MBA Education Loans for CAT (Common Admission Test) Aspirants 2018

Last Updated - April 06 2018

Not only preparing for to get into top MBA colleges is a cumbersome task but also funding the course is equally difficult. Securing the provide letter is not all that is the need for admissions but also the resources to fund the fees.

For a number of aspirants seeking to complete CAT, the course fee of an IIM or top B-school can be a significant concern. The fee charged these colleges, in turn, makes MBA one of the most expensive courses in India and abroad. While their course fee is exorbitant, we can not deny the fact that they provide world-class facilities/ infrastructure and unexcelled faculties.

For your reference, here is the course fee for some of the top MBA colleges accepting CAT score:

IIM BangaloreINR 19.50 lakh
IIM AhmedabadINR 21 lakh
IIM CalcuttaINR 19 lakh
DMS, IIT DelhiINR 4.39 lakh
DoMS, IIT MadrasINR 6 lakh
IIM LucknowINR 14 lakh
XLRI JamshedpurINR 16.8 lakh
IIM KozhikodeINR 16 lakh
DoMS, IIT RoorkeeINR 4.18 lakh

We believe that money shouldn’t hamper the candidates' dream and therefore many B-Schools, via tie-ups with banks provides educational loans at nominal interest rates for which repayment structure is also various than other loans.

Apart from tie-ups, banks also offer loans on one to one basis for students wishing to pursue their higher studies. Before aspirants opt for any of the education loan schemes, it is important that they know the terms and conditions of each and every scheme so the loan doesn’t haunt them once their MBA is clear.

CAT education loan will not only help you manage your finances for the course but also lets you save for the unforeseen expenses during the course duration. Here is a clear guide for MBA candidates who wish to opt for education loan. To reduce the burden of repayment, candidates must choose the loan with least interest value and other exemptions. Most of the candidates are not familiar with the clear details about the education loan.

Who Can Apply for MBA Loans?

  • Many lenders have set the age limits for the loan which ranges between 16 years and 35 years.
  • It is important to know that only the aspirants who are citizens of India and are having a documentary proof of admission can apply for education loan.
  • The top B-Schools of India like IIMs have lined up with several banks to which the institute offers information about the aspirants selected. These banks then get in touch with the aspirant to facilitate the funding for the course.

Read CAT Eligibility Criteria

How to Choose the Right Bank?

Each financial institution sets the upper limit of the loans they can offer. Aspirants must evaluate all their expenses and then plan further to choose the best possible option.

In case of any additional expenses requirement, aspirants must manage them well in advance. Candidates must know that there are certain expenses covered under the education loan which comprise the following:

  • Hostel fee/ accommodation
  • Study tour expenses
  • Library & Laboratory fee
  • Examination fee
  • Travel expenses, Passage money for studies abroad
  • Security deposits
  • Study material expenses (books, laptop, etc)
  • Tuition fee
  • Project work expenses

With innumerable options available for funding, it is necessary that the candidate assesses the choice from every aspect. Aspirants must consider certain things before they make the final judgment:

Rate of Interest

Every bank provides education loan at the various rate and the maximum limit also varies. Given below are some of the most preferred loan offers in India:

Bank RateInterest RateMaximum Loan AmountRepayment duration
State Bank of India9.35% to 10.70%Up to 30 lakhs for IIMs and other top B-Schools7 to 12 years
Allahabad BankFor IIMs is 8% and for other institutes is 10%Up to 20 lakhs7 years
Bank of Baroda20 lakhs/ 10 lakhs (depending upon the institute)10.5% to 11.5%5 years
Punjab National BankUp to 20 lakhs8.15% to 8.75%10 to 15 years
IDBI BankUp to 20 lakhs9.7%10 to 15 years

*Most of these banks offer exemptions in interest rates for female participants.

Documents Need

Aspirants must keep the following documents handy before they apply for education loan:

Documents Need
Proof of admission by the B-SchoolMark sheet of the highest qualification
Estimate of expenses and schedule of fee payment at the instituteBank statement of last 6 months
Asset and liabilities statementIncome tax assessment records (not previous than 2 years)
Identity proofResidential proof

Guarantee/ Collateral Requirement

  • Many banks do not offer the 100% funding for MBA via CAT 2018.
  • Most of the banks require a third-party guarantee for loans ranging between 4 lakhs to 8 lakhs.
  • Collateral will be the need in case the loan requirements exceeds the limit of 8 lakhs.

Repayment Procedure

  • The repayment usually begins after six months of job or after one year of course completion, whichever is previous.
  • Depending upon the amount to be repaid and other terms and conditions of the loan, repayment duration can range from anywhere from 1 year to 9 years.
  • Candidates usually try to repay their loan as soon as possible so as to get over the debt. But what required to be understood is to opt for a longer duration repayment process as, during the loan repayment, the aspirant will be exempted from the income tax. This will prove to be beneficial in the long run.

How to Apply for MBA Loans?

  • Most of the financial institutions (banks and NBFCs) offer education loans options online.
  • Aspirants have to visit the respective website of the bank to apply for education loan. The steps comprise:
  1. Visit the official website of the bank.
  2. Visit the loan section at the home page.
  3. Click on education loan link.
  4. Fill the application form and offer all the valid details.
  5. Finally, submit the application form.
  • After all the formalities are clear, the bank will send the loan agreement to the student. C
  • Aspirants must go via the agreement cautiously after which the signed document must be submitted to the bank for further procedure. to submit applications online.
  • After the successful submissions of the loan application, a bank will contact the students or the guardian for any of the additional information requirements.
  • Aspirants will also have to meet the bank representative at the guardian’s residence and submit all the necessary documents for the purpose.

We hope this article was helpful in getting to learn about MBA Loans for India and abroad. Make sure you have all the key papers and details available to you.

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