The best MBA loans for business school

A Master of Business Administration (MBA) can boost your career and increase your earning potential. But you may be hesitant about taking on more student debt. Luckily, you have options to help finance your education.

You can apply for scholarships, grants, or other financial aid, but these aren't always enough to cover education costs. So, you may turn to student loans. Many federal student loans come with flexible repayment options, such as deferment and student loan forbearance. But federal student loans also have borrowing limits, and you may need private student loans to help you bridge the gap. Here’s what you need to know about MBA loans.

You can easily compare private student loan rates with Credible.

• What are MBA loans?
• 3 of the best MBA loans
• Other lenders to consider
• Which MBA student loan option is best for me?
• When do I have to repay my loans?
• Do MBA student loans cover living expenses?
• What to look for in an MBA loan
• How to apply for an MBA loan

What are MBA loans?

MBA loans can provide business students with the financial assistance to enroll in an MBA program. You can choose from two types of MBA loans: federal or private.

Not all MBA loans are the same — some loans have added fees, some require a cosigner if your credit isn’t up to par, and interest rates and repayment terms vary. Before turning to private loans, you should exhaust your other options, like grants, scholarships, and federal student loans.

3 of the best MBA loans

Citizens Bank

Citizens offers large loans, but you or your cosigner will need a strong credit score to qualify.

• Loan amounts: $1,000 to $225,000
• Loan terms: 5, 10, or 15 years
• Fees: Late payment
• Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability
• Cosigner release: After 36 months

College Ave

College Ave may be a good option if you want to make payments while you’re still in school.

• Loan amounts: $1,000 up to 100% of certified cost of attendance
• Loan terms: 5 to 15 years
• Fees: Late payment
• Repayment options: Full deferral, full monthly payment, fixed/flat repayment, interest only, immediate repayment, academic deferment, forbearance, loans discharged upon death or disability
• Cosigner release: Applications for cosigner release accepted once more than half of the scheduled repayment period has elapsed

Sallie Mae

Sallie Mae has a higher minimum repayment term, but offers cosigner release after just 12 months.

• Loan amounts: $1,000 up to 100% of certified cost of attendance
• Loan terms: 10 to 15 years
• Fees: Late payment
• Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, forbearance, loans discharged upon death or disability
• Cosigner release: After 12 consecutive on-time payments

Other lenders to consider

Discover

With a Discover MBA loan, students who maintain a 3.0 GPA may qualify for a cash reward of 1% of the loan amount. But Discover only offers one repayment term.

• Loan amounts: Up to 100% of cost of attendance
• Loan terms: 20 years
• Fees: None
• Repayment options: Deferment until 9 months after graduation or enrollment in school less than half-time, interest only, fixed repayment
• Cosigner release: Does not disclose

Earnest

Earnest offers a wide range of repayment terms, but the lender doesn’t offer cosigner release.

• Loan amounts: Up to 100% of cost of attendance
• Loan terms: 5, 7, 10, 12, 15, or 20 years
• Fees: None
• Repayment options: Full deferral, full-month payment, fixed/flat repayment, interest only, academic deferral, military deferral, forbearance
• Cosigner release: Not available

Methodology

Credible evaluated private student loan lenders in 10 different categories to determine the best lenders for graduate student loans. This included interest rates, repayment options, terms, fees, discounts, customer service availability, as well as eligibility requirements and cosigner release options.

Which MBA student loan option is best for me?

Depending on your financial circumstances, you may choose between a Federal Direct Unsubsidized Loan, a Federal Grad PLUS Loan, or a private graduate student loan. Each has pros and cons, so consider your options carefully.

Federal Direct Unsubsidized Loans

The government offers Federal Direct Unsubsidized Loans. You don’t need to demonstrate financial need to get an unsubsidized loan, but you’re responsible for paying interest on it. Luckily, federal loans have fixed interest rates, so your rate will remain the same over the life of your loan.

With a Federal Direct Unsubsidized Loan, you can borrow up to $20,500 annually, as long as you’re enrolled at least half-time.

Federal Grad PLUS Loans

Grad PLUS Loans are federal student loans that help pay for grad school. To qualify, you must pass a credit check, and you must be enrolled at least half-time. With a Grad PLUS Loan, you can borrow up to the full annual cost of attendance, minus other financial aid. Interest rates are fixed, and you can defer loan payments while in school.

You also have a choice of multiple loan repayment plans — including income-driven repayment — and loan repayment terms are typically between 10 and 25 years.

Unlike federal student loans, private student loans are issued by banks, credit unions, and other independent lenders. It can be harder to qualify for a private student loan, since lenders consider your credit score and history. For this reason, many students need a cosigner to qualify.

Private student loan interest rates may be fixed or variable, and private loans don’t qualify for programs like loan forgiveness. But if you’ve exhausted your federal student loan options, you can apply for private loans to cover any gaps. Private student loans typically have much higher borrowing limits than federal loans, and you can apply whenever you need them — including mid-semester.

When do I have to repay my loans?

This depends on whether your loans are federal or private. With federal Direct Unsubsidized Loans and Grad PLUS Loans, you have a six-month grace period after graduating college before repayment begins.

Not all private lenders offer deferment. Before accepting an MBA loan from a private lender, ask about repayment.

Do MBA student loans cover living expenses?

MBA loans cover the cost of tuition, fees, books, and other school expenses. You can also use them to cover both on-campus room and board and off-campus housing and utilities.

What to look for in an MBA loan

After you exhaust all your other options — scholarships, grants, work-study programs, and federal loans — you can turn to private MBA loans to fund your education. When comparing private student loans from different lenders, consider the following factors:

• Eligibility criteria — Banks and credit unions typically require good to excellent credit to qualify. You may not qualify for private loans unless you have a cosigner with strong credit.
• Interest rates — The best private student loans have low interest rates. This is important since you’ll accrue interest on both federal and private loans over time.
• Fees — Some banks, credit unions, and online lenders charge fees, like origination, application, prepayment, and late fees. Look for a loan that charges few or no fees.
• Repayment options — Lenders typically offer flexible repayment options, such as interest-only payments while attending school, fixed repayment, and deferment.
• Discounts — Many lenders offer discounts when you set up autopay, and some reward good grades with a discount.
• Customer service — When you have questions, it’s nice to know you can reach out to a customer service rep for help. Some lenders, particularly online lenders, have 24/7 customer service.

How to apply for an MBA loan

The application process for MBA loans depends on the loan type. Take these steps when applying for federal or private MBA loans:

Federal loans

1. Fill out the FAFSA. This will determine which types of financial aid you qualify for, including scholarships, grants, and loans.
2. Review your Student Aid Report from the U.S. Department of Education and ensure all the information is correct.
3. Contact the financial aid office at your school of choice to accept the financial aid and fill out any additional paperwork.
4. Finally, you’ll receive funding, which is paid directly to the school.

Private loans

1. Shop around for a private lender that works best for you.
2. Line up a cosigner if necessary.
3. Gather the necessary paperwork, including your Social Security number, contact details, proof of employment, and a copy of your latest tax return.
4. Fill out an application.
5. Receive funding.