Tag Archives: Funding MBA in India

MBA & Loans

Ok… So you think of going for an MBA. Be prepared to deal with loans in your life.

One suggestion that I give to all MBA aspirants is to look out for financing options early on (especially if you are studying out of India). Getting loans from Indian banks is a tough task and you cannot rely on them only. If you are not going to study in USA, the options you have are:

  • Dig up your savings (Savings Acct, PF, PPF, MF, Shares, Forex reserves, Swiss bank account)
  • Start a fund raising campaign (ask you friends, brothers, sisters, in-laws,¬†neighbors¬†who spend so much on their pet or Kardashians)
  • Auction off your stuff (Home, Bike, Car)
  • Ask your parents (en-cash those FDs they have been saving for their retirement)

After summing up the amount gained from above mentioned steps, if there is still a gap in the funds required, knock the doors of St. Peters (Banks). If you are thinking of taking up the loan in access of 4 Lakhs, make sure you have some kind of collateral (oh yes! Its time to mortgage that house which was built with so many dreams and EMI payments). Do remember that it has to be freehold and possessed property. The property should be in your or your guardian’s name only.

In addition, you need to have the following paper work ready:

For Student

  • 2 passport size photos;
  • Identity Proof (Passport, PAN);
  • Residence Proof;
  • Mark Sheets (10th onwards);
  • Admit Letter;
  • Schedule of Expenses;
  • Latest Salary Slips (3 months);
  • Form 16/ITR (last 3 years);
  • Asset & Liability Statement

For Guardian

  • 2 passport size photos;
  • Identity Proof (Passport, PAN);
  • Residence Proof;
  • Proof of Office Address in case of self employed;
  • Latest Salary Slips (3 months);
  • Form 16/ITR (last 3 years);
  • Bank Acct statement (last 6 months);
  • Asset & Liability Statement

Just to be prepared, do self attest all documents and if possible write a brief letter explaining the admission, university, ranking of school, total expenses, amount you will pitch in and required loan amount.

SBI (http://www.statebankofindia.com/) and other public sector banks

SBI provides collateral free loan upto Rs. 4 Lakhs only. In addition to standard documents, SBI also asks for following:

  • Affidavit from Borrower & Guardian
  • Letter from Association of Indian Universities

Credilla (http://www.credila.com/)

Credilla is another source for loans. For top 10 schools, they provide collateral free loans upto 20 lakhs. (HDFC owns 64% in Credilla now)

HDFC Bank (http://www.hdfcbank.com/personal/loans/educational_loan/el_foreign/el_foreign.htm)

HDFC Bank provides Rs. 7.5 Lakhs of collateral free loan and I found this a better bet than SBI.

Other similar options with you are: Canara Bank, Indian Bank, Allahbad Bank, IDBI, PNB.

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Other suggestion that I give to budding MBA is start thinking like one. Ensure that you take loans in the currency of your expenses. If this option is not available, do consider in mind the currency fluctuations can pose a serious risk for your planned resources. Depending on which way the exchange rate is going, try to hedge this risk early on by either buying early or scatter your buy over quarters.

So hopefully this will give you a base on what to expect. If you have not planned for MBA education, start it now!

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