The Master of business administration (MBA) is one of the most expensive postgraduate courses abroad. Even though the course offers high returns, Institutes/universities that offer MBA demand a high investment upfront, which many students are unable to afford out of their pockets.

Hence, many of them choose to fund their MBA courses with the help of an MBA education loan. The main aim of this article is to guide you in financing your MBA course through an abroad education loan.

To begin with, you can watch our 34th episode from the LoanFlix series which is on the same topic and is embedded below.

Why take an education loan for MBA ?

There are many education loan benefits that don't just serve financially backward students but also students coming from affluent families like Tax benefits, saving on TCS, etc.

The loans are offered to students who have already secured admission to an MBA institute. By opting for an MBA education loan you can-

1. Extend your pocket: An MBA education loan can help you complete a course that you may not have been able to afford on your own.
2. Covers all education-related expenses- The expenses covered by education loans include not just your tuition fee but also your living expenses.
3. Prevent missed opportunities: It's a crucial investment that can help you advance your profession and open you new opportunities.

What are the options for an MBA education loan?

Before you begin the application process for an MBA education loan, it is essential to understand some basic details. Many students, owing to their lack of knowledge on the matter think that collateral is an integral part of every education loan.

However, this is not the case. For those who don't know, education loans are divided into two categories, based on the need for collateral security, meaning you can also get an education loan without collateral provided you meet the required eligibility criteria. 

So as mentioned, there are two types of education loans you can opt for to fund your MBA course abroad (click on the type of loan to learn about it in detail)-

Collateral education loan (Require collateral security)

Non-collateral education loan (Doesn't require collateral security)

Which is the best education loan scheme for MBA abroad?

There are numerous education loan schemes provided by both public and private lenders for abroad studies. The schemes are more or less similar for all courses abroad, meaning the same scheme can be availed of for an MBA course or any PG courses abroad.

However, when you compare an education loan from Public banks vs Private banks/NBFCs, you'll find out in almost all aspects a public bank offers a much better deal than that of a private lender.

It is because since public banks grant mostly abroad education loans on collateral securities, they are able to offer a lower ROI, a payment-free moratorium period, and much more. On the other hand, private lenders are preferred for non-collateral education loans where they charge higher ROI due to the risk involved.

Why education loan for MBA from government banks the best option of funding?

If you take a look at the education loan policies that most government banks have in place, you may come to realize that borrowing a secured education loan is perhaps one of the best ways of funding MBA courses abroad.

Education loan amount: The maximum loan amount that government banks provide greatly depends on the value of the asset being pledged as collateral security. Government banks lend secured education loans of up to INR .1.5 Cr. for MBA programs abroad. This amount can easily cover the funding requirements of students who wish to pursue their MBA degrees from Ivy League universities as well.

Interest rates: The interest rates of secured education loans is what make it one of the most cost-effective ways of funding your studies abroad. Government banks offer interest rates that vary between 7.65% and 9%. On the other hand, education loan interest rates from private lenders start at 10%.

Moratorium period/repayment holiday: This is one of the highlights of education loans from government banks. A moratorium period basically refers to a loan holiday as you are not obligated to pay anything to the bank. This loan holiday consists of a students' course duration plus six months post that. This gives students sufficient time to arrange for funds to repay their education loans. While private lenders charge simple interest for this duration.

How to apply for an MBA education loan?

The ease of any abroad education loan procedure greatly depends on the terms and conditions of the lending institution. The general process of applying for abroad education loans is pretty simple. You can apply for an education loan online these days. However, getting the respective bank/NBFC to process your loan application is a bigger task. And when you apply individually, there are higher chances of you not getting your education loan at the right time.

This is where WeMakeScholars comes into the picture. The financial team of WeMakeScholars has experience in tackling even the most difficult cases. Our financial officers analyze all aspects of a student’s profile minutely and accordingly suggest a suitable lender. When you choose to apply with us, we will ensure that the entire loan process becomes a cakewalk for you. 

WeMakeScholars, being a government-funded organization has no hidden clauses when it comes to the process. If you are looking to apply for an MBA education loan through a specific lender, or for a specific country, do explore the other articles on this blog.