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Education Loan
MBA dreams on limited pay? Here’s how to secure an Education Loan
Wondering if 6 LPA qualifies you for an Educational Loan? Know what your odds are. See how banks will evaluate your case and how you can improve your chances.
Key takeaways
- Your 6 LPA salary is not a deal breaker to get an Educational Loan
- Smart preparation boosts your chances of getting approved
- Use a Loan Calculator to get a clear idea on the EMIs
You have cracked the CAT/GMAT, survived the GD-PI circus, and finally have that MBA admit card in hand. Well done! But now is the time to calculate the overall expenses for the course. There are several costs to consider such as tuition fees, hostel costs, study material and everything you need for your course.
If you’re earning around 6 LPA in your current job, you might be wondering: “Will any bank give me an Education Loan for my MBA?”
This may seem like a daunting task, considering your loan eligibility may be low taking in account your annual salary of ₹6 LPA. But getting an educational loan is not difficult, because the degree opens up a lot of prospects for your career. Here is everything you need to know before you take the plunge.
Is 6 LPA enough to overcome the salary barrier?
Banks don’t just look at your current CTC of ₹6 LPA before approving your loan. They also look at other pertinent factors, such as:
- Your future prospect: An MBA is associated with a higher earning potential. So, they are likely to bet on the ‘future professional’ version of you.
- Presence of a co-borrower: In case the salary component alone feels shaky, they may prefer a parent co-signing or having a property put up as collateral.
- B-school credibility: Top-tier colleges like IIMs virtually guarantee your employability when you graduate from these institutions.
Full-time MBAs can cost anywhere from ₹10-30 lakhs (depending on the institution’s type and program chosen). Also, the two-years gap for a full time MBA can result in lost earnings while you are enrolled in the program. Think about these costs when running numbers on a Loan Calculator to determine your EMIs.
It is not only salary that banks take into account for the Educational Loan
Your 6 LPA is just an amount you earn from your “current job”, but you are bound to earn much higher post-MBA. This is an appealing proposition, making it easier to qualify for an Educational Loan. Here is what banks look at:
- College and Course ROI – Is your MBA from a recognised institute? Does it have good placement stats?
- Financial backup – Do you have any savings to fall back on? Is there any financial support from your family? These small things go a long way in making your loan application look better.
- Loan amount vs. Future earnings – A ₹20 lakhs loan might sound huge, but if you are eyeing a ₹15-20 LPA job post-MBA, banks might agree.
Smart tips to improve your chances of getting an Educational Loan with 6 LPA income
- Your admission is genuine,
- Fees are as claimed,
- Co-borrower’s financial health.
| Move | Why It Helps | How to Do It Right |
|---|---|---|
| Apply Early | Banks prioritise applicants who plan ahead. Early applications signal financial discipline and reduce processing bottlenecks (peak season = delays). | Submit applications 3–4 months before course commencement. Use this time to correct errors or switch lenders if rejected. |
| Pick the Right Lender | Public sector banks offer lower interest rates but have limited chances due to stricter eligibility. Private banks approve loans faster and fund tier-2 colleges. | Research lenders’ MBA college preferences (check their website or talk to loan officers). Shortlist 2–3 options. |
| Show Strong Collateral/Co-borrower | A co-borrower (parent/guardian) with stable income (e.g., 10+ LPA) or collateral (property/FDs) reduces the bank’s risk. | Submit co-borrower’s 3-year ITR + 6 months’ bank statements. For collateral, provide property papers + valuation reports. |
| Perfect Your Documents | Incomplete documents trigger instant rejection. Banks use paperwork to verify: | Use a document checklist from the bank’s website. Double-check that the fee structure matches the admit letter. |
| Highlight Future Earnings | Banks assess loan viability based on your likely first salary post-MBA. Example: An IIM graduate with ₹25L average placements = low risk. | Attach your college’s placement report or offer letters (if already received). Calculate debt-to-income ratio (use a Loan Calculator) to prove the ability to repay loan. |
| Improve Credit Score | A score >750 (for you/co-borrower) signals reliability. Banks fear defaulters—late payments or high credit utilisation (>30%) hurt approval chances. | Clear outstanding debts and avoid new credit cards/loans 6 months before applying. |
Final checklist before you hit ‘Apply’
- Run the numbers on a Loan Calculator: This will help you understand how much you need to repay (and for how long) on the loan.
- Choose the right lender: You can pick from public banks (stricter eligibility), private banks (faster processing), and NBFCs. Compare interest rates and processing fees to choose better.
- Backup plan: Have a backup plan in case placements get delayed. See if you have savings to cover 3–6 months of EMI. Also, check if you can do side hustles like freelancing to help with the repayments during the course.
Conclusion
Even if you have a 6 LPA salary, you have a good chance of getting the financial aid to get into a prestigious MBA institution. You need to play it smart, crunch the numbers on a Loan Calculator, and choose the ideal lender for your specific Educational Loan requirement.
Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.
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