While hard working MBA aspirants are happy to get selected by the top B Schools, they are also getting tense thinking about how to the high fee in the top B Schools. This year, all the top B Schools have hiked their fees. In a country like India, most of the students belong to the middle class; it is a matter of concern for them. In this article of MBAUniverse.com we will tell you how you can keep this stress aside.

“While MBA education is costly, student loans are easily available. It is imperative that you target only the best B-Schools irrespective of the cost of education. Post an MBA from a top B-School, the salary would take care of the loan that you had taken,” says Gejo Sreeninvasan, Principal Consultant, Career Launcher. According to him, you can very well go for an education loan as the placements these B Schools offer can take care of your loan. You should not compromise taking education loan as it provides a high return on investment.

Education loan
The Reserve Bank of India has evolved an educational loan scheme to facilitate financial assistance to students seeking admission to private professional colleges to pursue the full time graduate or post-graduate courses. The scheme got effective from August 1, 1999. All public sector banks have been directed by RBI to provide educational loans to students who fulfill certain eligibility criteria.

You will have to submit a certificate every year from the college authorities regarding fees payable by him. Loan amount will be remitted by the lending bank to the college concerned. Loan granted in each academic year may be treated as a separate loan account for determining rate of interest, security, etc.

The assistance from the bank should be available to the student for the entire duration of the course. The student will not be required to submit a fresh application for loan every year but will only submit to the bank proof of his continuing to fulfill the eligibility criteria.

According to the norms prescribed by various banks, all courses having employment prospects are eligible for an education loan. Graduation courses, post-graduation courses, professional courses, other courses approved by UGC/Government/AICTE are considered for loans. So if the B School you are planning to take admission is one of the top ones you can very well go for education loans.

Banks and their policies:

ALLAHABAD BANK

Need based finance subject to repaying capacity of the parents / students with following ceilings:
Studies in India: Maximum Rs 10.00 lakhs
Studies abroad: Maximum Rs. 20.00 lakhs.

Rate of Interest
For IIT/ IIM/ ISB (loan up to 10.00 Lakhs): PLR-1.75 per cent
For Other: Loan up to 4.00 Lakhs: PLR-0.75 per cent; for loan above Rs.4.00 Lac: PLR-1.00 per cent

BANK OF INDIA

Need based finance subject to repaying capacity of the parents/students with margin and the following ceilings:
Studies in India - Maximum Rs.10.00 lakh.
Studies abroad - Maximum Rs.20.00 lakh.

Rate of interest
-- Up to Rs.4.00 lakhs – 2.50 per cent below BPLR. Minimum 9.50 per cent p.a.
-- Above Rs.4.00 lakhs up to Rs.7.50 lakhs – 2.00 per cent below BPLR, Min. 10.00 per cent p.a.
-- Above Rs.7.50 lakhs - 1.25 per cent below BPLR, Min. 10.75 per cent p.a.

CORPORATION BANK

Need based finance subject to repaying capacity of the parents/students with margin and the following ceilings:
Studies in India - Maximum up to Rs.10 lakhs
Studies in Abroad - Maximum up to Rs.20 lakhs

Rate of interest
Upton Rs.4.00 Lakh
Applicable or fresh loans sanctioned/initially disbursed on or after 14.08.2009 1.00 per cent
Above Rs. 4 Lakh and Upton Rs.7.50 Lakh
Applicable for fresh loans sanctioned/initially disbursed on or after 14.08.2009 12.00 per cent
Above Rs.7.50 Lakh
New Loans disbursed on or after 14.08.2009 11.50 per cent

HDFC BANK LIMITED

-- Student Loans Upton Rs. 15 Lakhs for education In India
-- Unsecured Lending Upton INR 7.5 Lakhs
-- Loan available up to tenure of 7 years including moratorium period
-- Repayment to start 1 year after course completion / 6 months after obtaining employment (whichever is earlier)

UNION BANK OF INDIA

Special Education Loan Scheme
The following institutes are covered under the ‘Special Education Loan Scheme’:
IIM Ahmedabad, Bangalore, Calcutta, Indore, Kozhikode, Lucknow, MDI Gurgaon, SPJIMR Mumbai, XLRI Jamshedpur
Highlights
-- Interest rate of 10.50 per cent fixed; 0.50 per cent concession for women
-- Loan amount up to Rs. 15 Lakhs
-- Expenses considered for loan: Tuition fees and cost of books, Hostel and mess charges, Laptop, Living expenses, Student exchange program

VIJAYA BANK

Schemes of loans
Studies in India … Rs. 10.00 lakh
Studies abroad … Rs. 20.00 lakh

Rate of interest
BPLR-1.25 = 11.00 per cent
BPLR-1.75 +10.50 per cent