Everything you need to know about applying for a student loan

Are you planning to join a top institute for a Masters in Business Administration? There are many things to consider such as the options and opportunities offered by the institute. But, cost is also a key factor.

A typical two year program at an institute such as IIM Ahmedabad or IIM Bengaluru costs around Rs23 lakh. Add to that travel and other miscellaneous expenses. In some of the newer IIMs and some of the better private schools the fees are lower. But even then it can be around Rs10 lakh to Rs15 lakh. Obviously, few will be able to afford the costs out of pocket. Student loans can help here.

Most banks offer student loans for graduate degrees. Now banks even offer products for specific courses and institutes. For example, the SBI Scholar Loan Scheme of the State Bank of India covers the courses of IIM, IIT, NIT and other similar institutes. IDBI Bank offers exclusive education loan products for courses at leading institutions, with low interest rates, said Sanjay Deshpande, the bank’s executive director. In addition, many students are enrolled under the management quota, resulting in higher expenses; Banks like IDBI Bank also offer exclusive products to these students, Deshpande said.

Interest rates on student loans differ from bank to bank. SBI currently charges from 6.85 percent to 8.15 percent. IDBI Bank charges between 6.75 percent and 8.75 percent. These interest rates are floating (variations depending on the market). A few other public banks charge between 8 and 10 percent. Private bank interest rates start at around 10.5% for secured loans; unsecured loans are expensive and can go up to 16 percent.

For loans up to Rs8 lakh, banks cannot ask for collateral or additional collateral, if there is a co-borrower (a relative, for example). For amounts greater than this, the borrower will need to provide additional tangible collateral, such as property. Loans offered by banks for courses in national institutes can go up to around Rs40 lakh. Typically, there is a moratorium on refunds for the duration of the course and up to one year more. The loan must be repaid in a maximum of 15 years, excluding the moratorium period.

Are there specific criteria for applying for a loan? How important are entrance exam scores and results? “The CAT score is not the criteria for getting a student loan or lower interest,” Deshpande told LA WEEK. “Institutional accreditation, merit-based selection and the level of education undertaken are key criteria. “

Lenders would also examine the consistency of the institute’s performance; The “key parameters” from previous years are analyzed. And they say that’s a key criterion. Some banks may conduct interviews to assess the student’s prospects. Therefore, a strong academic record, high grades, admission to a reputable institution, financial history of the co-borrower or family, and good career prospects are all things that will lead to approval of a loan. , especially if the amount is Rs10 lakh higher than Rs15 lakh. However, this will not have a large impact on the interest rate charged by the bank, as it depends on the prevailing market rates.

Education loans represented 1.3% of total retail loans in terms of portfolio outstanding in March 2021, according to CRIF Highmark. In terms of active loans, student loans accounted for 0.7 percent. In recent years, non-performing assets in education loans have also increased. As of March 31, the NPAs for education loans in India’s banking sector had reached 12.77 percent, Deshpande said. More than 9.5% of education loans from public banks were classified as NPA as of December 31, 2021, according to government data.

A senior official at a public sector bank, who spoke on condition of anonymity, said NPAs had increased especially in the segment below 07.5 lakh, where no collateral was required. “As a rule, when a student has received a loan for a course at a leading institute, such situations do not arise because the student gets good employment opportunities and hence repayment of the loan is also on time, ”he said.

The situation has plunged due to the pandemic, as many people have lost their jobs or have had their wages cut; new graduates could not find jobs. Now, however, as the economic recovery accelerates, the situation should improve. Banks are also starting to broaden their horizons and look to fund other courses that have industry demand.

Loan application checklist

1 Scoring Sheets: Class 10, 12, Graduation Results and Entrance Examination

1 Letter of offer or letter of admission from the establishment

2 Course expenditure schedule

3 Details of scholarships, if applicable

4 Documents relating to the assets-liabilities of the guarantor or co-borrower

5 Bank statements from parents and / or guarantors

6 For employees requesting a loan for higher education: Pay slips and recent computer declarations

7 Details and proof of the security / guarantee offered

Dheeraj sharma

Director, IIM Rohtak

Managers must be decisive. Completely accurate data will never be available. Therefore, the ability to make decisions with the data available, while balancing risk, is what makes a great manager.

