How to get Education Loan for MBA Studies

Going to business school to get your MBA isn’t a walk in the park. It takes money, time, dedication, and a lot of effort. Beyond just studying, you’ll need to come up with the funds to pay for college. Like any other type of graduate program, you can obtain grants or scholarships, but most students end up taking out some type of loan to fund at least part of their education. Here’s how to get the ball rolling.

Determine Eligibility

Figure out what you’re eligible for before becoming too attached to a school or loan program. Often, this can be done by ordering your credit report from a credit bureau. As a consumer, you get free access to your credit report once a year and can check out any negative marks before applying for a loan. If there is any suspicious reporting on your credit report, contact the credit bureaus and clean up the mess.

Once that’s done, determine what you might be eligible for by looking around for the most common loan programs. The Federal Direct, and Direct Grad plus loans, for example, require that you be a U.S. citizen, national, or a student in the U.S. that is here for some reason that is not a temporary purpose. You must also be enrolled or accepted for enrollment as at least a part-time student. You must also undergo a needs analysis to determine what you need for schooling. Every federal loan program will have slightly differing qualifications and private loans may have their own stipulations you must meet before applying. Don’t waste your time if you know up front that you won’t qualify.

Determine The Type of Loan You Want

Once you’ve figured out what you might be eligible for, it’s time to figure out what type of loan you want. Some federal loans offer a fixed interest rate and generous repayment options as well as payment deferrals. Other loans may be strict on repayment requirements. Your individual circumstances will drive what loan type is best for you. In general, seek out a loan that is as flexible as you need it to be. Also, don’t be afraid of variable rate loans in a low interest rate environment. if the loan amount is small, and you think you can repay it before interest rates rise, you might save yourself thousands of dollars in interest when compared to a fixed rate loan.

Calculate Application Fees

Check the loan fees before you commit to anything. Some student loans carry substantial fees. For example, Stafford loans carry a loan fee of 4 percent that is deducted from the loan distribution. This amount is effectively added to the loan and interest accumulates on the fee. As you might guess, fees make your loan more expensive.

On the other hand, the Perkins loan has no origination o default fee and the interest rate is substantially lower than the Stafford loan. it’s also harder to qualify for, since it relies entirely on financial need. The government also subsidizes the loan by paying the interest on it while you’re in school and during a 9-month repayment grace period.

Apply for the Loan

Applying for an MBA loan is pretty straightforward. Obtain the loan application, fill everything out, and submit it, along with any fees required (if they are not deducted from the loan proceeds) and turn everything in to the lender or issuing institution. Since processing times vary, it’s impossible to say when any given loan will be approved. However, you should follow up with the lending institution after a week to confirm that your loan application has been processed.

Consideration

Before applying for any loans, make sure you’ve applied for all of the scholarships and grants you’re eligible for. Many students mistakenly believe that an MBA will need to be paid for “out of pocket” or with a student loan. That’s not always the case, however. Once you’ve exhausted every possible source for “free money,” that’s the time to dig into the loan process. As much as you might not want to, paying interest might be the only way to advance your career.

Author Bio: Guest post contributed by Justin Epley. Justin is a freelance writer and is currently studying an online MBA in Finance. His articles appear on various higher education blogs.