Company Name
|
Estimated APR
|
Minimum credit score
|
Loan Amounts
|
Loan Terms
|
College Ave Student Loans
|
Variable APR of 1.99% to 10.97%
Fixed APR of 3.99% to 11.99%
|
mid-700's
|
Up to 100% of the cost of attendance
|
5, 8, 10, or 15 years
|
SoFi
|
Variable APR of 2.64% to 11.98%
Fixed APR of 4.75% to 12.65%
|
Not disclosed
|
Up to 100% of the cost of attendance
|
5, 7, 10, or 15 years
|
Sallie Mae
|
Variable APR of 2.50% to 12.22%
Fixed APR of 4.25% to 12.92%
|
Not disclosed
|
Up to 100% of the cost of attendance
|
5 to 20 years
|
Earnest
|
Variable APRs starting at .94%
Fixed APR of 3.24%
|
650
|
Up to 100% of the cost of attendance
|
Varies
|
Ascent
|
Variable APR of 1.79% to 11.12%
Fixed APR of 5.31% to 14.96%
|
None
|
Up to 100% of the cost of attendance
|
7, 10, 12, or 15 years
|
Discover
|
Variable APR of 2.74% to 9.34%
Fixed APR of 4.49% to 10.99%
|
Not disclosed
|
Up to 100% of the cost of attendance
|
20 years
|
MPower Financing
|
Fixed APR of 11.99% without discounts
Fixed APR of 10.49% with discounts
|
None
|
$2,000 to $50,000 per loan ($100,000 lifetime limit)
|
10 years
|
What Are MBA Loans?
An MBA loan is a type of graduate school loan that is geared
to individuals pursuing a Master of Business Administration (MBA) degree. These
loans are taken out by individuals who want to pursue this advanced degree
after completing a bachelor's degree program.
What Qualifications Are Required for MBA Student Loans?
Qualification requirements for MBA loans vary widely
depending on the best MBA loan company chosen. Not only that, but some lenders
in this space do not disclose their minimum requirements for approval at all.
That said, the basic requirements to qualify for MBA student
loans include the following:
- Good credit, which entails having a FICO score of 670 or
above, or a cosigner with good credit
- Several years of credit history (usually at least 36 months)
- Enrollment in an eligible MBA degree program, usually at
least half-time
- U.S. citizenship or permanent resident status (with some
lenders)
How Do MBA Student Loans Work?
MBA student loans work similarly to other types of student
loans, although the exact terms can vary by lender. Read on to learn how much
MBA students can borrow, how long MBA loans take to pay off, and more.
How Much Can MBA Students Borrow?
Most financial institutions that offer private MBA loans let
students borrow up to the school-certified cost of attendance. This can include
not only tuition and fees, but also room and board, books and supplies,
transportation, and miscellaneous expenses.
That said, some lenders have annual or lifetime caps on
their student loans that can reduce your borrowing potential.
What’s The Average MBA Student Loan Debt?
As of last count, the average student debt for individuals
with Master of Business Administration (MBA) degrees worked out to $54,140 per
borrower. This figure comes from the National Center for Education Statistics(NCES), which tracks educational data and loan data, as well as graduation
rates by school and by degree program.
How Long Does It Take to Pay Off MBA Debt?
How long it takes to repay MBA loans depends on the chosen
repayment plan and whether or not the borrower makes additional payments toward
their debts. Lenders in this space offer repayment plans that last five to 20
years, and the majority do not charge prepayment penalties for loans that are
paid off early.
Can You Refinance MBA Student Loans?
Borrowers can definitely refinance their MBA student loans,
and that's true whether they borrow using private student loans or federal
student loans for graduate school.
Types of MBA Student Loans
There are several types of MBA student loans to be aware of,
including federal loan options and loans from private companies.
Federal Direct Unsubsidized Loans
Federal Direct Unsubsidized Loans are available to MBA
students regardless of their financial need. Since these loans are not
subsidized by the federal government, they begin accruing interest right away.
Loan limits are set at $20,500 per year for graduate students who take out
Federal Direct Unsubsidized Loans, and fixed interest rates are set at 6.54%
for loans disbursed between July 1, 2022 and June 30, 2023.