Sonal Rungta

Secretary General, Rungta Group of Institutions

A futuristic manager should be an effective change manager, as organizations become more and more versatile. Future managers must have the ability to anticipate challenges in order to help the company maintain its relevance.

Ashok Mittal

Chancellor, Lovely Professional University

The manager must be able to establish mutual trust with the stakeholders for the retention of the workforce, the productivity in the different units and the regular improvement of the results. He or she must also be able to handle pressure effectively.

Mayank Dhaundiyal

Dean, Jindal Global Business School

Rapid and profound changes around the world are changing the nature of work. To have a positive impact, managers must have a solid knowledge of the field and the ability to prioritize tasks; they must be empathetic and effective communicators, and must have the right mindset.

Bidyut Majumder

Managing Director, Business Development, JIS Group

The most important quality a manager should have is knowing how to get better results. They must focus on the strengths of the employees, build a positive work culture and know how to communicate effectively.

Kiran G. Reddy

Founder and Director, AIMS Institutes

Today’s manager needs to have business acumen and be prepared to find opportunities to create competitive advantage while dealing with disruption. Thus, we focus on the pedagogy of learning through experience, simulation and integrated projects in the industry.

Bharat Bhushan Singh

Director, Vishwa Vishwani Institute of Systems and Management

Management is a social process. People have diverse and varied emotional quotients. Therefore, understanding the social and emotional aspects of management is more important than orthodox specialist skills.

Rajeev ranjan

Administrative Director, Chandragupt Institute of Management Patna

A manager is not someone who does things very well. Basically, a manager is one who can “get things done” through the team a little better than what can be done alone.

Vishwa Mohan Bansal

President, NDIM

The manager must show composure and courage to deal with uncertainty and increased expectations every day. They need to learn new skills and emerging technologies, regardless of their age and experience.

Vandana Arora Sethi

Group Director, Lloyd Group of Institutions

Managers are made by ownership to complete the work and delegate it. They must be aware of the whole picture and the timelines, but at the same time, they must be able to ensure productive production.

Shyam AV

Director, Amrita School of Business (Coimbatore)

Managers must be trustworthy. They must be proactive in assessing opportunities. They must have the will and the humility to learn throughout their lives. Thus, in addition to knowledge and skills, a system of values ​​must be transmitted to budding managers.

THE WEEK-Hansa Research Best B-Schools Survey 2021

Research methodology

Collection of perceptual opinions

A primary survey was conducted in August-September 2021, in which 285 academic experts, 470 current students, 320 aspiring students and 40 recruiters from 17 Indian cities named the best secondary schools in the country. The cities selected included all of the country’s major education hubs.

A closed questionnaire was given to all stakeholders, asking them to name and rank the 25 best b schools in India and the best b schools in their areas.

Perceptual score: Calculated on the basis of the number of nominations received and the actual rankings attributed to the b-school in the All India category and in its area, by the different stakeholder segments.

Gathering factual information

A dedicated website was created as an interface and the web link was sent to over 1,400 b-schools, of which 186 responded on time. Four b-schools were rejected because they did not meet the eligibility criteria (institutes either failed three promotions or admitted less than 40 percent of sanctioned admission). Data from the remaining 182 b-schools were used for ranking.

Factual note: The information collected from secondary schools was combined by applying appropriate weights to each parameter, as shown below:

Ranking methodology

The ranking is based on a composite score obtained by combining the high school perceptual score and the factual score.

Some leading b-schools were unable to respond to the survey on time. For them, the composite score was obtained by combining their perceptual score with an appropriate factual score interpolated according to their position in the list of perceptual scores.

Some prominent b-schools, like IIM Calcutta, withdrew from the investigation and did not want their names listed.

Note: Emerging b schools are institutes created in 2011 and thereafter.