Education Loan for MBA in USA for Indian Students

During the 2021/22 academic year, an impressive number of approximately 199,100 Indian students ventured to the United States for higher education. Notably, around 26,000 of them opted for business and management programs, accounting for 13.3% of the total. The QS Global MBA Rankings 2023 further revealed that the list features over 100 universities/colleges from the USA, with an impressive 39 institutions securing positions within the top 100. Pursuing an MBA in the USA carries the advantage of global recognition; however, it is essential to consider the substantial costs involved. To meet their financial needs, many international students turn to abroad education loans. Exploring the available loan options becomes crucial in making an informed decision about embarking on an MBA journey in the USA.

 

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Cost to study MBA in USA

MBA programs in the USA can come at a significant cost but being globally recognized can provide good returns with career opportunities in the future. International students can expect to pay tuition fees ranging from approximately USD 60,000 to USD 80,000. The living expenses to study MBA in the USA account for USD 8,000 to USD 10,000 per month.

A general bifurcation for the same has been shown below: 

The average tuition fees for the top 5 MBA universities in the USA have been shown in the table below:

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Types of education loans for MBA in USA

When it comes to Indian students studying MBA in the USA, education loan options can be broadly categorized into two types. The first category is secured education loan, which necessitates the applicant to provide collateral as security during the loan application process. Collateral can include assets like Fixed Deposits, LIC Insurance, non-agricultural land, residential property, or commercial property. It's worth noting that most public banks in India require collateral for education loans for studying abroad.

The second category is unsecured education loans, which does not require collateral as security. Unsecured education loans come with higher interest rates compared to secured loans due to the increased risk for the lender. These loans often require a co-applicant or co-signer, and the loan amount is determined based on the co-applicant's income and CIBIL score.

MBA in USA secured education loan

As mentioned earlier, secured loans require collateral, enabling higher loan amounts compared to unsecured loans.

Additionally, secured loans may not require a co-applicant. When considering education loan options for studying an MBA in the USA, two recommended public sector banks are-

1. State Bank of India (SBI)
2. Union Bank of India (UBI)

Here is a comparative analysis of these banks' education loan offerings for studying in the USA.

MBA in USA unsecured education loan

If you don't have collateral for an education loan to study MBA in the USA, there are alternative options available through Private banks, NBFCs (Non-Banking Financial Companies), and international lenders. Private banks and NBFCs may require a co-applicant with a minimum financial income and no liabilities, while international lenders offer loans without a co-applicant. Opting for international lenders can be advantageous as they provide loans in USD, potentially saving on foreign exchange charges and other costs. However, it's important to note that international lenders typically have higher interest rates. Each lender offering unsecured education loans for MBA in the USA has its own pros and cons. To assist in your decision-making process, we have prepared comparative data of these lenders.

Education loan for experienced professionals - ICICI Bank offers a loan option for applicants with a minimum of 3 years of experience, eliminating the need for a co-applicant. The loan amount and other variables remain unchanged as shown in the table above. Two additional requirements include a minimum monthly income of INR 35,000 (which may increase for higher loan amounts) and the necessity to create a Fixed Deposit (FD) to cover the total Simple Interest payable during the moratorium period, ensuring a free moratorium.

How to choose the best lender for MBA in USA student loans?

When evaluating education loan options for an MBA in the USA, GyanDhan offers helpful advice to select the most suitable loan and minimize future financial burdens. To make an informed decision, it's crucial to compare the following aspects across lenders and loan schemes:

• Interest Rate
• Processing fee and time
• Margin Money
• Moratorium Period
• Tax Benefit
• Loan Duration
• Covered Expenses
• Prepayment terms and conditions

Expenses covered by education loan for MBA in USA

The expenses which may be covered under loan as per the lender will include - 

Cost to study

• Tuition fee
• Admission fee
• Examination fee
• Expenses for books, or laptop
• Expenses for study tours

Living expenses

• Accommodation or hostel cost
• Food costs
• Caution fee

Other costs 

• Expenses for travel
• Health insurance expenses
• Miscellaneous expenses

Required documents for MBA loans for USA

It is essential for students to collect all the required documents for applying for an education loan to study MBA in the USA. While the document checklist can be extensive, GyanDhan offers a personalized document checklist to streamline the submission process for you.

Education loan eligibility for MBA in USA

International students seeking an education loan in the USA must meet certain eligibility criteria. These include:

• Obtaining confirmation of acceptance from a recognized American institution for a full-time master’s program.
• Being at least 18 years old.
• Demonstrating a strong academic track record.
• Choosing a course of study with promising career prospects.
• Providing collateral, if applying for a secured loan.
   

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How to get education loan to study MBA in USA?

Securing an education loan for pursuing an MBA in the USA is typically a straightforward process. However, managing multiple lenders individually can be overwhelming. To simplify this procedure, GyanDhan offers streamlined assistance in obtaining an education loan for an MBA in the USA. They guide you through the following steps:

1. Check your eligibility for an education loan for an MBA in the USA on GyanDhan's platform.
2. Connect with a dedicated loan expert who will assist you throughout the application process and suggest suitable lenders.
3. Receive a personalized document checklist to simplify the organization of required documents.
4. Submit the necessary documents either in hard copy or soft copy, following the lender's guidelines.
5. Await verification, which typically takes 7 to 15 days. Once approved, sign the agreement letter and monitor progress through GyanDhan's user dashboard.
6. Initiate the loan disbursement according to the lender's procedures, with funds being directly deposited into your account or disbursed to the university by international lenders.

How to repay MBA in USA education loan?

When obtaining an education loan for pursuing an MBA in the USA, it is crucial to consider the repayment terms. The repayment tenure and moratorium options are essential factors when selecting a lender. 

There are various repayment options available, including

• Partial Simple Interest (PSI)
• Simple Interest (SI)
• Equated Monthly Installments (EMI)

To help you make an informed decision, we have created a comparative guide that focuses on repayment as a key aspect of obtaining a loan for studying MBA in the USA.