Best MBA Loans for Business School

By Mollie Allen Updated on July 1, 2021

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MBA student loans are a reality for most students pursuing an advanced business degree. Business school is challenging enough. Paying for your MBA does not have to be. There are a number of student loan options available for professional school. Here’s what you need to know.

Loans for Business School

Using loans for business school is a popular way to finance your MBA. However, student loans should supplement scholarships, Federal Work Study (for those with demonstrated financial need), and employer tuition reimbursement (if applicable). You’ll definitely want to compare federal loan options, but if you still have a void in your financial aid picture, you may need an MBA Loan.

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Recommendation

Best for Private Loans

Interest Rates

Variable Rates: 1.13% APR - 11.23% APR¹

Fixed Rates: 3.50% APR - 12.60% APR¹

Repayment Terms

N/A

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• Variable Rates: 1.13% APR - 11.23% APR. Fixed Rates: 3.50% APR - 12.60% APR. Lowest rates shown include the auto debit discount.¹
• Choose from multiple repayment options, including no payments while in school¹
• No origination fee or prepayment penalty²
• Cover up to 100% of your school-certified college expenses like tuition, fees, books, housing, meals, travel, and even a laptop for the entire school year³
• The only undergraduate student loan that offers 4 months of Chegg® study help ⁴

This loan is for undergraduate students at participating degree-granting schools. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend a participating school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident) and provide an unexpired government-issued photo ID to verify their identity. Applications are subject to a requested minimum loan amount of $1,000. Current credit and other eligibility criteria apply.

¹Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. Payments may be required during the grace/separation period depending on the repayment option selected. Variable rates may increase over the life of the loan. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs assume a $10,000 loan to a borrower who attends school for 4 years and has no prior Sallie Mae loans. The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment, if available for the loan.

²Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note-first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.

³Loan amount cannot exceed the cost of attendance less financial aid received as certified by the school. Sallie Mae reserves the right to approve a lower loan amount than the school-certified amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half time.

⁴This promotional benefit is provided at no cost to borrowers with undergraduate or parent loans with a first disbursement between May 1, 2021 and April 30, 2022. Borrowers are not eligible to activate the benefit until July 1, 2021. Borrowers who reside in, attend school in, or borrow for a student attending school in Maine are not eligible for this benefit. Chegg Study® offers expert Q&A where students can submit up to 20 questions per month. No cash value. Terms and Conditions apply. Please visit http://www.chegg.com/legal/smtermsandconditions for complete details. This offer expires one year after issuance.

Information advertised valid as of 11/25/2021

SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.

Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. All other names and logos used are the trademarks or service marks of their respective owners.

Sallie Mae loans are made by Sallie Mae Bank.

Edvisors is not the creditor for these loans and is compensated by Sallie Mae for the referral of Sallie Mae loan customers.

© 2021 Sallie Mae Bank. All rights reserved. SLM Corporation and its subsidiaries, including Sallie Mae Bank are not sponsored by or agencies of the United States of America.

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Recommendation

Best for Private Loans

Interest Rates

Variable rates as low as: 0.94% APR¹

Fixed rates as low as: 2.94% APR¹

Repayment Terms

5, 8, 10 or 15 years²

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• Competitive fixed and variable APRs starting at 0.94%¹
• Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
• Flexible payment terms ranging from 5, 8, 10, and 15 years²
• Coverage up to 100% of your school-certified cost of attendance ($1,000 minimum)³
• No origination, application and processing fees, no fees for early repayment
• Apply online in 3 minutes and get an instant credit decision

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

¹Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

²This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

³As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 11/24/2021. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

MBA Student Loan Rates

The interest rates for MBA loans can be highly competitive. Federal student loans rates for business school start at 5.28% for unsubsidized student loans and 6.28% for Grad PLUS Loans. Private student loans offer competitive rates often with no origination fees. Current rates range from 0.99% to 14.50%.

The rate you qualify for will depend on your creditworthiness and/or that of your cosigner, as well as whether you opt for a fixed or variable interest rate MBA loan.

Best MBA Student Loans

It is always best practice for MBA students to exhaust federal loans first, as they come with certain benefits and protections (such as lengthy deferment and forbearance terms, and various repayment options) that you will not find with private student loans. However, private student loans may offer more competitive interest rates, save you money on fees, and may allow you to borrow enough to cover your financial gap. Here are our top picks for private student loans for business school.

We work with the top lenders that offer options for MBA Students.

Borrower Benefits

The following benefits may be included in your MBA student loan:

No Prepayment Penalties

This is standard across the board but always reassuring. If you come into a windfall or just work really hard to earn extra cash to pay down your student loan debt, there is no penalty for early repayment.

