Education loans for budding managers

If you are one of those professionals waiting to save enough before you take up that course which will give an edge to your career, then don't wait any more. There are many banks -- though mainly public sector banks -- now offering educational loans to students so that they can pursue mid-career education in India and abroad.   

Many leading Indian educational institutions have tie-ups with banks for educational loans to pursue mid-career courses, making the loan process smoother and quicker.

State Bank of India (SBI) has tie-ups with all the Indian Institutes of Management (IIMs), Indian Institute of Technology (IITs) and Indian School of Business, Hyderabad.

Bank of India (BOI) has tie-ups with institutions like IIMs and computer training institutes like NIIT. Bank of Baroda has a special scheme for funding executive education called 'Baroda Loan for Executive Development'.

SBI also gives loans to mid-career courses in other educational institutions, both in India and abroad.  "Expanding Indian businesses have increased the demand for new skills and qualified professionals, resulting in demand for educational loans," said an SBI official who did not want to be identified.

• Going for an education loan? Read this 

He also said that around 80 per cent of SBI's educational loans are for domestic courses. What's more, SBI registered 30 per cent growth in its education loan portfolio to Rs 3,220 crore in 2006-07.

According to a BoI official, almost 70 per cent of education loans were taken for domestic courses -- mainly for doing MBA, MBBS, computer engineering, hospitality and other post graduate degrees. BoI recorded 20 per cent growth in its educational loan portfolio in 2006-07 to Rs 700 crore.

SBI offers education loans of size ranging from Rs 20, 000 to Rs 15 lakh. The average ticket size of a domestic education loan is Rs 2 lakhs to Rs 3 lakhs, while that of an overseas one is Rs 10 lakhs.

While the tenor ranges from five to ten years, repayment usually starts from one year after completing the course or six months after securing a job, whichever is earlier.

Mid-career management programmes (up to 1 year) offered by leading Indian business schools cost between Rs 40,000 and Rs 2 lakhs. Shorter duration courses cost less.

• Education loans: Do you need a guarantor? 

However, short-duration courses conducted by premier institutes may set you back by more than Rs 1 lakh. For instance, the six-month programme conducted by IIM-A costs Rs 1.8 lakhs. Banks usually finance these courses through loans.

Below is a list of some commonly sought mid-career programs along with the institutes that offer them.

Apnaloan.com is a guide to education loans in India. Apnaloan also enables consumers get best education loan rates by making banks compete for their loan.