Although earning a Master’s degree in Business Administration (MBA) may open a wide range of career opportunities, it’s expensive to get there. On average, an MBA graduate student has a debt of about $66,300. Hence, to finance your MBA program, there are several options that you can explore. These range from private or federal MBA student loans, scholarships, or even dipping into your savings. Either way, you need a solid financial plan to pay and complete your MBA program. While an MBA pays off in different ways, both priceless and quantifiable, it can be expensive in the short term. You not only incur tuition and other expenses associated with your study but also, most times, you may have to forego your salary for the duration of the program. That is the reason most students decide to take loans. But what are the best MBA student loan options? How do you choose the right one? This post will carefully examine the best private loan options for MBA and what you should know about them.
It is advisable to begin with federal student loan options because they have many protections and benefits like forgiveness programs for student loan programs and income-driven repayment plans. However, if you decide to take private MBA student loans or have exhausted federal loans, listen to as many lenders as possible. It goes a long way in determining which kind of loan is right for you. Below are some factors to consider while deciding on the lender.
Factors to Consider When Evaluating a Student Loan Company
The interest rate on the student loan
Private lenders do not offer typical interest rates for student loans. They offer a variety of rates, with many lenders letting you choose between fixed- and variable-rate loans. For a variable rate loan, the interest may change. Therefore, there can be a change in the monthly payments, which means you may pay more for the loan. However, with fixed rates, the interest rate remains the same throughout the loan. Interests on a variable-rate loan are usually lower than on fixed-rate loans.
In-school repayment options
You can save money on interest when you pay the student loan while in school. However, this is not economically viable for Most students. Private MBA student loan lenders have contrasting rules regarding loan repayment while in school. The following are the repayment options for enrolled students: interest-only payments, full payments, flat $25 monthly payments, and no payment until after graduation and expiry of our grace period. Ensure that the private lender has your preferred repayment plan.
The terms of loan repayment
The other critical factor to consider when comparing different private student loan companies is the term length. For instance, Juno has repayment terms of 5, 10, 12, and 15 years. When you choose a shorter repayment plan, it takes a small duration to repay the loan. Therefore, you will pay less interest on a short-term student loan than on the long term. However, because you are paying few monthly payments, they will be higher.
Loan fees
Although many private MBA student loan lenders do not charge origination fees or prepayment penalties, you must double-check. They can add a substantial cost to your loan.
Other factors to consider are customer service and the cosigner rules.
Private Lenders that Offer MBA Student Loans
Having looked at the factors to consider before selecting the private MBA lender, let us now look at where you can find these private loans.
College Ave
This is among the most common private loan companies to date. It offers both fixed and variable APR at 2.99%+2,3 and 0.99%+2,3. College Ave offers student loans of $1000 up to the attendance cost that can be repaid in 5, 8, 10, 15 years. It offers varying repayment options to the students. They include full monthly payments, immediate repayments, full deferral, academic deferment, flat/fixed repayment, forbearance, and the loans discharged on disability or death. However, they charge late fees and have autopay discounts for the students. They can only release the cosigner after 24 months.
Citizens
Compared to College Ave, Citizens have a higher interest rate with fixed and variable APRs at 3.23%+1 and 1.03%+1. It requires a minimum credit score of 720 and offers a loan amount of $1,000 to 350,000 that you can repay in 5, 10, 15. It has similar repayment plans to College Ave. However, they charge late fees and have auto-pay and loyalty discounts for the students. They can only release the cosigner after 36 months. They offer customer service in email, chat, and phone.
Sallie Mae
The next private lender is Sallie Mae. It has slightly higher fixed APR (3.5% -12.6%) ad variable APR (1.13%-11.23%). Like college Ave, they offer a loan amount of $1000 up to the attendance cost to be serviced for 10 to 15 years. It has similar repayment plans to the two other private lenders above. They can only release the cosigner after 12 on-time consecutive payments and is available for US citizens and non-US citizens attending school in the US who apply with a qualified cosigner.
Final Thoughts
Getting an MBA can be expensive, but it is worth it for many. It gives the graduate many career options. While financing it out of the pocket can be expensive and tiring, there are other options like student loans and scholarships that you can opt for. Above are the best private MBA student loan options you can choose from. They offer better APRs and repayment terms.
