MBA Abroad Loan: Are you considering pursuing an MBA abroad but worried about the financial burden? Scared of getting stuck in a web of complicated banking procedures?
Don’t worry! I am here to guide you through the loan application process, right from selecting the right bank to disbursement and repayment.
Studying MBA abroad can open up a world of opportunities for you, but it is important to look before you leap. Understanding the cost involved and the types of funding options available is essential to plan your finances effectively.
Let’s explore the various MBA Abroad Loans that are available and how to go about the loan application process.
But, wait! Before jumping right into the loans, let’s take a moment to understand why studying MBA abroad has become so popular.
Why Study MBA Abroad?
Studying for an MBA abroad is an excellent opportunity to enhance your career prospects while gaining exposure to different cultures and economies. However, one of the most significant challenges aspiring students face while pursuing an MBA abroad is managing the cost of the program.
In this blog, I’ll discuss how pursuing an MBA abroad can benefit you, the cost associated with it, and various options for obtaining an MBA Abroad loan and paying for it in time.
Better Opportunities
Studying an MBA abroad opens doors to a world of opportunities to excel in your professional career. The international exposure you get is unparalleled and helps you grow on both personal and professional fronts.
Getting an MBA degree from a globally reputed university can help you stand out in the job market, and you are more likely to be preferred by top MNCs and corporates.
Exposure to Global Markets
An MBA abroad can provide you with an extensive global network and insights into different cultures and economies. This exposure opens a new world of possibilities for your career.
For instance, if you have studied an MBA in the US, it can help you get a job in diverse industries around the world. It gives you the ability to choose your dream job in your desired location worldwide.
International Networking
One of the most significant advantages of pursuing an MBA abroad is making contacts with peers and experts from different parts of the world.
It can be beneficial in the long run for your career growth. Networking with professionals from diverse backgrounds can help you gain new perspectives on business and learn new skills and knowledge.
Experience Different Cultures
In addition to those benefits mentioned above, studying an MBA abroad gives you a chance to experience a new culture and lifestyle. A new culture opens up new opportunities to explore new horizons intellectually, socially and academically.
It presents a great opportunity to enhance your personal development, expand your knowledge, and make new friendships that could last for a lifetime.
In conclusion, pursuing an MBA abroad offers you numerous opportunities to develop yourself and to grow exponentially in your professional career.
The next step is figuring out the cost of pursuing it. Stay tuned to get an insight into the costs and financing options that you can avail to accomplish your goal.
Quick Snapshot for MBA Abroad Loan
| Parameter | Details |
| Loan Amount | Up to 1.5 Cr with collateral Up to 1 Cr without collateral |
| Expenses covered | Tuition fee Admission fee Expenses for books Laptop or computer expenses Hostel or room rent Travel expenses Insurance Miscellaneous |
| Moratorium period | Course period + 12 months (or 6 months in some banks) |
| Repayment tenure | 12 to 15 years |
| Processing fees | 10,000 + 1500 GST or 1 to 2% of the loan amount depending on the lender |
| Subsidy | Not Applicable |
| Tax Exemption | Eligible under Income Tax Section 80E and 80C |
Cost of MBA Abroad Education
The cost of MBA Abroad Education is a major consideration for most students. It is important to understand the expenses involved in pursuing a degree abroad to manage your finances accordingly.
- Tuition Fees: The fees for a two-year MBA program can range from $50,000 to $100,000, depending on the university and location. Some universities also offer shorter programs, which may be less expensive.
- Living Expenses: This includes accommodation, food, transportation, and other daily expenses. Many universities offer on-campus housing options, which can be cost-effective, but off-campus options may be more expensive.
- Additional Costs: It include textbooks, laptops, and other academic supplies. Some universities also charge fees for extracurricular activities, health insurance, and other services.
- Travel Expense: Of course, you can travel abroad on costly international flights. But don’t worry, the MBA Abroad Loan includes the expense of travel.
While the cost of studying MBA abroad may seem daunting, it is important to remember that it is an investment in your future. The exposure to global markets and international networking opportunities can open up better career opportunities, leading to a higher return on investment.
So, before you decide to take an education loan for pursuing an MBA
abroad, it is important to calculate the total cost of the program, including tuition fees, living expenses, and additional costs from University Offer Letter or Admission Cell of University through Email.
This will help you determine the amount of loan you need to take and plan your finances accordingly.
Types of MBA Abroad Education Loans
There are various types of abroad education loans available to students who wish to pursue an MBA from a foreign university.
The types of loans that are offered by banks and other financial institutions differ on the basis of eligibility criteria, interest rates, and repayment terms.
It’s essential to understand the various types of education loans to make an informed decision:
Secured Loans
A secured loan is a loan backed by collateral, such as a property or a fixed deposit. These loans have a lower interest rate as compared to unsecured loans.
However, it’s essential to ensure that you repay the loan on time, or else, the bank can seize the collateral.
Unsecured Loans
An unsecured loan does not require collateral and is based on the borrower’s creditworthiness. The Maximum education loan you can avail without offering collateral to bank is Rs. 7.50 lakhs.
These loans have a higher interest rate as compared to secured loans. It’s important to maintain a good credit score to avail of this type of loan.
Loan Against Property
A loan against property is another type of secured loan that is provided by banks and financial institutions. These loans come with a lower interest rate and longer repayment tenure.
However, the borrower’s property is mortgaged, and if the loan is not repaid on time, the bank can seize the property.
It’s important to assess your financial situation and make an informed decision before opting for any type of education loan.
