Loans upto Rs. 4 Lacs: Around 11.75% p.a.

Loans over Rs. 4 Lacs: Around 12.50% p.a.

What to Consider Before Choosing a Loan?

Loan repayment periods depend on the type of loan and the institution from which it is obtained. For example, the Industrial Development Bank of India holds a two-year moratorium period, with loan repayment due within the following three years; that is, three years post-MBA graduation. The State Bank of India, in contrast, holds a loan repayment period of five to seven years. While many public banks do not charge a penalty fee for repaying the loan early, some private institutions do, so it's important to clarify repayment details before signing off. Also, make sure to evaluate all your choices when it comes to choosing your payment options. For some, monthly payments will be easier to maintain, while for others annual payments are the way to go.

Venkatraman Gopalakrishnan, a current student at Tuck, in the US, has a bit of advice for Indian MBAs requiring loans: "The loan I received was part of the admissions package for international students, and the amount was based on the estimated self-funding ability at the time of admission. It was a relatively straight-forward process that required me to declare my self-funding capacity. The loan approved covered the first year's tuition and living expenses. The second year's loan was arranged by the school, also with minimum paperwork. I would advise that you keep your salary and income tax records handy in case it is required."

Fixed Vs. Variable Rates

Interest rates fluctuate, and whether this will be in your favour cannot be predicted. A wide range of fixed interest rate loans are available and are often a better option for students. Meeting with a financial advisor is a good first step to gaining all the information needed for choosing the right option for you.

Many other factors should be taken into account before applying for a loan to cover your MBA studies. For example, you may be eligible for a scholarship, or be in a position to accept funding from an employer. Do your research and consider combining a few types of funding to maximize your MBA experience.

Concluded.

Source: -
Marie Field
Website: www.topmba.com