Education Loan for IIMs - Eligibility & Interest Rates (2024)

Education Loan for IIMs

IIM is a dream and desired institute for almost every aspirant in India who wants to pursue an MBA. Owing to its placement and package offerings, around 3 lakh qualified candidates take exams every year for its 5,500 seats. 

However, on this route, you must have calculated all the expenses associated with studying at IIM, and you found that an education loan for IIM is the best way to cover them.

Let’s explore the process, benefits,  features of an education loan for IIM and how you can secure one.

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Cost of Studying in IIM 

Before we delve into the education loan process at IIM, let us examine the cost of studying at different IIMs. With ₹27 lakh fees, IIM Calcutta is the costliest IIM in India, whereas IIM Sambalpur is the cheapest IIM in India with ₹13 lakh fees. The costs mentioned below include tuition fees, traveling costs, living expenses, and other related expenses.

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Key Features of Education Loans to IIM Students

The education loans to IIM students have certain exemplary features that you must know:

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Top Schemes for Education Loans in IIMs

To cater to the financial needs of students who get admission in the premier schools, specifically IIMs, banks provide education loans under different loan schemes. Let’s discuss some of the popular schemes curated by various banks under education loans for the IIM students category:

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‍Documents to Apply Education Loan for IIMs

The documentation process is vital to ensure hassle-free application. However, it may also become overwhelming. That’s why we have outlined information about the type of documents required while applying for the education loan in IIMs.

Application form Documents

Two passport-sized photographs are the basic documents required for the application form. Moreover, the application form should be filled out with the right information. 

Applicant and Co-applicant Information

Both the applicant and guarantor should submit their identity proof. The identification proof can be given by submitting either of the following documents:

1. Aadhaar Card
2. PAN Card
3. Driving License
4. Voter ID Card

Apart from identity proof, address proof is also important to submit/upload for the loan application. The address proof can be displayed by submitting/uploading the following documents.

1. Ration card
2. Electricity bill
3. Telephone bill
4. Aadhaar card
5. Bank passbook statement

Co-applicant Documents 

• If the co-applicant is a salaried working professional, they should submit their salary slip or bank statement for the last 6 months.
• If the co-applicant is a businessman, he should submit the last 12 months' business transactions. Additionally, asset and liability statements or balance sheets approved by bank employees should be submitted.  

Academic Document

The student should submit the academic proof. These documents include:

• Proof of admission to the recognized university and a valid degree course 
• Written total course fee with payment deadlines
• Class 10th, 12th, and last pursued degree academic transcripts.

Income Proof Document

If the co-applicant is salaried:

1. Salary slips for the last 3 months
2. ITRs of the last 3 months 
3. Form 16 details of the last 2 years
4. ID card of the co-applicants office

If the co-applicant is self-employed:

• Last 3 years Income Tax Returns
• Balance sheet along with profit and loss (P&L) statements of past 3 years 
• Proof of business address

Other Documents

Some additional documents required for applying for education loans for IIMs are:

1. Proof of statement declaration from the co-borrower with regards to undertaking responsibility for paying extra expenses, which are not covered in the education loan.
2. A joint affidavit from the student and co-applicant to the bank in their prescribed format.
3. Payment receipts from the university
4. Pending loan statement from the past 12 months
5. Student gap certificate to justify your academic gap. The certificate can be made on 100 Rupee stamp paper.

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Is Taking an Education Loan for IIM Worth It? 

Education Loans might seem as liabilities for students prima facie, but they are definitely not. Opting for an education loan to pursue MBA from an IIM is absolutely a worthwhile decision. 

These loans cover tuition fees and other expenses such as travel, accommodation, and miscellaneous expenses. 

Various banks and NBFCs offer education loans for IIMs to students. Every bank or financial institution offers a different interest rate on a student loan for IIM. Nonetheless, you can get an option to take an education loan with a low and attractive interest rate ranging from 8.5% to 10%. You can also get a loan of up to Rs. 30 lakhs, which is adequate for IIMs. The education loan amount is not only based on the college’s tuition fees but also on extra expenses in the course of study. Thus, banks offer extra funds to cover all the living and educational-related expenses.

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How to Apply for  an Education Loan for IIMs at Propelld

Pursuing an MBA from IIM, the top management institute in India, can be both satisfying and lucrative. It offers you access to high-level job prospects and entrepreneurship opportunities. However, the educational expenses can trouble both the students and the family. At Propelld, we are committed to taking those troubles, stress, and struggles out by offering you the following:

• End-to-end Assistance: We will provide you with end-to-end assistance throughout the loan process that will simplify the process for you.
• Designated Financial Officer: A financial officer will help you compare loan interest rates and negotiate the same.
• Income Share Agreement: You don't have to pay anything until you get a job. Also, pay only after you complete your MBA.

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Benefits of Propelld Education Loan

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IIMs in India are renowned for their world-class faculty, academic excellence, and rigorous curriculum. Together, they offer everything a candidate wants to create a lucrative and fulfilling career. An education loan for IIM students offers an easy way to cover all the expenses that occur along the way.

So, get an education loan for IIM with Propelld. Fulfill your dream to study in the premier business school in India. We will give you private education loan options according to your profile and needs. With a 100% online process, you can get it done digitally at home and remove the barrier to financial access with us.

FAQs About Education Loan for IIMs

What are the eligibility criteria to secure an education loan for IIMs?

To become eligible for an education loan for IIMs, the applicant should be a citizen of India and have secured a seat in one of the Indian IIMs. Applicants who are trying to take education loans for IIMs should also meet the minimum income criteria established by the bank or financial authority.

Which is the cheapest IIM in India?

New and baby IIMs like IIM Ranchi, IIM Bodhgaya, and IIM Jammu have comparatively lower fees than old IIMs like IIM Ahmedabad, Bangalore, and Calcutta. Among new IIMs, the cheapest is IIM Sambalpur, with a fee of Rs 13 Lakhs for two 2-year MBA courses.

Are there any tax benefits for an education loan for IIMs?

Yes, there are tax benefits for an education loan in IIMs. Education Loan for IIMs is categorized under Section 80E of the Income Tax Act. Therefore, the loan interest paid for this loan is eligible for a tax deduction.

How interest is calculated on loans for IIM?

The overall interest of a given loan is mostly calculated on the reducing balance method, also with an interest of the remaining amount for the loan till the last payment.