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How to Finance Your MBA – Especially When You Don’t Have Any
Money

Okay, so you are planning to do an MBA from a top business school such as Harvard in
the US, INSEAD in Europe, or ISB in India.

You are fairly confident of cracking the GMAT, and you feel that your profile is good
enough to get a foot in the door for the interview.

However, you are still worried about the ROI of an MBA!

You have read that a two-year MBA can cost upwards of a crore!

That is 10000000!

Heck! you can’t even count the zeros without putting your finger below the text.

If you are wondering how to fund your MBA abroad when you don’t have that much
money in the bank (of course you don’t), you have come to the right place.

In this blog, we are going to cover a LOT of ways in which you can get loans and
scholarships to fund your MBA. By the end of this blog you will know exactly what to
do. It might make sense for you to even bookmark this blog right away!
1. Non-cosigner Loans Given by the MBA Program

There are a good number of US B-schools offering student loans without a U.S. co-
signer. This means that the B-school itself will stand as your guarantor.

Here is a list of a few US colleges which provide a non-cosigner loan to international

students:

Harvard, Stanford, Wharton, Chicago Booth, Kellogg, MIT Sloan, Yale, Berkeley Haas,
Tuck, NYU Stern, Duke Fuqua, Cornell Johnson.
If you want to learn more about non-cosigner loans, see our detailed blog on
Non-cosigner Student loans given by Top MBA Colleges for International students

2. Non-collateral Education Loans by Indian Banks

Almost all Indian banks work with the following rules:

• In India, you can easily get a non-collateral loan up to INR four lakhs.

• For amounts up to INR 7.5 lakhs, the bank will assess the risk involved, before
making the decision to grant the loan.

• For any sum above INR 7.5 lakhs, you need to show collateral to the bank.a

The loans from India are either collateral, or non-collateral.

Non-collateral loans may be offered against your admission to a top B-school, but
typically, the maximum offered is somewhere near INR 10 Lakhs, while the norm is
closer to INR 5 to 6 lakhs.

If you look at collateral loans, they are granted against property that you mortgage.
However, the upper limit could be very high, depending on what you have
mortgaged.
Following are some of the top banks which offer study loans by exceeding the limit of
the loan without issues of collateral security:

Source: https://www.bankbazaar.com/education-loans-without-collateral.html
Here is the list of banks in India where you would get a non-collateral loan if you make
it to ISB:

For more information, see http://www.isb.edu/pgp/fees-financing/loans

3. Non-collateral Education Loans by Non-Banks/Specialized Institutes

Nowadays, many non-banking institutions provide unsecured loans, i.e., loans

without pledging collateral, as typically, banks do not extend loans beyond 7.5 lakhs
without collateral.

The amount that a student can borrow varies, depending on the B-School and the
cost of tuition for the program. In most cases, the student can borrow up to the full
cost of tuition. However, this also varies, depending on the profile of the individual
applicant.

Though non-banking institutions such as Avanse, Prodigy Finance, Stilt & Credila
provide higher value loans without collateral, they also charge a higher rate of
interest when compared to banks.

See the list of various Non Banking Institutes that offer Non-Collateral education
Loans to Indian students.

4. Self-finance

This is something that a lot of people ignore. But when you look at self finance, you’re
going to look at every little thing.

You don’t look at just the bank account but also look at mutual funds, provident
funds, and maybe gratuity.

You’re looking at all the money you have invested in other places, such as bonds or
fixed deposits. If you have a bike or a car you can sell, you can get some money.

If you are living in a rented house, you probably have a deposit; you can get the
deposit back.

Even something as simple as liquidating an asset on OLX could better your financial
situation.

It sounds stupid but people really sell electronic items they have, and may not use.
You could possibly look at getting money that way.
5. Soft Loans

Something that a lot of people do not consider. Typically, you get a soft loan from
friends, family and what is known as “fools”. You want to get a loan from someone
who can lend you about INR 5 to 10 lakhs for a couple of years, and you give your
word of honour. It’s maybe an uncle in London who can give you INR 10 lakhs, and you
can pay him after you start working.

6. Scholarships

An MBA scholarship can ease your financial burden to a large extent but to get a good
scholarship, you often need a very high GMAT score, and an excellent profile.

Many top MBA colleges offer various scholarships, and there is a general perception
that these scholarships are difficult to get considering the number of students
applying for them. It might be difficult but surely not an impossible task.

The scholarships are generally classified into merit-based and need-based.

Need-based scholarships are given after considering your financial background,

including various assets and liabilities, while the merit based scholarships are offered
based on your GMAT score and profile.

If you are looking at scholarship as an option, do check our blog on the various
scholarships offered by Top B-schools.

7. Collateral Loans in India

If you look at collateral loans, you pretty much know the interest rates that typically
work, and you get the loan against property that you mortgage.

You can get up to 85% of the expense as a loan if you have sufficient assets to show.

The upper limit however, could be very high, depending on what you have mortgaged.
8. Co-signer Loans in the US

While applying for an education loan, international students have two options: the no
co-signer option, and the co-signer option.

We have already covered the no co-signer option at the beginning of this blog. We will
now talk about the second alternative, the co-signer loan option.

Co-signing mainly involves getting someone who’s been in the U.S. for a while to sign
the loan contract with you.

Yes! You are still liable to pay the debt after you graduate but if you fail to pay off the
debt after you graduate, your co-signer comes into the picture.

With the co-signer option, the bank reduces their risk by having an opportunity to
recover their money from the co-signer.

Being a co-signer comes with some risk, and that’s the reason co-signers are often
skeptical about it as their credit ranking and history would be in jeopardy.

Some of the institutions that provide loans to international students with a US co-
signer are Wells Fargo, Citizens Bank, Sallie Mae, Union Federal, and Discover.

In a nutshell, there are five important ways to fund your MBA at a top B-School. You
could get a no co-signer loan from a bank that the college is tied up with. You could
get an Indian loan against collateral, or no collateral. Third, look at self finance.
Fourth, look at soft-loans from friends and family, and fifth, look at scholarships.

If you found our article useful, do share it with your friends who are looking to pursue
their MBA abroad, or at ISB, India.

Thank you, and if you have any questions, feel free to comment; we’ll be glad to help
you. Thank You!

Wondering which top B-School you can get into this year? Let us help you!