Your Complete Guide to Get Education Loan for MBA in India

In 2024, CAT received 3.2 lakh student registrations. This shows the number of students in India aspiring to become business leaders and entrepreneurs. However, the rising cost of B-schools poses a significant concern. For instance, IIM Ahmedabad's fees increased 575% from INR 4 lakh in 2007 to INR 27 lakh in 2024. Similarly, IIM Bangalore and IIM Mumbai charge INR 26 lakh and INR 21 lakh, respectively, for the current year.

Despite the rising costs, an MBA in India from a top institute promises growth and high ROI. Thus, education loans come as an important financial tool for many students. But, while exploring the loan options they often get confused among the different lenders available.

But, not anymore because this guide will simplify the process by breaking down the costs of top MBA programs, comparing loan options, and explaining eligibility criteria. Everything from types of lenders to repayment terms will be explained and you can make an informed decision and achieve your MBA dreams without financial stress.

Cost of Studying MBA in India

MBA in India offers lucrative career prospects, but, it also asks for big investments. The total cost of the MBA depends on some factors such as the institution's reputation, location, and program type. On average, a student can expect to invest between INR 7.5 - 25 Lakhs per year, which includes tuition, books, housing, and miscellaneous expenses.

Here are the tuition fees you can expect in some of India's top MBA colleges:

Types of Education Loan

If you have decided to go for the MBA in India and are considering an education loan to fund it. Then understanding the types of loans is important which are categorized into two broad categories based on collateral:

Secured Education Loans:

Require collateral such as property, fixed deposits, or government bonds. They offer lower interest rates and higher loan amounts.

Unsecured Education Loans:

Do not require collateral and come with higher interest rates and stricter eligibility criteria.

Read more on the unsecured and secured education loan, here!

Popular Lending Options for MBA Education Loan

If you are still stuck on, “How to get education loan for MBA in India?” Then here are some of the lending options available to prospective students. This list includes a diverse range of lenders offering education loans for MBA studies, including public sector banks, private banks, and specialized NBFCs. 

Comparison Between Different Lenders can help you know the best lender for your profile.

How to Choose the Best Lender?

Based on the collateral availability, you know which type of loan, is suitable for your profile. But, while choosing the lender analyze the following factors to make an informed decision for education loans for an MBA in India.

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  Interest Rate: The lender offering the lowest interest rate should be prioritized because this would help you save lakhs of money in the long run.

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  Processing fee and time: To process the loan application, every lender charges an amount. Public banks charge the lowest and NBFCs charge the highest of around 1.5 percent of the loan amount. 

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  Margin Money: The amount that a student is required to spend from his pocket.

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  Moratorium Period: Most lenders provide a moratorium period which includes the course duration and an additional 6-12 months in which students can get a customizable repayment plan.

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  Tax Benefit: The Indian government has included the education loan in the tax benefit under Section 80E where a student can get benefits on the interest rate for 8 consecutive years. 

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  Loan Duration: The loan duration is the time frame when the student needs to repay the education loan however, the longer tenure will give a lesser burden on your monthly income.

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  Covered Expenses: The loan amount doesn’t cover all the expenses thus, ask the lender about the expenses they cover in the loan amount.

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  Repayment terms and conditions: The repayment also comes with terms and conditions that you should understand to make the best financial decisions.

Education Loan for MBA in Indian Eligibility Criteria

To qualify for an MBA education loan in India, candidates need to adhere to specific eligibility standards:

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  A minimum 60% GPA is required for graduation.
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  Educational history must be continuous without any breaks.
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  The credit score of the co-signer needs to be above 700.
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  For any educational interruptions, candidates are required to present a medical certificate or similar justification.
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  While the Reserve Bank of India doesn't enforce age restrictions for education loans for MBA programs, certain banks might limit applicants to under 35 years of age.

Education Loan for MBA in India Documents Required

To apply for an MBA education loan in India, applicants must submit digital copies of the following documents:

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  Educational documents from the 10th standard up to the latest qualification.
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  Identification proof such as PAN card, Aadhar card, Passport, or Voter ID card.
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  Various acceptable proofs of residence including electricity bills, ration cards, Aadhar cards, bank passbooks, or voter ID cards.
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  Six months bank statements from the co-applicant.
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  Income Tax Returns for the last two years.

Application Process for Education Loan for MBA in India 

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  Research & Compare Loan Options: Compare interest rates, repayment terms, and eligibility across lenders.

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  Check Eligibility: Confirm the bank's eligibility criteria to ensure a streamlined application process. 

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  Prepare Documents: Gather acceptance letters, academic records, proof of identity, residence, and financial statements.

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  Apply Online or Offline: Most banks and NBFCs provide digital loan application options.

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  Loan Processing & Approval: The bank reviews your application and creditworthiness before approval.

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  Loan Disbursement: Funds are released as per institution requirements.

Loan Repayment & Tax Benefits

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  Repayment begins 6-12 months after course completion or after securing employment. However, ask the lender about the repayment terms during the moratorium, to avoid surprises later. 
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  Loan tenure varies from 5 to 15 years.
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  Interest payments don't qualify for tax deductions under Section 80E of the Income Tax Act. Thus, ask the lender and process to get the required document to avail tax benefits.

You can leverage strategic planning while repaying your education loan. Education Loan Repayment Plans blog might help in that.

MBA in India vs. MBA Abroad

Now, you know the cost of an MBA in India but, many students also look out for MBA options abroad. MBA in India offers affordability and strong industry connections, while an international MBA provides global exposure, networking opportunities, and potential high-paying job roles. However, the cost differences are substantial.

An MBA in India costs between INR 7-45 lakh, whereas an MBA abroad can range from INR 25-80 lakh, including tuition, living expenses, and additional costs like travel and visa fees. Loan interest rates also differ, with Indian banks offering education loan for MBA India ranging between 8%-12%, whereas international education loans range from 9%-14%.

Moreover, the return on investment (ROI) is affected. Top-tier Indian B-schools like IIMs, XLRI, and ISB offer an average salary of INR 12-25 LPA. Meanwhile, graduates from top international B-schools like Harvard, INSEAD, and London Business School can help you earn between USD 80,000-150,000 per annum.

Suggested Reads:

• 
  MBA Loan Options Abroad
• 
  Requirements for MBA Admission Abroad

If you also looking for an MBA abroad, the education loan process can be made easy with GyanDhan. All you need is to check your eligibility and everything else is our responsibility. We will let you know the available lenders, and help you in the interest rate negotiations and early approvals. 

Conclusion

Pursuing an MBA, whether in India or abroad, requires a significant investment. However, an MBA in India offers affordability, strong industry connections, and access to diverse job markets. So, choosing the right education loan can reduce the financial constraints do not hinder your aspirations.

By understanding the costs, loan options, interest rates, and return on investment, you can make an informed decision that aligns with your career goals. Remember, with the right planning and resources, you can take a confident step toward achieving your MBA dreams and unlocking a world of career opportunities.

Frequently Asked Questions