In the last few months, aspirants have repeatedly asked me various questions on Quora about the education loan for IIM, what is the procedure to avail the loan, what are the documents required, and many other related queries. So, in this article, I am going to answer all these common queries. Read on to get answers to all your loan-related queries. If any query remains unanswered, post it in the comment below. I will try to answer that, as well.
Who can get the education loan for IIM?
Anyone who has the admit card of an IIM can get the loan.
Does family income matter in availing of the loan?
No, family income does not matter. The poorest of the poor can also avail of the loan if he/she has got admission to the IIM.
Is collateral required to avail of the loan?
No, collateral is not required to avail for the IIM students.
Can we get a loan for personal expenses, accommodation, and the student exchange program also?
Yes. The MBA program of IIMs is a residential program in which they provide you accommodation. So, accommodation charges are already included in your fees. Coming to personal expenses, all the banks offer you a sufficient amount for personal expenses as well. They also provide you with the loan for the student exchange program, if required.
What is the maximum amount that one can avail of as the loan?
In tier-1 colleges like IIM A, B, C, loan up to 40 lacs can be availed (Fee is around 25 lacs). In second-gen IIMs, loan up to 20 lacs can be availed (Fee is around 18 lacs).
What is the process to avail the loan at IIMs?
It is easy and hassle-free. During the admission time, the bank representatives of various banks invite you to take the loan from their banks by sharing details about them on PagalGuy. Alternatively, you can search for the IIM branch on Google and get the contact number. All you need to do is connect with the bank personnel. They will let you know everything.
What are the documents required to avail of the loan?
In the following screenshot, I am sharing a list of documents that are usually required. You just need to scan your documents and mail them to the bank manager.
How long does it take to get the loan sanctioned?
It can be done in as early as a day. To be on the safer side, you may consider three working days to get the loan sanctioned.
Can we pay the first term fee also through the loan?
Yes, you can, but for the first time, your physical presence may be required in the bank. So, it is better if you arrange your first term fee on your own. It can be reimbursed by the bank if you want to take a loan for that also. But initially, it is safe to pay the fee of term-1 on your own.
Can we take the loan only for a few terms instead of taking it for all the terms?
Yes, you can.
How is interest charged for the loan?
The bank charges simple interest until you complete your MBA. After completing the MBA, the bank gives you a moratorium period of 6 months or a year during which also, only the simple interest is levied. After the moratorium period, the interest gets compounded.
How long does it take to repay the loan?
Note: This answer is based on my experience from interaction with some of the IIM students, and all the figures are just an assumption.
It varies from person to person. On average, the students repay the loan in 3 to 5 years. The monthly instalment may vary from 20k to 50k depending on your salary, which will be generally 70k+ in-hand. Sometimes students also pay lump sum amounts (for example, two lacs in one instalment) to reduce the duration of their loan repayment. You can change your monthly instalment at any point in time.
My final words:
Do not worry about the education loan for IIM. Once you have the admit card of an IIM, banks will run after you to offer you the loan. So, focus on getting a scintillating CAT score and making it to an IIM. I have never seen anyone letting go of their IIM dream just because of the expenses.
All the best!