MBA Admission 2015: Education loans and current interest rates

With soaring inflation, an MBA degree from top B-Schools in India has become an expensive affair. The course fees is often beyond the reach of parents or an individual. But thanks to education loans, many candidates are now able to pursue MBA degrees.

Various banks and private financial institutions are offering a wide range of loans to students. These hassle-free schemes ensure that every MBA candidate is able to fulfill their education dreams.

Most banks offer loans up to Rs 10 lakh for studies in India and up to Rs 20 lakh for studies overseas. The disbursement and quantum of loan given varies from bank to bank. Generally, the loan covers up to 75% to 85% of the entire tuition fees, hostel and mess charges, library fees and any other fees/charges payable to the institution.

For repayment, a window of three to ten years is given to candidates. There is also a provision of grace period for one year (or six months) after the completion of studies. Some banks also offer concession of 1% to borrowers, provided they have been regular in loan repayment.

For candidates who have made it to top B-Schools like IIMs, special interest rates are offered.

Required documents include the complete loan application packet, identity proof, income proof, residence proof, six months record of the passbook, the guarantor’s note and other supporting documents such as letter of admission, mark sheets, education records etc, as specified by the bank. List varies for each bank.

For loans above Rs 4 lakhs, a collateral security or a co-applicant for the loan is required. This acts as a guarantor. Collateral security can either be anything from fixed deposits, mutual fund, liquid cash, property or insurance policies. Often, parents act as co-applicants for the loan. Generally, the bank treats parents as co-borrowers.

Below, Shiksha.com brings to you a list of banks, their loan offerings and interest rates along with a various dos and don’ts before applying for a loan.

Bank Loans & Interest Rates