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    How to Finance Your MBA Abroad? Know about Collateral Loans, Non-collateral Loans, Loans with Cosigners, and more

    Rachita Mitra Rachita Mitra
    Content Curator

    Getting 2 years MBA done from the top MBA colleges includes around INR 1 crore and it is definitely a huge amount. But wait, this does not mean that you have to compromise with an executive MBA degree. We have found 6 alternatives to finance your MBA studies after cracking GMAT that too in the foreign lands. Go through the next sections to know how to finance your MBA abroad?

    Collateral Loan

    MBA aspirants can get collateral educational loans. To take collateral loans, a guarantee (house, property, investment, PF, FD, Government bonds) of the candidate or his or her parents will be needed. The loan amount here is 60-70% (sometimes 85%) of the asset amount here.

    Upon completing the MBA, the candidates will require to repay the loan amount and they don’t need to be worried thinking of the loss of the guaranteed item invested. The bank will only repossess the asset only if the candidate cannot repay the dues at any cost.

    Check the table below for more details on the loan amount:

    Bank NameLoan Amount For Domestic EducationLoan Amount For International Education
    HDFCUp to 15 lakhsUp to 20 lakhs
    HSBC--
    SBIUp to 15 lakhsUp to 20 lakhs
    Punjab and Sind BankUp to 15 lakhsUp to 20 lakhs
    IDBIUp to 15 lakhsUp to 20 lakhs

    Non-collateral loans

    Our next option to finance the international MBA is non-collateral loans. Here, the candidates will not need to show their assets to get this loan amount, but unlike the collateral ones, this is a very low amount loan.

    Bank NameNon-Collateral Loan AmountCollateral Needed Or Not
    HDFCUp to 7.5 lakhsNo
    HSBCUp to 5 lakhsNo
    SBIUp to 4 lakhsNo
    Punjab and Sind BankUp to 4 lakhsNo
    IDBIUp to 4 lakhsNo

    The approximate percentage of the non-collateral loan is 4 lakhs in most of the banks and to get higher than that, collateral may be required. These loans are mainly given based on the admission and rank of the university or B-school of the candidates.

    Apart from the banks, there are non-banking institutions like Avanse, Prodigy Finance, Stilt, Gyandhan, mPower, and Credila offer non-collateral loans. Here the amount is up to 7.5 lakhs. Apart from the admission and the rank, here, potentials of the candidates in that specific field and employment history of the candidate are also checked. Check the table below for the amounts offered here:

    Bank NameNon-Collateral Loan AmountCollateral Needed Or Not
    HDFCUp to 7.5 lakhsNo
    HSBCUp to 5 lakhsNo
    SBIUp to 4 lakhsNo
    Punjab and Sind BankUp to 4 lakhsNo
    IDBIUp to 4 lakhsNo

    Prodigy Finance had served $240 million in august 2017 and became one of the commercial lenders with a low rate of interest. Though there is a possibility that the interest of Prodigy finance increase by 2% to become 10%, yet it is one of the most reliable non-banking educational loan providers.

    Education Loan through Co-signer

    For this type of educational loans, the candidates only need to have a close relative who has to be a US citizen. Here this close relative will be the guarantor. He or she will sign the contract and the candidate will be liable to pay the amount after the graduation is done.

    The co-signer acts as a risk-reducing agent for the banks – in case, the candidate cannot pay the money back, the co-signer will have to. It is a bit risky for the person, however, institutions like Wells Fargo and Citizens Bank help the candidates get an educational loan with co-signer.

    Education loan without Collateral and co-signer

    Well, it is possible to get an education loan without collateral and co-signer – the candidates simply need to get the loan from the B-schools. Here the B-school itself will be the guarantor. The universities mentioned below offer the loan facility to the candidates:

    1. Chicago Booth
    2. Duke University – Fuqua School of Business
    3. Haas School of Business - Berkeley
    4. Harvard Business School
    5. Johnson Graduate School of Management – Cornell University
    6. Kellogg School of management
    7. Kenan-Flagler Business School
    8. MIT Sloan
    9. NYU Stern School of Business
    10. Stanford University
    11. The Darden School of Business
    12. UCLA Anderson
    13. Wharton School
    14. Yale School of Management (SOM)

    Self-Financing

    Self-financing is nothing but planning the educational loans with family or friends with a promise to return it on time or using own savings (bonds or other assets) to finance the MBA abroad. It is one of the most availed ideas to finance the abroad MBA.

    Scholarships

    There are university scholarships as well – the candidates need to be meritorious for this. GMAT score happens to be a great advantage here. To avail the scholarships, the candidates can check the university page first. Plus, there are national scholarships. But the factor is the candidates need to have academic excellence to get the scholarships.

    So, these are the ways of financing your MBA programs and for a meritorious candidate, it will not be a great deal to finance their MBA in abroad.

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