Heading into a Master of Business Administration program?
Here’s the good news: The average pay for MBA grads three years after completing the degree is $142,000 per year, according to the Financial Times. That’s a sweet salary — but getting there will cost you.
Total out-of-pocket costs for an MBA average $128,000, according to Bloomberg. Although the average student takes out $53,000 in MBA loans, six-figure balances aren’t uncommon. Here’s how to find the best MBA loans to fund your degree.
What to look for in MBA loans
MBA loans are specialized private student loans offered exclusively to students who are accepted or enrolled in MBA programs.
MBA loan interest rates
Private MBA student loans often beat interest rates and fees levied on federal loans available to MBA students.
However, getting the best MBA loan interest rate likely will come down to your credit score. You’ll usually need at least a decent credit score to qualify for private student loans, and a score around 720 or higher can help you get the lowest rates. If you score is lower, applying with a cosigner who has excellent credit can help you qualify for a better rate.
Other MBA student loan terms
You’ll need to make sure all aspects of an MBA loan fit your needs — not just the interest rate. Make sure the lender:
- Works with MBA students and will extend funding for your specific business school
- Offers MBA loans with the amount you need to borrow to cover your MBA program costs
- Has student loan terms that match your repayment goal, whether it’s repaying MBA loans in five years or 15
- Provides in-school deferment and other manageable repayment options
- Helps borrowers in repayment by offering protections such as forbearance for economic hardship
Lastly, you’ll need to have decent credit to qualify for MBA loans. Private student loans usually require a credit score at least in the mid-600s.
4 best MBA loans available today
We’ve rounded up our favorite lenders offering the best MBA loans. Each lender has its own loan terms and lending criteria, so see which lenders might be a good fit for you.
Additionally, advertised rates might not match what you’re offered. Complete a soft credit check when possible and compare your custom rate estimates. (All rates accurate as of December 2017.)
1. Citizens One MBA Loans
- Variable rates that start as low as 3.24% APR
- Fixed rates that start at 5.25% APR
- Interest rate discount of up to 0.50% (reflected in quoted interest rates)
- Terms of five, 10, and 15 years on MBA loans from Citizens One, a brand name of Citizens Bank
- Loan limit up to the “total cost of education” or $225,000 limit, whichever is lower
- Full in-school deferment of MBA loans
- Option to make interest-only payments or start immediate repayment
- No MBA loan origination fee or prepayment penalty
- Multiyear approval for eligible students
2. CommonBond MBA Loans
- Variable rates that start as low as 4.96% APR
- Fixed rates that start at 5.99% APR
- Interest rate discount of 0.25% for enrolling in autopay
- CommonBond MBA loan terms of 10 and 15 years
- MBA loan limit up to the cost of attendance (after other student aid is applied) or $110,000 per year, whichever is lower
- Fully deferred, interest-only, or immediate repayment options
- Forbearance for economic hardship
- Origination fee of 2 percent, which is reflected in stated APRs from CommonBond
- 29 eligible MBA programs
- Option to apply for an MBA loan alone or with a cosigner
3. Laurel Road MBA Loans
- Variable rates that start as low as 5.24% APR
- Fixed rates that start at 6.24% APR
- 0.25% rate discount for autopay on Laurel Road MBA loans (reflected in rate estimates)
- 0.25% rate discount for MBA graduates who earn more than $100,000
- Loan limit up to your MBA program’s full cost of attendance
- Student loan terms of 10, 15, and 20 years
- No origination fee or prepayment penalty
- Option to defer payments or make interest-only or full principal and interest payments
- Up to one year forbearance on Laurel Road loans for economic hardship
- Death and disability forgiveness
- 17 eligible schools
4. Discover MBA Loans
- Fixed rates that start as low as 6.49% APR
- Variable rates that start as low as 4.62% APR
- 0.25% rate discount for autopay on Discover MBA loans
- Loan limit up to your MBA program’s full cost of attendance
- No origination fees
- Grace period of up to nine months after graduation for full-time students
- Option to make fixed $25 payments while in school
- Repayment term of 20 years
- Rewards for good grades
- Available to U.S. and international students (a cosigner is required for international students)
Should you use private MBA student loans?
As you weigh your borrowing options, don’t forget to compare private MBA loans to federal student loans. Private loans can be a smart option for MBA students, who are four times more likely than undergraduate students to qualify for a private student loan without a cosigner, according to Sallie Mae*†.
Since an MBA often leads to higher pay and solid employment prospects, many lenders offer some of their best terms on these types of student loans. Private MBA student loans often have low or no fees, low interest rates, and flexible repayment terms, including deferment and forbearance.
The alternatives to private MBA loans are federal student loans, which can be more expensive. MBA students have two federal student loan options:
- Graduate Direct Loans: 1.066 percent loan fee and 6.00% interest rate for the 2017-18 school year
- Grad PLUS Loans: 4.264 percent loan fee and 7.00% interest rate for the 2017-18 school year
To know for sure, you’ll want to get a few rate quotes on MBA loans and compare them to federal student loan rates. Make sure you include the fee in your calculations, as it can be a significant cost.
There’s also a CommonBond calculator that allows you to easily compare its loans to federal Grad PLUS Loans (pictured below). According to its estimates, a borrower who qualified for the lowest rate would save $7,917 on a balance of $50,000.
Of course, some MBA students might be better off relying on federal student loans. If your credit is less than perfect, for example, you might not qualify for the lower rates that can make private MBA loans a smart choice.
Federal student loans also come with important borrower protections, including:
- Access to income-driven repayment plans
- Option to pause repayment with deferment or forbearance
- Federal student loan forgiveness
- Student loan default rehabilitation
As a business school student, however, you’re probably skilled at making cost-benefit comparisons. Apply those skills to your student loans, and you can quickly find the right option for you.
*Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
†The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
Need a student loan?Here are our top student loan lenders of 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for CollegeAve.
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.
Information advertised valid as of 2/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.26% – 13.26%1||Undergraduate and Graduate|
|4.20% – 11.44%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.62% – 11.47%*,4||Undergraduate and Graduate|
|4.38% – 13.38%5||Undergraduate and Graduate|
|5.85% – 6.99%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.47% – 12.34%8||Undergraduate, Graduate, and Parents|