges processing fee, try to negotiate and ask them to waive the same. They know well that Public sector banks are not charging this component. With a little effort you could get the same waived.
Rate of interest can be negotiated. Banks link their rate of interest to the base rate which goes on changing. Check the correct prevailing base rate and link it as specified because correction at later stage becomes a problem due to the many constraints. For example if the base rate today is 10.25 and rate of interest on education loan is 0.25 above the base rate; your rate will come to 10.50%. Be aware about this fact
Ask for the screen shot when loan account is opened. Number of banking personnel due to the ignorance about their own schemes enter higher rate of interest, other charges, moratorium and repayment period in their system without ascertaining your eligibility criteria. Better to check what they have entered at the time of sanctioning and disbursement of education loan.
Check for margin amount. If the bank asks you for the margin amount while it is not applicable, be on your guard. Education loan upto Rs.4 lakhs for any B school doesnt call for the margin amount and loan for higher amount, which goes upto Rs.20 lakhs without margin, is sanctioned and disbursed in accordance to the specified scheme for the particular institute.
No guarantee or security can be taken by the Bank upto the specified amount of MBA education loan according to the scheme. In case the amount is higher than specified in the loan scheme, please check and confirm whether the same can be taken by the Bank.
Avoid getting deceived
Discuss with the authorized person and in case of need, talk to their controlling office, send mail and letter and make it a documentary proof. Please remember-
No 3rd party guarantee unless specified in the scheme
No collateral security unless specified in the scheme for the prescribed amount
No margin up to the specified amount
These 3 items are to be properly understood as at a later stage Banks usually take the plea that they didnt ask for the above but the borrower had offered and the bank didnt refuse. Once they become the part of your loan document it is very difficult to take the security back before repayment except the margin money that you were asked to pay.
Take back the margin money, if not applicable
In case banks collect margin amount from you and you pay it because you need the loan and do not have much time left to deposit the fee, you may later on ask for the refund of the same. Banks as per the rules, if charge anything which they shouldnt charge have to refund it and in case of any resistance from them you can claim the refund with interest which you will get with all expenses paid.
Advisory
Contact the B school campus branch of the bank first. Banks situated in the B school campus have all the relevant details and are more expert in the job. They can issue in-principle sanction letter for the loan amount with all the terms and conditions written therein. You may approach the nearest branch to your residence to get the loan disbursed. Most of the banks have centralized processing centres to sanction the loans. They then direct the concerned branch to release the funds.
Also Read other Articles:
Is your Inbox hampering MBA Dream? Glass half full or half empty, its your wish!
MBA Admission: I couldn`t do my MBA from a top B-school. So What?
Wait before taking MBA admission, better be late than sorry
Are IIMs wasting time of MBA aspirants? Whats your take?
Want a Fee refund from your MBA College? Admission withdrawal cases; How to avoid
Stay tuned to MBA Universe.com for next article on education loan for MBA
Judge you 2 years financial requirements during MBA
You will need funds to satisfy the following needs
Rs.9 lakhs to 15 lakhs towards tuition fee, Lab fee, Library fee, caution money, security deposit.
Rs. 2 to 4 lakhs towards Lodging & Boarding. It includes the hostel accommodation, single or double seater; mess and other charges related to it.
Rs.1.5 to Rs.2 lakhs towards study material and laptop. Books and stationery are not less expensive. You will need around Rs. 1 lakh to Rs. 1.5 lakhs for this purpose. Laptop and accessories are a must in present day education if you wish to remain connected to the rest of the world, an added provision of Rs.50K for this will be needed. You may not need recurring expenses for internet services as almost all the hostel accommodations are wi-fi enabled
Rs. 1 to 2 lakhs for study tours or foreign university tours
Rs. 1 to 2 lakhs towards other expenses like clothing, travelling, outing, entertainment etc.
Apart from this you never know about other unforeseen expenses like medical etc. Now you have to search for the institution that can fund your above needs and in return doesnt impose much financial burden.
Loan amount cap and Interest rates differ for different B schools
Different banks and financial institutions have different criteria to fund MBA education in different institutes according to their own ranking. Banks have published their lists of premier B schools and other B schools. Accordingly, loan for MBA education may be available from Rs. 4 lakhs to Rs.20 lakhs depending upon the classification of the institute by the Banks own standard.
Apart from this, a bank situated in the premises of the particular MBA College may also provide some special funding schemes to pursue MBA from that particular institute. For example, State Bank of India at IIM Ahmedabad campus offers education loan upto Rs.20 lakhs but the same Bank at MDI Gurgaon campus offers education loan upto Rs. 15 lakhs to pursue MBA. On the top of it, rate of interest at IIMA is 10.20% and MDI Gurgaon it is 10.70%.
Make a Comparison
Education loan for MBA is available from almost all the banks including Central Bank ofIndia, Dena Bank, Punjab National Bank, State bank of India, Punjab & Sind Bank, AvanseFinancial Services, IDBI Bank, HDFC. These loan schemes are known by different names toascertain the various terms and conditions, maximum amount, concessionary rate of interest,clubbing of co borrower, need of margin and security.
