Best Banks for MBA Education Loans in India: Top Options and Key Features

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:

Types of education loan

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.

Loans Offered by Public Sector Banks

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

Loans Offered by Private Sector Banks and NBFCs

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.

Tips for Choosing the Right Education Loan

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.

How to Apply for an Education Loan for an MBA?

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:

1. Examine several loan options and select the one that fits your needs
2. Fill out an application for an education loan online or go to the bank
3. A bank employee will normally contact students by phone. The bank agent will ask about the student's needs and answer any queries concerning the loan program over the phone
4. A bank representative will pay a visit to the student's home and assist him or her in filling out the application form. At the bank, the application form will be collected, together with the appropriate supporting documents
5. The bank will examine the application form.
6. The bank may request additional information from the student or respond to any additional inquiries.
7. The bank will approve the loan application once all of the relevant procedures have been completed.
8. The student will be requested to sign a contract, and all of the necessary paperwork will be completed.
9. In most cases, the education loan funds are put straight into the institute's account. It may, however, be put in the student's account in some situations.
10. To explain the use of the loan amount, the student must present genuine bills and receipts for any costs incurred during their studies.

Education loan: Eligibility requirements

1. Indian citizen
2. Age: Up to 35 years old for those who are unemployed and up to 45 years old for those who are employed.
3. Evidence of enrollment in the college or university
4. Valid academic transcripts demonstrating a strong academic record (of more than 50 per cent marks)
5. Income or credit history evidence for the guarantor
6. Passport, I-20 form, and visa if studying abroad

Documents required for Education Loan for MBA

1. Loan application in bank's format
2. Proof of admission to the course
3. Passport size photos
4. Address and age proof if you are not an existing bank customer
5. Copies of mark sheets in the qualifying exams
6. Schedule of expenses for the course (course prospectus where the course fee is mentioned)
7. Statement of Bank account for the last six months of borrower/co-borrower
8. Income tax assessment order not more than two years old (student’s or parents’)
9. A brief statement of assets and liabilities of the borrower.

Frequently Asked Questions

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.

1. Repayment Terms: Consider the repayment tenure and moratorium period to fit your financial situation.
2. Loan Amount: Ensure it covers all your expenses (tuition, accommodation, etc.).
3. Processing Fees & Charges: Look for banks with minimal or waived processing fees.
4. Additional Benefits: Consider features like concessions for female students, scholarships, or tax benefits.

Ques. What documents are typically required for an MBA education loan application?
Ans. Here are some important documents

1. Loan application form
2. Proof of admission to your MBA program
3. Academic transcripts
4. Income or credit history documents (yours and co-applicant, if applicable)
5. Passport, visa, and I-20 form (if studying abroad)
6. Bank statements
7. Income tax assessment orders
8. Proof of address and identity

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.