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    • Posted on by Krishna Krishna

    The final admission lists of almost all the top b-schools are out, bringing joy to the ones who have made it and anxiety to those on the waitlists. Everybody — waitlisted or otherwise — must now plan how to finance their management education. They must start by hunting for banks offering the most attractive education […]

    The final admission lists of almost all the top b-schools are out, bringing joy to the ones who have made it and anxiety to those on the waitlists. Everybody — waitlisted or otherwise — must now plan how to finance their management education. They must start by hunting for banks offering the most attractive education loans, calculating the approximate Equated Monthly Installments (EMI) and understanding the technicalities of a typical loan application. To simplify this, PaGaLGuY collected data from prominent banks and based on their existing education loan rack rates, devised a simple loan calculator.

    PaGaLGuY Education Loan EMI Calculator*

    * All calculations based on the brochure rates of banks and are indicative. Actual EMIs will differ based on negotiation, special offers, etc. We do not take the responsibility of you being offered different plans by banks.

    View the ‘PG Top 40’ b-schools

    Education loan terminology

    Loan Amount is the principal amount which you would take from a bank to fund your MBA fees. This amount need not be the entire fees of the course. It can be either a part of the fees (if you are making some lumpsum payment) or the entire amount.

    Interest is the money banks charge in return for letting you use the loan. A percentage of the loan amount, it is compounded on an annual basis.

    Documentation needed to get a loan

    Banks require some essential documents about your admission, identity and history in order to verify your claim and make it easy for the bank to believe you. The documents which are commonly required are:

    • Proof of identity
    • Proof of income (parent or guardian income, or your own income if you have been working)
    • Bank statements where it is shown that this income has been credited for the past 6 months
    • Proof of residence
    • Guarantor form
    • Admission letter from the institute along with the fee schedule and marksheets/passing certificates of SSC, HSC and graduation
    Collateral is the money or assets that have to be pledged as security against your loan. Typically, banks do not require a collateral for loans less than or equal to Rs 4 lakh. Loans in excess of Rs 4 lakhs do require collateral and/or a third-party guarantor. The banks obtains the right to seize the collateral asset in case you fail to pay the loan. Examples of collateral are:

    – Automobiles

    – Real estate

    – Cash accounts

    – Investments

    – Insurance policies

    – Valuables and collectibles

    – Future payments

    Document requirements differ from bank to bank. The list given here is indicative.

    Moratorium period is the period after completion of your degree during which repayment is waived off. It is equivalent to the bank giving you a holiday from paying back your loan until you sort out your employment status after MBA. Moratorium periods range from 6 months (if you get a job immediately after MBA) to an year (in case you dont get a job or you start your own business). Some banks use their discretion to impose simple interest during the moratorium period.

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