Auto-Debit Discount

The auto-pay discount is also a pretty common incentive, shaving between 0.25% and 0.50% off your interest rate by authorizing your student loan payments to be automatically deducted from your bank account. Before you enroll in auto-pay, be sure to check account requirements.  Some lenders require you use an account from their financial institution for automatic payments rather than an account of your choice.

Existing Customer Discount

Some lenders offer an interest rate reduction (typically 0.25%) if you are an existing customer with a prior or qualifying account.

Cosigner Release

If it is important to you to have the ability to release a cosigner from your MBA loan in the future, look for this option when reviewing loan products. The lender will require anywhere from 12 to 48 on-time monthly payments to qualify. And, of course, your creditworthiness will need to be reevaluated at the time you request your cosigner to be released to make sure you can handle the payments on your own. Each lender will set their own terms for cosigner release, so make sure to read through the fine print.

Deferment and Forbearance Options

Lenders may offer member protections in the form of deferments or forbearances. For example, if you run into a financial hardship or unusual circumstances, such as a job layoff or military deployment, your lender may grant you a temporary deferred repayment option to postpone your loan payments. This will enable you to get back on your feet, avoid your loan being considered delinquent or entering default, and help protect your credit score. Be mindful, the total amount of available deferment or forbearance time may be limited and the number of qualifiers for these options may also be restrictive.

Free FICO® Credit Scores

Periodic free credit scores may be provided by certain lenders, typically on a quarterly basis. Along with furnishing your actual credit score, you may be given information about the primary factors impacting your score and tips or best strategies to monitor and handle your credit in the future.

Choice of Repayment Plan

This comes in two stages. First, your lender may offer choices up front that could save you money. An example would be an interest-only payment plan while you’re in school that could provide a lower rate than a deferred repayment option. Second, you may find that some of today’s lenders give you the choice of how many years you’d like to repay your loan. For example, you could choose 8, 10, 12 or 15 years. Keep in mind that there are no prepayment penalties. A choose-your-own repayment plan could help ensure your payments are structured in a way that keeps you on top of your finances according to your financial circumstances and desired schedule, especially if you choose an auto debit payment method.

Federal Student Loans for MBA

Keep in mind federal loan options like the Direct Unsubsidized Loan, and the Grad PLUS Loan for graduate students can also be used to finance your education. These loans (or the option of these loans) are presented to you in your financial aid award letter from your school. Federal loans are known to have a number of deferment and loan repayment options associated with them.

Graduate students can borrow up to $20,500 per year in the Direct Unsubsidized Loan program and up to the full cost of attendance (minus other financial aid received) in the Grad PLUS Loan program, a loan that requires a credit check. However, note that in today’s marketplace private lenders may offer rates that are lower than some federal student loans. Neither the Direct Unsubsidized Loan nor the Grad PLUS Loan are subsidized for graduate students. This means your loan will accrue interest from the day it is disbursed, and you will be responsible for repaying interest.

Part-Time MBA Student Loans

Part-time students as well as full-time students may be eligible to borrow MBA loans provided they meet the following criteria:

• U.S. citizen or permanent resident*
• Enrolled at least half-time as a graduate student (at an eligible institution)
• Making satisfactory academic progress (SAP)
• Have a positive, verifiable credit history — or a cosigner with a strong credit history (as well as meet all other lender criteria)

*Some lenders will accept applications for MBA student loans from foreign borrowers applying with a creditworthy cosigner. The cosigner needs to be a U.S. citizen or permanent resident.

MBA Student Loan Limits

The minimum MBA loan amount you may be eligible to borrow is usually $1,000 but you will want to check with your lender.

The maximum amount you can borrow equal to your certified cost of attendance, minus other financial aid, as certified by your school.

MBA Student Loan Repayment

The length of your student loan repayment term will depend on your loan balance but could be as long as 20 years following your in-school deferment and grace period. Your lender may offer different repayment options while you’re enrolled in school, like immediate repayment, interest-only payments, or deferred payments. You will remain in the grace period until your enrollment status changes to less than half time, you leave school, or graduate. Payment typically begin six months after the grace period ends. Your lender may allow you to choose your repayment term. The longer your repayment term, the more affordable your monthly payments will be, but on the flip side, the more you will repay in total. How much more will depend on the interest rate on your loan and length of your repayment term. 

If you’re looking to simplify your MBA student loan payments, or lower your interest rate, you may want to consider student loan refinancing. Some of the benefits of refinancing may include:

• Lowering your monthly payment amount
• Lowering your interest rate
• Decreasing how much you pay over the life of your loan

Which MBA Student Loan is Right for You?