Also note that these loans come with an origination fee of
1.057%.
Federal Direct Graduate PLUS Loans
MBA students can also take out Direct PLUS loans to pay for
their MBA regardless of their financial need. These loans are not subsidized,
and a credit check is required. Direct PLUS Loans can also be used for the
remainder of your college costs, as determined by your school, that are not
covered with Federal Direct Unsubsidized Loans.
The interest rate is fixed at 7.54% for loans disbursed
between July 1, 2022 and June 30, 2023. Also note that an origination fee of
4.228% applies.
Private MBA Loans
Private MBA loans are offered by private companies like
College Ave Student Loans, SoFi, and Earnest. These loans typically let you
borrow up to 100% of the cost of attendance for an MBA program, and they tend
to come with no origination fees and no hidden fees.
Interest rates can also be lower for private student loans,
and payment plans tend to be flexible.
That said, it's worth noting that private student loans do
not qualify for federal protections like deferment and forbearance, or for
income-driven repayment plans.
Important: For the time being, payments are paused and
interest rates are set at 0% for most federal student loans due to the COVID-19
pandemic. This has been the case since March of 2020, and the current deferment
period is set to expire on August 31, 2022.
Pros and Cons of Private MBA Student Loans
If you're considering private student loans for your MBA
degree over federal student loans, there are some specific advantages and
disadvantages to be aware of.
Pros of Private MBA Student Loans
- Qualify for lower interest rates. Many of the best MBA
student loans come with interest rates that are lower than rates on federal
student loans for graduate students.
- Avoid origination fees. Most private lenders also offer
student loans with no origination fee, which is not the case for federal
student loans.
- Shop around to get the best deal. When you go with private
loans, you get the chance to shop around for the best deal. Meanwhile, federal
student loans offer the same interest rates and terms for everyone.
- Access higher loan limits. Where some federal student loans
for graduate students have annual loan limits, many private lenders let you
borrow up to 100% of the school-certified cost of attendance.
Cons of Private MBA Student Loans
- Private student loans do not qualify for federal deferment
or forbearance. Loans from private lenders do not offer access to federal
forbearance or loan forgiveness programs.
- You cannot repay your loan on an income-driven plan. Private
student loans do not qualify for income-driven repayment plans like Pay As You
Earn (PAYE) or Income-Based Repayment (IBR).
- Good credit is required. A credit check is always required
for private student loans, and you may need a cosigner if your credit score
isn't in the "good" range or higher.
- Variable rates can adjust higher. Where federal student
loans come with fixed rates that won't change, many private student loans come
with variable rates that can increase based on market conditions.
How to Apply for MBA Student Loans
Applying for a private MBA student loan works similarly
across all the major loan companies. The following steps can help you get the
funding you need to earn your MBA.
- Step 1: Compare lenders that offer MBA loans based on their
loan limits, interest rates, and loan fees.
- Step 2: Check each lender's minimum requirements for
approval, including minimum credit score, credit history, or income
requirements.
- Step 3: Check your rate with at least three or four lenders
to see which one offers the best deal.
- Step 4: Choose a lender and move forward with the loan
application. You'll need to share your contact information, your school and
degree program, your Social Security number, and more.
- Step 5: Send additional information or documentation your
lender requests, such as pay stubs or your tax return.
- Step 6: Find out whether you were approved for the MBA
funding you need, which can take place within hours or over the course of
several days.
- Step 7: Wait for your lender to send your loan funds
directly to your school.
- Step 8: Begin repaying your MBA loan based on the payment
plan you selected, or wait to make payments until the end of your loans' grace
period.
Conclusion
The best MBA student loans can help you graduate with an
advanced degree so you can earn more money, get a big promotion at work, or
both. However, you'll want to make sure you don't borrow any more money than
you need to, and that the loan you settle on has the best rates and terms you
can qualify for.
Before you apply for a MBA loan, it's smart to compare all
the lenders in our ranking based on metrics like their loan limits, loan fees,
interest rates, and repayment options. With some basic research and comparison
shopping, you can find out which student loan company can serve your needs
best.