Loans For MBA Students

The majority of undergraduate and graduate students need loans to finance their education. However, it is essential to remember that the eligibility criteria are different. Most private and federal loans use the following criteria when offering loans:

Credit score:

Loans for graduate programs, including MBA, are not need-based; they focus mainly on your credit score. Lenders want to know that you are a creditworthy borrower with a history of paying back loans on time. If your credit history is not strong enough to get approval, you can add a cosigner with good credit. It could be your parents or spouse.

Work history:

Having a job and savings as you join an MBA program will increase your chances of getting your loan approved. One of the things that banks take into consideration when setting interest rates is creditworthiness like we mentioned previously this includes your income and savings. A high income and savings may lower the interest on your loan and allow you to repay it faster.

Debt-to-income ratio:

Debt-to-income ratio is the percentage of your monthly gross income that goes toward paying your debts. You can calculate it by dividing your monthly debt payments by your gross income. Lenders prefer borrowers who don’t have a lot of debts to pay at the end of the month, including your cosigner.

Citizenship:

Most lenders primarily borrow to U.S. citizens or permanent residents, which is why you need a Social Security Number to apply. Lenders also require the same of your cosigner. For this reason, it is more complicated for international students to get approved for student loans, especially if they don’t have a U.S. citizen or permanent resident cosigner. But, few private lenders, such as MPOWER Financing, have options for you if you are an international student.

Degree program:

Lenders require borrowers to pursue a degree program at an eligible program. You must also be at least a half-time student to be eligible. Half-time graduate or professional students are required to complete, on average, four point five credit hours per semester but check in with your school to be sure.

When choosing an MBA loan, take into consideration the factors below:

How much can you borrow:

Your MBA loan limit depends on your lender. For federal loans, you are allowed to borrow up to $20,500. Some private lenders also have a set limit, while others give students the option of borrowing the annual cost of attendance.

Living expenses: 

Students can pay their living expenses, such as housing, groceries, transport, and health insurance, with student loans. Although you don’t directly receive the loan funds after your tuition and fees are covered, your school will send you the leftover funds, and with this, you will be able to survive. 

What are the repayment terms?

Most lenders, federal and private, require you to start repaying your loan as soon as your grace period ends. The grace period depends on the lender; the grace period for private loans varies between six to nine months, while federal student loans are strictly six months. Federal loans give you ten years to fully repay your debt, while private loans give up to fifteen years.

What are the deferment policies?

You can defer payment on all federal student loans as long as you are at least a half-time student. Many private lenders also allow you to defer payments with a similar condition, but some, such as Sofi and Mpower Financing, require you to start repaying the loan or interest while you are in school. Unlike undergraduate student loans, all graduate student loans accrue interest regardless of the lender. 

Federal and private student loans are both excellent options for funding your MBA. However, selecting the best option for you can be tricky because one wrong move can leave you with overwhelming debt. Pay special attention to the available options to pick a loan that fits your financial capabilities.  

The U.S. government offers you federal student loans; the only way to access them is by completing a Free Application for Federal Student Aid (FAFSA). MBA students can apply for two federal loans, Unsubsidized Direct Loans and Direct PLUS loans, at a fixed interest rate but with origination fees. Subsidized student loans are not available to graduate students. Private student loans are offered to you by financial institutions such as banks, state agencies, credit unions, or universities. Private lenders allow you to choose between fixed and variable interest rates and have fewer fees. 

We have reviewed the best loans for MBA students, so you don’t have to!

Discover is a U.S. based digital bank and payment service organization focusing on helping people manage their money and debt more effectively and build a brighter future. The organization offers a wide range of student loans, including MBA, law school, residency, and undergraduate. Discover also allows graduates to refinance their existing loans.

Pros of Discover:

• No late payment fees
• Hardship repayment options
• Offers repayment discounts

Cons of Discover:

• No cosigner release program

Eligibility requirements:

• Must be a U.S. citizen or permanent resident
• Must be pursuing a degree program
• Must be at least a half-time student

Repayment details:

• The loan has a nine-month grace period
• 20 years loan term
• 10 to 20 years term for refinance loans

Earnest is an online finance company that creates affordable loan solutions for students. The company allows students to control their financial future by offering and refinancing loans with low rates and scholarships.

Pros of Earnest:

• You can skip one payment per year
• No late payment fees
• Multiple repayment options

Cons of Earnest:

• Loans are not offered in Nevada

Eligibility requirements:

• Must have three years of work history
• Must have a minimum income of $35,000 per year.
• International students are eligible with a U.S. citizen cosigner

Repayment details:

• 15 years loan term
• The loan has a nine-month grace period
• Allows military and academic deferment

Common Bond creates lending solutions for graduate and undergraduate students. The organization offers students simple loan options with low-interest rates to enable them to save money and drive sustainability.

Pros of Common Bond:

• No origination fee
• No prepayment penalty
• Low APR

Cons of Common Bond:

• Late payment penalty

Eligibility requirements:

• Must be a U.S. citizen or permanent resident
• Must be at least a half-time student
• Must have a credit-worthy cosigner

Repayment details:

• Unpaid interest accrues
• The loan has a six-month grace period
• Required to pay $25 monthly while in school and during the grace period

Stanford business school students created Sofi to help fellow students reach financial independence and achieve their dreams. The company’s goal is to help young people get their money right and control their finances.

Pros of SoFi:

• No late payment fees
• Offer career planning serves
• Does not require hard credit checks to find out loan eligibility

Cons of SoFi:

• High APR

Eligibility requirements:

• Must have a bachelor’s degree
• Must be pursuing a degree program
• Must be at least a half-time student

Repayment details:

• Five to fifteen years loan term
• The loan has a six-month grace period
• The lender can change interest rates without notice at any time and notice.

Citizens Bank offers students tailored advice and loan solutions that will help them reach their potential today and in the future. The company provides funding to students to ease the financial burden of getting a higher education and help them reach their potential.

Pros of Citizens Bank:

• Students can use one application every school year
• Offers up to 0.5% interest rate discounts
• International students are eligible with a U.S. citizen cosigner

Cons of Citizens Bank:

• Require hard credit checks to find out loan eligibility

Eligibility requirements:

• Must be a U.S. citizen or permanent resident
• Must be at least a half-time student
• Good credit or a credit-worthy cosigner is required

Repayment details:

• Multiple forbearance options
• Five to fifteen years loan term
• The loan has a six-month grace period

Which lending institution provides the best loans for MBA students? 

SoFi and Common Bond offer the best loans for MBA students. Students with excellent credit scores will get the best offers with Sofi, and Common Bond has the best deals for those focussing on the Annual Percentage Rate (APR). 

Does a credit score impact loans for MBA? 

Credit scores can impact your loan approvals, however some lenders do not require a high credit score or can allow you to get a co-signer to apply with you. 

How do I get the best loan for an MBA?

You improve your loan approval rate by ensuring you meet eligibility requirements, including credit score, work history, and Debt-to-income ratio.