How To Get Education Loan For IIM:Â MBA education costs are getting higher. It has been rapidly increasing and now it is somewhere between 20L to 30L. Because of this, it's becoming harder for students from middle and lower-income families to afford it. There comes the saviour for students which are loans from banks and financial institutions that can help in this situation. Today, we will discuss all about the education loan process for IIM and also about the interest rates by different banks.
The Indian Institutes of Management (IIMs) are the best MBA Colleges in India but have very high tuition fees for their main programs. In the last few years, 9 out of 21 IIMs have increased their fees by 5% to 29.6%.
The current fees for the flagship PGP programmes are Rs.25 lakh at IIM Ahmedabad, Rs.24.5 lakh at IIM Bangalore, and Rs.31 lakh at IIM Calcutta. Now these are huge amounts for someone who comes under Economic Weaker Section. So, to afford such a high fee, students often end up taking loans.Â
Taking a loan to cover your expenses at IIMs is a better option than paying all the money at once. Most IIMs have a list of financial institutions that offer loans for their students on their websites. Almost all banks offer student loans to students with a good academic record. Most banks are willing to provide up to Rs.30 lakh for education. However, if you are aiming to study at an IIM, this amount may not be enough to cover most of your fees. Therefore, many banks offer special loan options for students admitted to IIM colleges.
Most students take a loan for their education. The interest rate for these loans is from 8% to 13%, depending on the bank and college. For all IIMs, the interest rate is usually on the lower side and covers many costs, including tuition, books, laptops, and monthly expenses. The loan processing period can be from 1 day to 2 weeks. Many banks set up booths at the college during registration to process loans quickly. You can take out a loan for the full or part of your education fees, and even get reimbursed if you pay before the loan is processed. There is no need for a mortgage; you can get the loan without a co-borrower or guarantor, just in the name of the student.
An Education Loan for an MBA usually covers most of the expenses during the two-year program. However, it may not cover minor expenses like books, field visits, and library subscriptions, depending on the lender. You should clarify these details before applying for the loan. Here's what MBA student loans typically cover:
Bank/Loan | Max Amount | Rate of Interest | Security | Margin | Moratorium Period | Repayment Period | Processing Fees |
IDBI Bank Premier Education Loan | Rs.20 lakh | Base rate = 9.65% | Rs.4 lakh to Rs.10 lakh - Third party guarantor | 5% above Rs.4 lakh | Course duration + 1year/6 month of getting a job, whichever earlier | Below Rs.7.5 lakh - 10 years | Nil |
Above Rs.10 lakh - Tangible collateral | Above Rs. 7.5 lakh - 15 years | ||||||
- | - | ||||||
OBC's Customized Education Loan Scheme IIMs, IITs & XLRIs | Rs.15 lakh | Up to 10.50% | Parents/Guardians as co-borrower | Nil | Course period + Grace period based on predefined conditions | Upto Rs.7.50 lakh - 10 years | Nil |
Above Rs.7.50 lakh - 15 years | |||||||
SBI's Scholar Loan | Rs.40 lakh | Up to 10.20% | Parents as co-borrower | Nil | Course period + 1 year | 15 years | Nil |
CBI's Special Education Loan Scheme to IIM Students (Cent Vidyarthi for IIM Students) | Rs.30 lakh | MCLR = 12 Month | Assignment of future income | Nil | Course period + 1 year | 15 years | Nil |
BOI's Exclusive Education Loan Scheme for Students of Premier | Rs.20 lakh Rs. 30 lakh with 100% tangible collateral | MCLR = 9.25% | Assignment of future income + parents as co-borrower | Nil | Course period + 1 year | 15 years | Nil |
Union Bank's Special Education Loan Scheme | Rs.30 lakh | 8.10% | Parents as co-borrower | Nil | Course period + 1 year | 15 years | Nil |
Axis Bank's Education Loan | Rs.20 lakh | 8.85% | Collateral or guarantor depending on case-to-case basis | 5% above Rs.4 lakh | Course period + 1 year | 15 years | Nil |
UCO Bank's Super Premier Educational Loan Scheme | Rs.30 lakh | 8.40% | Nil | Nil | Course period + 1 year | 15 years | Nil |
Before taking an MBA education loan, consider these five factors:
Typically, you'll need KYC documents (identity and address proof), bank statements from the last six months, an admission letter, and academic certificates from SSC, HSC, and degree programs.
Interest rates generally range from 8% to 13%, depending on the lender and the institution. For IIMs and other top-tier schools, rates are often on the lower end.
A moratorium period is a grace period during which you don't have to make any loan repayments. This period often lasts until a few months after graduation.
Yes, many banks offer a 0.5% interest rate concession on education loans for female students, promoting higher education for women.
Most premier education loans do not require collateral, but parents usually need to be guarantors or co-borrowers.
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