SBI has named it as SBI Scholar and SBI student loan; PNB has named it as PNB Pratibha and PNB Saraswati. But our prime objective is not to go for the name but to know where we can get maximum at minimum interest rate. Let us compare among the prominent loan providers
Central Bank of India
Maximum loan amount: Rs. 20 lakhs
Rate of interest: 10.75%
Margin amount from borrower: Nil
B schools covered: 13 IIMs, XLRI, XIMB, SPJIMR, MDI
State Bank of India
Maximum Loan amount: Rs.15 to 20 Lakhs (as per the classification)
Rate of interest: 10.20 to 10.70%
Margin amount: 5% of the loan amount
B schools covered for Rs.20 lakhs cap: IIM A,B,C
B schools covered for Rs.15 lakhs cap: All other IIMs, MDI, XLRI, XIMB,IMT
Punjab National Bank
Maximum Loan amount: Rs.10 lakhs and Rs.15 lakhs
Rate of interest: 10.75% for girls and 11.25% for male
Margin amount: 5%
B schools covered:
Rs.15 lakhs cap: IIM A,B,C,L, Kozhikode, Indore, Shillong, XLRI,
Rs.10 lakhs cap: New IIMs, MDI, IMT, SPJIMR, IIFT, FMS, JBIMS, NMIMS, NIRMA, Symbiosis
Dena Bank
Maximum loan amount: Rs.10 lakhs
Rate of interest: 11.8%
Margin Amount: 5%
B schools covered: MDI, IIMs, IMT, SPJIMR, XLRI and other top rated B schools
Canara Bank
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.20%
Margin amount: 5%
B schools covered: IIM A, B, C
Union Bank of India
Maximum loan amount: Rs.20 lakhs
Rate of Interest: 10.25%
Margin amount: Nil
B schools covered: All the 13 IIMs, XLRI, SPJIMR, MDI,
Punjab & Sind Bank
Maximum loan amount: Rs.10 lakhs
Rate of Interest: 12.75%
Margin amount: 5%
B schools covered: All the 13 IIMs and other B schools
Credilas Education Loan
Maximum loan amount: Total amount as per offer letter of the B schools
Rate of interest: 11.75%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A,B,C,XLRI and other top B schools
Avanse Financial Services
Maximum loan amount: Rs.25 lakhs
Rate of interest: 12.25%
Margin amount: Nil (one time processing charges Rs.5000+ taxes will be recovered)
B schools covered: IIM A, B, C, XLRI and other top B schools
Negotiate with the Bank
You may find number of points in their schemes where you can negotiate with the bank and other financial institutions. A few of them could be as follows
Check which Bank or financial institution doesnt ask for any repayment during the course period
Check which bank or financial institution gives relief in interest, if you pay interest during course period
Check which bank or financial institution reduces rate of interest if your parent becomes co-borrower
Waiver of processing charges. If you are taking loan from the institution that charges processing fee, try to negotiate and ask them to waive the same. They know well that Public sector banks are not charging this component. With a little effort you could get the same waived.
Rate of interest can be negotiated. Banks link their rate of interest to the base rate which goes on changing. Check the correct prevailing base rate and link it as specified because correction at later stage becomes a problem due to the many constraints. For example if the base rate today is 10.25 and rate of interest on education loan is 0.25 above the base rate; your rate will come to 10.50%. Be aware about this fact
Ask for the screen shot when loan account is opened. Number of banking personnel due to the ignorance about their own schemes enter higher rate of interest, other charges, moratorium and repayment period in their system without ascertaining your eligibility criteria. Better to check what they have entered at the time of sanctioning and disbursement of education loan.
Check for margin amount. If the bank asks you for the margin amount while it is not applicable, be on your guard. Education loan upto Rs.4 lakhs for any B school doesnt call for the margin amount and loan for higher amount, which goes upto Rs.20 lakhs without margin, is sanctioned and disbursed in accordance to the specified scheme for the particular institute.
No guarantee or security can be taken by the Bank upto the specified amount of MBA education loan according to the scheme. In case the amount is higher than specified in the loan scheme, please check and confirm whether the same can be taken by the Bank.
Avoid getting deceived
Discuss with the authorized person and in case of need, talk to their controlling office, send mail and letter and make it a documentary proof. Please remember-
No 3rd party guarantee unless specified in the scheme
No collateral security unless specified in the scheme for the prescribed amount
No margin up to the specified amount
These 3 items are to be properly understood as at a later stage Banks usually take the plea that they didnt ask for the above but the borrower had offered and the bank didnt refuse. Once they become the part of your loan document it is very difficult to take the security back before repayment except the margin money that you were asked to pay.
Take back the margin money, if not applicable
In case banks collect margin amount from you and you pay it because you need the loan and do not have much time left to deposit the fee, you may later on ask for the refund of the same. Banks as per the rules, if charge anything which they shouldnt charge have to refund it and in case of any resistance from them you can claim the refund with interest which you will get with all expenses paid.
Advisory
Contact the B school campus branch of the bank first. Banks situated in the B school campus have all the relevant details and are more expert in the job. They can issue in-principle sanction letter for the loan amount with all the terms and conditions written therein. You may approach the nearest branch to your residence to get the loan disbursed. Most of the banks have centralized processing centres to sanction the loans. They then direct the concerned branch to release the funds.
Also Read other Articles:
Is your Inbox hampering MBA Dream? Glass half full or half empty, its your wish!
MBA Admission: I couldn`t do my MBA from a top B-school. So What?
Wait before taking MBA admission, better be late than sorry
Are IIMs wasting time of MBA aspirants? Whats your take?
Want a Fee refund from your MBA College? Admission withdrawal cases; How to avoid
Stay tuned to MBA Universe.com for next article on education loan for MBA
Article Slug
/article/id/7663/Education-loan2-for-MBA1
altTag
Education loan for MBA, Think twice and negotiate with banks
isFeatured
Off
articleId
3117
subTitle
Once you get admission offer from one of the 13 IIMs or other top rated B schools like MDI, IMT, XLRI, SPJIMR, JBIMS, NITIE, there is no dearth of funds to pursue the course. The only need is that you have to be smart enough to judge your requirements and find out the Bank offering the best deal