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MBA Education Loans for CAT 2018 Aspirants

Last Updated - August 18, 2018

Not only preparing to get into top MBA colleges is a cumbersome task but also funding the course is equally difficult. Securing the offer letter is not all that is required for admissions but also the resources to fund the fees.

For a number of candidates wanting to clear CAT, the course fee of an IIM or top B-school can be a significant concern. While their course fee is exorbitant, we can not deny the fact that they offer world-class facilities/ infrastructure and unexcelled faculties. The fee charged these colleges in turn makes MBA one of the most expensive courses in India and abroad.

CAT Application FormCAT Exam PatternCAT Syllabus

For the academic year 2018, CAT is scheduled for November 25, 2018 and the registration for same is done from August 8, 2018 to September 19, 2018 in online mode. Candidates who wish to apply have to pay an application fee of INR 1900 at the time of application form submission. Applicants belong te reserved category have to pay INR 900 as application fee. 

For your reference, here is the course fee for some of the top MBA colleges accepting CAT Score:

IIM BangaloreINR 19.50 lakh
IIM AhmedabadINR 21 lakh
IIM CalcuttaINR 19 lakh
DMS, IIT DelhiINR 4.39 lakh
DoMS, IIT MadrasINR 6 lakh
IIM LucknowINR 14 lakh
XLRI JamshedpurINR 16.8 lakh
IIM KozhikodeINR 16 lakh
DoMS, IIT RoorkeeINR 4.18 lakh

We believe that money shouldn’t hamper the aspirant's dream and therefore many B-Schools, through tie-ups with banks offers educational loans at nominal interest rates for which repayment structure is also different than other loans.

Apart from tie ups, banks also provide loans on one to one basis for students wishing to pursue their higher studies. Before candidates opt for any of the education loan schemes, it is important that they know the terms and conditions of each and every scheme so the loan doesn’t haunt them once their MBA is complete.

CAT education loan will not only help you manage your finances for the course but also lets you save for the unforeseen expenses during the course duration. Most of the aspirants are not familiar with the complete details about the education loan. To reduce the burden of repayment, aspirants must choose the loan with least interest value and other concessions. Here is a complete guide for MBA aspirants who wish to opt for education loan.

Who Can Apply for MBA Loans?

  • It is important to know that only the candidates who are citizens of India and are having a documentary proof of admission can apply for education loan.
  • Many lenders have set the age limits for loan which ranges between 16 years and 35 years.
  •  The top B-Schools of India like IIMs have lined up with several banks to which the institute provides information about the candidates selected. These banks then get in touch with the candidate to facilitate the funding for the course.

Read CAT Eligibility Criteria

How to Choose the Right Bank?

Each financial institution sets the upper limit of the loans they can provide. Candidates must evaluate all their expenses and then plan further to choose the best possible option.

In case of any additional expenses requirement, candidates must manage them well in advance. Aspirants must know that there are certain expenses covered under the education loan which include the following:

  • Tuition fee
  • Hostel fee/ accommodation
  • Library & Laboratory fee
  • Examination fee
  • Travel expenses, Passage money for studies abroad
  • Security deposits
  • Project work expenses
  • Study material expenses (books, laptop, etc)
  • Study tour expenses

With innumerable options available for funding, it is necessary that the aspirant assesses the choice from every aspect. Candidates must consider certain things before they make the final decision:

Rate of Interest

Every bank offers education loan at different rate and the maximum limit also varies. Given below are some of the most preferred loan providers in India:

Bank RateInterest RateMaximum Loan AmountRepayment duration
State Bank of India9.35% to 10.70%Upto 30 lakhs for IIMs and other top B-Schools7 to 12 years
Allahabad BankFor IIMs is 8% and for other institutes is 10%Upto 20 lakhs7 years
Bank of Baroda20 lakhs/ 10 lakhs (depending up on the institute)10.5% to 11.5%5 years
Punjab National BankUpto 20 lakhs8.15% to 8.75%10 to 15 years
IDBI BankUpto 20 lakhs9.7%10 to 15 years

*Most of these banks provide concessions in interest rates for female applicants.

Documents Required

Candidates must keep the following documents handy before they apply for education loan:

Documents Required
Proof of admission by the B-SchoolMark sheet of the highest qualification
Estimate of expenses and schedule of fee payment at the instituteBank statement of last 6 months
Asset and liabilities statementIncome tax assessment records (not earlier than 2 years)
Identity proofResidential proof

Guarantee/ Collateral Requirement

  • Many banks do not provide the 100% funding for MBA through CAT 2018.
  • Most of the banks require a third-party guarantee for loans ranging between 4 lakhs to 8 lakhs.
  • Collateral will be required in case the loan requirements exceeds the limit of 8 lakhs.

Repayment Process

  • The repayment usually begins after six months of job or after one year of course completion, whichever is earlier.
  • Depending up on the amount to be repaid and other terms and conditions of the loan, repayment period can range from anywhere between 1 year to 9 years.
  • Aspirants usually try to repay their loan as soon as possible so as to get over the debt. But what needs to be understood is to opt for a longer period repayment procedure as during the loan repayment, candidate will be exempted from the income tax. This will prove to be beneficial in the long run.

How to Apply MBA Loans?

  • Most of the financial institutions (banks and NBFCs) provide education loans options online.
  • Candidates have to visit the respective website of the bank to apply for education loan. The steps include:
  1. Visit the official website of the bank.
  2. Visit the loan section at the home page.
  3. Click on education loan link.
  4. Fill the application form and provide all the valid details.
  5. Finally submit the application form.  
  • After the successful submissions of the loan application, bank will contact the students or the guardian for any of the additional information requirements.
  • Candidates will also have to meet the bank representative at the guardian’s residence and submit all the necessary documents for the purpose.
  • After all the formalities are complete, the bank will send the loan agreement to the student. 
  • Candidates must go through the agreement carefully after which the signed document must be submitted to the bank for further process. to submit applications online.

We hope this article was helpful in getting to learn about MBA Loans for India and abroad. Make sure you have all the key papers and details available with you.



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