Education loans also referred to as student loans, are best used to cover financial obligations to study in colleges, either in India or abroad. Loans are provided by public and private sector banks, and unlike other retail lending, education loans come with a moratorium period plus one to two years extension for repayment of loans. When pursuing an MBA in India, obtaining a suitable education loan can significantly ease the financial burden. Several banks offer competitive education loan products tailored for MBA students. Here are some of the best banks in India for MBA education loans, along with their key features:
There are two types of education loans that lenders provide as student loans for MBA in India
Collateral education loans: Collateral education loans are granted based on collateral security. Here, students are required to pledge the collateral with the lender to get an education loan. The accepted collateral as security includes immovable property (house, flat, non-agricultural land with defined boundaries), and liquid security (fixed deposits, term insurance policies, Government bonds). |
Non-collateral education loans: Non-collateral education loans are granted based on a student's past educational records and their co-applicant's financial profile. In this, students need not pledge any collateral security to be eligible for a non-collateral education loan. Therefore, students are required to pay close attention to the eligibility parameters set by the financial institutions. |
Best Education Loan in 2024 |
|
State Bank of India |
Best customized education loan with low interest rates. |
Punjab National Bank |
Best for students in the OCI category, or born abroad but studying in India. |
ICICI Bank |
Best for studies in reputed colleges and universities in Canada. |
Bank of Baroda |
Best in loans for child’s studies pursuing schooling from nursery to class XII. |
Bank of India |
Best in loans with nil processing fees and lower interest rates. |
Bank of Maharashtra |
Best in loans to get concessions on rate of interest for meritorious students. |
Central Bank of India |
Best education loan for executives pursuing MBA from reputed management institutes. |
Almost every public sector bank provides an MBA education loan. Among the public sector banks and financial institutions that offer MBA admission education loans, the following are the top education loan providers in India:
Banks |
Loan Amount in INR (max.) |
Interest Rate (in %) |
SBI |
30 |
8.05-10.15 |
PNB |
75 |
8.35-10.95 |
Canara Bank |
40 |
8.65-10.75 |
Dena Bank |
15 |
10-11.8 |
Central Bank of India |
20 |
8.9-10.4 |
Punjab & Sind Bank |
10 |
9.75-10.75 |
Union Bank of India |
30 |
8.65 onwards |
MBA education loans are widely available from private banks and NBFCs. The following are some of the private sector banks and non-banking financial companies that offer MBA education loans:
Banks |
Loan Amount in INR (max.) |
Interest Rate (in %) |
IDBI Bank |
20 |
8.5-10.5 |
Axis Bank |
75 |
8.8 onwards |
ICICI Bank |
50 |
10.5 onwards |
Avanse Financial Service |
No limit |
10-16.5 |
Kotak Mahindra Bank |
10 |
11.5-24 |
HDFC-CREDILA |
45 |
6.7 onwards |
Bank |
Interest Rate: |
Loan Amount |
Repayment Tenure |
Features |
1. State Bank of India (SBI) - SBI Scholar Loan Scheme |
Starts at around 7.25% (varies based on the type of institution) |
Up to ?40 lakh for studies in India, with higher limits for select premier institutions |
Up to 15 years |
No processing fees for loans up to ?20 lakh, concessional rates for premier institutions, and a moratorium period covering the course duration plus 12 months. |
2. HDFC Bank - Education Loan for Indian Education |
Starts at around 9.55% |
Up to ?20 lakh |
Up to 15 years |
Quick disbursement, tax benefits under Section 80E, and flexible repayment options. |
3. Punjab National Bank (PNB) - PNB Saraswati |
Starts at around 7.30% |
Up to ?10 lakh for studies in India |
Up to 15 years |
No processing fees, concessions for girl students, and a moratorium period including course duration plus one year. |
4. Bank of Baroda - Baroda Gyan |
Starts at around 7.85% |
Up to ?10 lakh for studies in India |
Up to 15 years |
Concessions for girl students, interest-free moratorium period, and no processing charges. |
5. ICICI Bank - Education Loan |
Starts at around 9.50% |
Up to ?50 lakh for studies in India |
Up to 10 years |
Fast processing, flexible repayment options, and a moratorium period covering the course duration plus six months. |
6. Axis Bank - Education Loan |
Starts at around 13.70% |
Up to ?75 lakh |
Up to 15 years |
No prepayment charges, quick loan processing, and flexible repayment options. |
7. IDBI Bank - Education Loan |
Starts at around 7.50% |
Up to ?20 lakh |
Up to 15 years |
Concessions for female students, interest subsidy schemes, and a moratorium period covering the course duration plus one year. |
8. Union Bank of India - Union Education |
Starts at around 7.80% |
Up to ?15 lakh for studies in India |
Up to 15 years |
No processing fees, a special scheme for students of premier institutions, and tax benefits under Section 80E. |
Compare Interest Rates: Lower interest rates can significantly reduce the total repayment amount. |
Look for Concessions: Many banks offer lower interest rates or fee waivers for female students or those admitted to premier institutions. |
Check for Tax Benefits: Education loans typically offer tax benefits under Section 80E of the Income Tax Act. |
Understand Repayment Terms: Consider the repayment tenure and any moratorium period to plan your finances effectively. |
Review Loan Amounts and Coverage: Ensure the loan amount covers all your educational expenses, including tuition fees, accommodation, and other related costs. |
Students can now apply for an MBA education loan entirely online. Students can apply for college loans online with most banks. The steps for applying for an MBA education loan are outlined below:
Ques. Public vs Private Banks for MBA Loans?
Ans. Both offer competitive rates, but public sector banks (SBI, PNB) generally have lower interest rates. Private banks (ICICI, Axis) may offer faster processing and higher loan amounts, but interest rates might be steeper.
Ques. Can I get an MBA loan without collateral?
Ans. Yes, but it's more likely with a strong academic record, a co-applicant with a healthy income, or applying to a prestigious institution.
Ques. What are the interest rates for MBA education loans?
Ans. Rates can vary depending on the bank, loan amount, course type, and your profile. The range mentioned in this blog is from around 7% to 16.5%. It's crucial to compare rates from multiple banks.
Ques. What are some important factors to consider when choosing an MBA loan?
Ans. Interest Rate: Opt for the lowest rate possible to minimize your total repayment amount.
Ques. What documents are typically required for an MBA education loan application?
Ans. Here are some important documents
Ques. Can I apply for an MBA loan online?
Ans. Yes, many banks allow online applications for education loans. Check the bank's website for details.
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