If you are planning to pursue MBA in 2016 and is about to get admission offer from some good B-school like IIM, XLRI, IMI, IMT, MDI, SPJIMR, NITIE, FORE, BIMTECH, TAPMI among others but need money to pay for the tuition, hostel and other fees which run in lakhs of Rupees, there is no need to worry as you have number of samaritan banks who can finance either the entire tuition fee and other expenses like hostel charges, study material, laptop without any contribution from you or may ask you to contribute a little in the range of 5 to 10 percent, if higher amount is borrowed. This contribution is called the margin money and banks ask for it to involve the borrower’s funds to some extent.
Suppose total of fee, hostel, laptop, study material expenses for the MBA education comes to Rs. 10 lakhs. If you approach the bank and the bank is satisfied with your need and agrees to finance your MBA education in full, you will not contribute anything towards the margin money. But, if bank says that you have to contribute 5% of the total project cost i.e. the fee and other expenses required to pursue MBA education, you will have to deposit Rs.50000 with the Bank as margin money and the rest Rs.9.5 lakhs will be financed to you by the Bank.
Check for the cheapest interest rate
Funding from banks for MBA education in top B schools is not so expensive looking at the trend as the interest in the range of 9.70 to 12 percent per annum is charged, depending upon the loan scheme of the Bank. It comes to less than 1% per month.
It is probably State Bank of India which is providing the cheapest loan at 9.70% and is offering full loan amount without margin to pursue MBA from top rated B schools. Besides loan facilities are available from almost all the banks including Punjab National Bank, Punjab & Sind Bank, Axis Bank, ICICI bank, Central bank among others.
Know when to begin Repayment
Most of the banks have framed the maximum period for repayment of Loan taken to pursue education. The loan with interest should be repaid in a period of 5 to 7 years. This period will begin after 6 months of the completion of the course or from the date of getting employed, whichever is earlier.
Key tips before applying for loan
Should you approach the Bank immediately on knowing that your name figures in the merit list or wait a little? Following are the key tips to follow before proceeding with your study loan plans
- -- Wait for the admission offer
- -- study and understand the key features of loan schemes of different banks. Now a days it has become easier as the information is available on bank’s site
- -- Find out the fee structure and the best suitable bank for you that can finance maximum at the cheapest rate and with lowest margin
- -- Watch out for any hidden charges, processing fee on loan. Although Banks have waived processing charges on Study loan for premier B schools, you have to verify the fact before entering the agreement.
- -- Better to approach that bank where you already have an account. Try to get maximum information. This is no longer a bank dominated world, you have all the right to know the details before availing the loan.
- -- Every good B school has a Bank branch. Usually these banks get the list of new admissions from the institute with all the details and send in principle loan sanction letter to the eligible candidates. You should contact the loan sanctioning branch of the bank and thereafter as per the guidance from this branch, should approach the concerned branch of this bank.
- -- Most of the time completion of the loan formalities and disbursement are done by the branch which is nearer to your permanent residence.
- -- In most of the Banks simple interest is charged during course period. If you wish, you can repay the interest part to reduce loan burden in future.
Required Documents
Following documents can be asked by the Bank before processing the study loan for MBA education in a premier B school
1. Admission letter of the Institute.
2. Letter from institute indicating full fee structure of the course.
3. Passport size photograph of the student (2-3) and parent (If he/she is the co borrower)
4. Copy of PAN CARD of the student and parent (If he/she is the co borrower)
5. Copy of Passport/Driving License/ Voter ID/ Electricity bill (to determine the address proof).
6. Copy of Class 10th, 12th, and Graduation mark sheet and certificate.
7. Original copy of the receipts of any fee paid to the institute, so far, pertaining to course fee.
Don’t give-up and don’t believe all that told to you by Bank official
Please note that many functionaries at the Bank are sometimes not aware about the different education loan schemes of their Bank. They may not also have updated information about the scheme. They may also tell you that they do not extend study loan or their branch is not designated to extend the facility or many other things due to poor knowledge of these bank functionaries in regard to execution of documents for the scheme and their bid to avoid learning about the loan scheme.
So don’t believe on their words. Even if the bank’s branch is not designated, it must be linked to some nearby branch office, where it would send your study loan proposal to get it sanctioned.
You will find the entire scheme on the Bank’s website. It will be better to read and understand it first. It will help you to discuss the things in detail at the bank and get your job done without waste of time.
Lodge a complaint, if not satisfied
It at any point, you don’t get satisfactory reply or feel harassed, first try to know whether the person sitting behind the desk at bank is correct or is trying to avoid the work. If he/she is simply buying time or not doing the things, immediately lodge a complaint on phone and mail without fail.
If it is a public sector Bank, it will be better to write a letter to their head office and send the hard copy detailing your grievance by Registered or speed post. Give your contact number and address below your name. Rest assured that in 5-7 days, you may find the same bank functionary contacting you offering all the assistance.
The reason behind sending the hard copy is that many officials at these banks do not even open the mails and their mail boxes get overflowed with mails. Even if they try to open the mail, the one word option ‘close’ is clicked by them to get rid of the complaint. The grievance then gets refreshed with a new date and the process goes one but it is not solved for a long time. However the advisory is that not to delay the things.
Related Article
MBA Admission 2016: Don't fall prey to tall claims; check for the updated AICTE Mandatory disclosure
MBA admission 2016: Chances to get an IIM with low scores in CAT 2015; wait till April
MBA Admission 2016: Placement packages rising; right time to pursue your MBA
MBA Admission 2016: How you can manage fee & other Expenses without making a big hole? Check now
MBA Admission 2016: Does it matter so much if I couldn't do my MBA from an IIM?
MBA Admission 2016-18: Top 10 PGDM B schools-application deadlines getting over; take your pick
Stay tuned to MBA Universe.com for MBA admission 2016 and tips on financial assistance to pursue MBA
