MBA undoubtedly has emerged as one of the most popular post graduate programs in 21st century India. There are a number of reasons why it is enjoying such widespread popularity amongst students from all disciplines – across the country. However, considering the fact that MBA programs offered by a lot of renowned B-Schools usually tend to be more on the expensive side for the average Indian to get a bank loan for MBA programs. Bank loans do in fact a play a pivotal role in helping a lot of MBA aspirants pursue their dream.
In today’s special, we are going to delve deeper into how you, as an MBA aspirant, should approach a bank for loan purposes.
First and foremost, you must figure out which college or university you want to join. While deciding on the college/university, do consider the reputation and track record of the different options at your disposal. There are a number of factors based on which you can evaluate a college – placement record being one of the most important criteria that you must not overlook. Remember, if you are joining a not-so-reputed institute, you may not attain good financial standing upon completion of the course. In such cases, the debt (read: loan) is likely to turn more or less indefensible.
It is really important that you know how big a loan you may require. Therefore, do make an assessment of the available funds at your disposal – then figure out how much deficit (if any) you are in vis-à-vis the overall cost associated with the program you are planning to enroll in.
Also, you must consider the fact that there may be a lot of associated surcharges accompanying the loan. Everybody knows of the interest that they would have to pay against the loan/debt taken. However, not all of us are aware that banks may impose a wide variety of additional charges alongside the annual/monthly interest rate. Therefore, it is important that you clarify everything with the bank before formally applying for a loan.
In India, bank loans under INR 400,000 don’t require any security deposit or margin. Anything between INR 400,000 and INR 750,000 requires a third party guarantee (signature from parents/relative) and any loan exceeding the INR 750,000 threshold will need a collateral.
The highest educational loan for courses offered by Indian colleges or universities usually stand at INR 10,00,000 or less (the amount however, varies from bank to bank). Both private and nationalized banks offer educational loans, provided the applicant is an Indian national.
Last but not the least; don’t forget to ask the following questions to your bank before applying for a loan:
- Will the bank allow some extra time to start with the repayment process, if required?
- What are the floating and fixed interest rates
- Will the debtor have to pay compensation if the loan is repaid in full before the due period?
- When will the debtor be required to start the reimbursement