The best MBA student loan for you will depend on your financial situation and educational funding gap. Generally, it’s best to start by exploring your federal student loan options before considering a private student loan.

When it comes to federal MBA student loans, direct unsubsidized loans are a top option. These loans often come with low interest rates, income-driven repayment options, and qualify for loan forgiveness in some circumstances. While you will have to pay the accrued interest eventually, you can choose not to pay interest while you’re enrolled at least half time and during the loan’s grace period.

These loans don’t require a credit check or have any income requirements, but they do have an origination fee that averages just over 1%. There are also loan limits that affect how much you can borrow with federal direct unsubsidized loans. For those enrolled in an MBA program, that’s $20,500 per year, and $138,500 total. Once you reach the aid limit for unsubsidized loans, Graduate PLUS loans are the next best federal student loan option.

Graduate PLUS loans allow you to borrow up to your total cost of attendance minus other financial aid received. They come with the same benefits as federal direct unsubsidized MBA loans, including lower interest rates, flexible repayment options, and eligibility for loan forgiveness programs. On the downside, Graduate PLUS MBA loans require a credit check and have higher origination fees. You don’t necessarily need excellent credit, but adverse credit history (as defined by the U.S. Department of Education) may disqualify you.

To qualify for federal direct unsubsidized or Graduate PLUS loans, you must be enrolled at least half-time. Unfortunately, international students do not qualify for federal direct unsubsidized or Graduate PLUS loans if they are not otherwise eligible for federal student aid.  If you are an international student and ineligible for federal student aid, you may want to explore your private student loan options.

What to Look for in a Private Student Loan

When considering a private MBA loan, it’s vital to review the terms and conditions carefully for the qualification requirements. You also want to note the repayment options and any borrower benefits (like, postponement and discharge options). 

Consider Your Loan Eligibility

The first thing you want to look for is, of course, loans that you qualify for. Factors that may affect your eligibility for most private MBA student loans include:

• School eligibility: Depending on your school, your loan options may be limited to lenders that are willing to work with student attending your school. Most private lenders allow any major accredited university, but some only approve loans for specified schools or degree programs.
• Credit history: All private MBA loans require a credit check. While many private lenders only require borrowers to have a minimum credit score of about 660, you will get a lower interest rate with a credit score above 700.  Borrowers in the excellent credit score range (above 800) typically get the best rates and loan terms. If you are unable to qualify on your own, you can apply with a creditworthy cosigner.
• Income: Like with most loans, you will need to demonstrate proof of income by demonstrating at least two-years of work history. If you haven’t been able to earn income while enrolled in school, you do have the option to apply with a cosigner to help you qualify for a loan.
• Debt-to-income ratio: If you have high debt in relation to your income, your student loan lender may think you are a high-risk borrower.  

Avoid Predatory Lending and Scams: Find the Right MBA Loan Lender

After you’ve narrowed down your MBA loan options to those you qualify for, the next step is to rule out poor lenders. While predatory lending is less common with student loans, it does happen. Watch out for these warning signs:

• Lack of transparency: Your lender should be transparent regarding loan terms. If information is unclear, such as whether the loan has a fixed or variable interest rate, stay away.
• Lax lending requirements: Most reputable lenders won’t approve borrowers with a credit score under 660, adverse credit history, or no income. If you are not asked for a credit check, the lending requirements seem lax, or you are offered more than your cost of attendance, you may be dealing with a student loan scam.
• High interest rates: An interest rate above 14% is unusual for an MBA loan. If a lender is offering a rate above that, note the red flag. Start reviewing other terms and conditions on the loan, you may notice other odd features of the loan to confirm your suspicions.
• Abnormal fees: A reputable MBA loan provider will only include principal and interest in your loan amount. If there are any other unnecessary costs rolled into the loan, that’s a red flag. Loans with high late fees, prepayment penalties, or other unusual loan terms should be approached with caution.
• Asset-secured loans: You should never be asked to use your house, car, or other high-value assets as collateral for a student loan. Student loans are unsecured debt, and collateral is not required.

If you are ever concerned the student loan you are reviewing is a scam, start doing some research. Try to research the loan and look for student loan reviews. If you feel like you have encountered a student loan scam, or are a victim of a student loan scam, it’s important your report the fraudulent activity to the FTC

Look for the Best Interest Rate and Loan Terms

Remember to pay attention to other factors that may affect the total cost of the loan, such as interest rates and origination fees. In addition, look for factors that may reduce your total loan cost as well, like an interest rate discount for setting up automatic payments. Repayment options are another important aspect to consider. Flexible repayment options can make all the difference if you find yourself struggling to make your monthly payments in the future.

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