The fee structure of IPM is the only cons of the otherwise great Programme that is getting excellent traction among UG students. The sky-high fee is one of the main reasons many students decline the admission letter and opt out of more affordable bachelor\’s degree options. The total five-year fees for the IPM programme at most of the IIMs is around 30 Lakhs and if you include the other expenditure as well, it even breaches the 35-lakh mark.
Nonetheless, the Programme offers great career prospects, and if you have really set your mind on becoming a part of it, we have some good news for you. If you are offered a provisional seat at IIM IPM Programme, you can avail a student loan from the Banks to cover your fees. Yes, you read it right. Bank does offer student loans to cover your fees but hey, wait for a second, don\’t get too excited; there are many things that we first need to understand.
Education loan isn\’t a new thing in the market; you can take education loan for most colleges and most degrees. But the general education loans have a ceiling of 7.5 lakhs, and you cannot take a loan of more than 7.5 lakh. But yeah, this would not even cover your first two-year fees.
Here is the exciting part, Banks have special loan offers for students who get admission to IIMs. Under this scheme, you can get loans of 20 lakhs and even 30 lakhs with collateral. So, on that note, lets look at the full analysis of bank loan for IPM.
Why do banks give loans to IPM Students?
IIMs are one of India\’s most sought-after and prestigious institutes, alongside IITs and AIIMS. Obviously, if someone completes her degree from IIMs, they will get good placements. Though there are some exceptions, most IIMs pass-outs fetch a hefty package from a top company. So, yeah, Bank assumes that their investments are safe, and the chances of default are very slim for a bank loan for IPM.
Also, there are some other incentives. Banks see a future prospective customer in IIM Students. If you have a good package, your expenses will be on the same line. You will need a credit card in the future; you may not settle with Suzuki and get a car loan for your Mercedes and many other things.
Which Bank Provides Loan for IPM Students?
Most of the top banks in India, such as State bank of India, ICICI Bank, and Axis Bank, provide easy Bank loans for IPM Call holders. But remember, Banks are not a social organization. They are here to make profits, and just because to get an easy loan from any of the Bank doesn\’t mean that you should just choose it. Most private banks, such as ICICI and Axis, have very strict terms and conditions, not to forget their high-interest rates. Private Banks usually charge interest of more than 10% on education loans (Including Bank loans for IPM). So I would strongly discourage you from taking a bank loan for IPM from a private bank.
Best Option for IPM Loan: SBI Scholar Loan
SBI scholar scheme loan is hands down the best option for all the IPM students avail of a bank loan. Under the SBI Scholar scheme, SBI provides a collateral-free loan of up to 20 lakhs for all the students who get admission into the A Category institute.
SBI has divided institutes into different categories such as AA, A, and B. Only IIM Ahmedabad and Indian school of business come under the AA category, while all the other IITs and IIMs come under the A category. Let us look at why SBI Scholar is the best option for an avail bank loan for IPM Students:
- Collateral free loan up to 20 Lakhs
- If you are willing to put collateral, you can avail a loan of up to 30 Lakhs.
- No Processing Fee
- Repayment Period: 15 Years
SBI Bank Loan for IPM Students: Key Highlights
|Category||No Collateral||Tangible collateral of full value|
|List AA||40 Lacs||–|
|List A||20 Lacs||30 Lakhs|
|List B||20 Lacs||–|
|List C||7.5 Lakhs||30 Lakhs|
*All the IIMs Offering IPM comes under List A.
Should you take a Bank loan for IPM?
See, taking a loan is easy; repaying it is the hard part. Now just because you have been offered a seat at IIM, don\’t let your emotions overpower your reasoning. First of all, managing 30+ lakh for education is a daunting task for 99% of households in India. If you have some financial issues, then don\’t feel bad and don\’t criticize your parents. This is not your chance to get into IIM, and You can always give CAT and get your seat at IIM. Also, just because it is IIM, it doesn\’t mean that you will get high pay and repaying this in just two years.
Most students think like okay, this is just 30 lakhs, the average Package is 15 lakhs, so I will easily repay the entire loan in just two years. Sorry, but that\’s not how it will fold out. By the time you will complete your 5-year degree, the interest rate will already make the loan amount cross the 40-lakh mark.
The Package you see on placement reports is CTC (cost to company). The in-hand salary would be around 80% of that figure. When you start working, you will have a ton of other expenses. At most, you could use half of your salary for loan repayment. You will need around 6-7 years to repay your loan.
In a nutshell, you should only take a Bank loan for IPM if you can pay around 15 lakhs from your pocket. You should not take a loan for the entire fees, it can severely impact your finances in the long term.
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