Consider factors such as the loan amount, interest rate, repayment period, and eligibility criteria. It’s also essential to maintain a good credit score, as it plays a crucial role in availing of an education loan. Remember that opting for an education loan is a major financial commitment and should be considered carefully.
In the next section, we will go through the top banks providing abroad education loans for MBA and their features.
Top Banks Providing Abroad Education Loans for MBA
When it comes to financing your MBA education abroad, there are several banks in India that offer education loans with attractive interest rates and flexible repayment options.
Here are some of the top banks that provide abroad education loans for MBA studies:
| Name of Institution | Loan Details |
| HDFC Bank | Maximum loan amount is 20,00,000 INR. Repayment Period is 15 years after the moratorium period. The interest rate starts from 9.55% p.a. 15% loan margin required. |
| State Bank of India | Maximum loan amount is 1,50,00,000 INR. Repayment Period is 15 years. The interest rate starting from 8.65% p.a. A loan margin of 15% is required. |
| Punjab National Bank | Maximum loan amount is determined on the basis of repayment capacity and requirement. Repayment Period is 15 years. Interest rate starts from RLR+BSP+2.00% onwards. A loan margin of 15% is required. |
| Axis Bank | Maximum loan amount is 20,00,000 INR. Repayment Period is 15 years. Interest rate starts from 13.70% p.a. A loan margin of 15% is required. |
| Bank of Baroda | Maximum loan amount can go up to 80,00,000 INR. Repayment Period is 15 years. Interest rate starts from 9.85% p.a.0% loan margin. |
| ICICI Bank | Maximum loan amount up to 1 crore INR Repayment Period 15 years Special Scheme of Girl Students |
Eligibility Criteria for MBA Abroad Loan
- Candidate should be an Indian national.
- Secured admission to professional/technical courses abroad through entrance test/merit-based selection process.
- The age limit for most banks is between 16-35 years, although it may vary from bank to bank.
- Most banks require a co-borrower, usually a parent, spouse, or sibling. The co-borrower’s income, credit score, and employment history are also taken into account.
Documents Required for MBA Abroad Education Loan
- KYC of applicant and co-applicants
- Academic Records
- Proof of admission (Offer Letter)
- Entrance Exam Result (if applicable)
- Statement of cost of study/ Schedule of expenses / Fee Structure of University
- Income Proof for Salaried Co-applicant/ Guarantor (if applicable)
- Bank account statement for last 6 months etc
- Property Documents (if applicable)
- Last 3 years placement record of University (If applicable)
Application Process for MBA Abroad Education Loans
Step 1: Start by listing down banks that offer education loans for MBA abroad with flexible terms and affordable interest rates.
Go through their websites, and compare their loan products in terms of interest rates, processing fees, loan amounts, repayment periods, etc. Narrow down your options based on your requirements and budget.
Check out Education Loan Interest Rates 2023
Step 2: Prepare the necessary documents as per Documents Required
Step 3: Go to Bank and Submit your documents along with Education Loan Application Form and Two Passport Size photographs
Step 4: Most banks offer online submission of loan applications, making the process hassle-free and convenient. You can use vidyalaxmi portal to submit your application for any bank.
Step 5: After you submit the application, the bank will verify your documents and eligibility criteria.
Step 6: Bank Official will visit your address to prepare Pre-Sanction Visit Report. And after all verification, Loan Officer will draw your CIBIL.
Step 7: If your application passes verification, the bank will disburse the loan amount to the university or institute directly.
Charges, Margin and Security
Processing Charges
- Loans upto Rs. 20 lacs : NIL
- Loans above Rs. 20 lacs: Rs. 10,000 (plus taxes)
Margin Amount Required
- Up to Rs 4 Lacs – Nil
- Above Rs 4 Lacs – 5% for studies in India, 15% for studies in abroad
Security Required
- Up to Rs. 7.50 Lacs: Only Parent/ Guardian as co-borrower. No Collateral Security or third party guarantee
- Above Rs. 7.50 Lacs: Parents/ Guardian as co-borrower and tangible collateral security
Repayment of MBA Abroad Education Loans
Now comes the part where you need to repay the education loan you availed to pursue your dream degree.
It’s essential to understand the repayment process before applying for an abroad education loan because it will help you plan your finances and avoid any late payments or penalties.
Moratorium period
It is the grace period given by the bank, allows you to start repaying the loan after completing the course. During this period, the borrower doesn’t have to pay the principal amount.
However, the interest accruing will be added to the loan, increasing the total amount. Generally, banks provide a moratorium period of six months to one year, giving the borrower enough time to get a job and start earning.
The repayment period is the time you have to pay back the loan amount. It differs from bank to bank, ranging from five to fifteen years.
It’s crucial to choose the right tenure as it will determine the EMI (Equated Monthly Installment) amount. Longer tenure means smaller EMI but higher interest outgo, while a shorter term has higher EMI and lower interest.
Some banks also allow you to choose a flexible repayment plan where you can increase or decrease the EMI amount.
Prepayment charges
It is the fees you pay when you repay the loan before the due date. While some banks don’t have any prepayment charges, others charge a percentage on the outstanding loan amount.
It’s advisable to check the prepayment clause before applying for the loan so that you can plan your finances accordingly.
Collateral release
Collateral release is when you receive the original documents of the collateral pledged while availing the loan. Banks keep the collateral as security till the time the borrower repays the entire loan amount.
Once you pay the loan in full, the bank will release the collateral documents.
In conclusion, availing an abroad education loan for MBA is a smart choice, but it’s crucial to understand the repayment process before applying for one.
It’s advisable to choose the right repayment tenure and avoid any late payments or penalties.
Happy Repaying!
