Many students choose to pursue a Master of Business Administration degree after earning their bachelors, and there’s a reason why: the potential for a higher income.
According to a 2019 Graduate Management Admission Council (GMAC) report, U.S. employers planned to offer new MBA hires a $ 115,000 yearly salary; in the finance industry, salary offers were higher at $ 125,000. It’s no wonder an MBA degree is one of the most desirable qualifications among professionals. But boosting your career-earning potential through education will cost money. Thankfully, there are federal and private MBA student loans specifically available to help get you through business school.
CommonBond
Fixed APR
6.98%–10.74%
Variable APR
N/A
Fees
$ 10 or 5% late fee
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Discover
Fixed APR
5.09%–10.74%
Variable APR
2.47%–7.02%
Offer Details
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including MBA loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of October 1, 2020. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Our lowest APR is only available to customers with the best credit and other factors. Your APR will be determined after you apply. It will be based on your credit history, which repayment option you choose and other factors, including your cosigner’s credit history (if applicable). Learn more about Discover Student Loans interest rates.
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College Ave
Fixed APR
3.49%–12.99%
Variable APR
1.24%–11.98%
Fees
$ 25 or 5% late fee
Offer Details
*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. Rates 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. This 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. As certified by your school and less any other financial aid you might receive. Minimum $ 1,000. Information advertised valid as of 9/1/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
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SoFi
Fixed APR
4.23%–11.76%
Variable APR
N/A
Offer Details
UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.76% annual percentage rate (“APR”) (with autopay), variable rates from 1.90% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.83% APR (with autopay), variable rates from 1.80% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.11% to 11.81% APR (with autopay), variable rates from 1.78% to 11.72% APR (with autopay). PARENT LOANS: Fixed rates from 4.23% to 11.26% APR (with autopay), variable rates from 1.90% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 07/10/2020. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).
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The best MBA loans of 2020
The best MBA student loans at a glance
| Lender | Loan Amount | APR Range | Terms | Standout feature |
| CommonBond | Up to 100% of the cost of attendance (up to $ 110,000 annually) | 6.98%–10.74% fixed; N/A variable | 10 and 15 year | Supports students in developing countries |
| Discover | Up to 100% of the cost of attendance | 5.09%–10.74%1 fixed; 2.47%–7.02%1 variable | 20 years | No fees |
| College Ave | Up to 100% of the cost of attendance | 3.49%–12.99% fixed; 1.24%–11.98% variable | 5, 8, 10 and 15 years | Flexible repayment options |
| SoFi | Up to 100% of the cost of attendance | 4.23%–11.76% fixed; 1.97%–12.38% variable | 5, 10 and 15 years | Exclusive member benefits & discounts |
| Earnest | Up to 100% of the cost of attendance | 3.74%–13.03% fixed; 1.49%–11.69% variable | 15 years | Can change payment date twice |
| Sallie Mae | Up to 100% of the cost of attendance | 4.50%–12.36% fixed; 2.50%–12.01% variable | 15 years | Available for part-time students |
Rates accurate as of October 2020. All rates exclude lenders’ autopay discounts.
Best for no cosigner – CommonBond
Borrowers can feel good knowing that once their loan goes through, CommonBond will fund the education of a student in a developing country.
CommonBond MBA loans don’t charge application, origination or prepayment fees. Incentives you’ll get with an MBA loan through CommonBond are a 0.25% autopay discount, a quick online application process, flexible repayment options, six and 12-month grace periods, cosigner release and referral bonuses. Plus, for each degree fully funded, CommonBond contributes to the education of children in developing countries through Pencils of Promise. There are only 29 U.S. business school programs eligible for a CommonBond MBA loan, but if your school isn’t on the list, you can try for a CommonBond graduate loan. Read our full CommonBond Student Loans review.
Best for good grade rewards – Discover
For borrowers who want a well-known lender to help finance their next academic adventure, Discover will cover 100% of school-certified costs without fees.
Discover’s MBA student loans can cover up to 100% of business school with no fees. Applying online is quick and easy, and borrowers get the option to use a cosigner to boost loan approval odds. Discover MBA loan incentives come with flexible repayment options, interest-only repayment options, auto-debit discounts, a generous grace period and rewards for good grades. The cherry on top is that with good grades each semester, Discover will give cash rewards equal to 1% of your loan balance. Read our full Discover Student Loans review.
Best for flexible repayment terms – College Ave
Borrowers looking for a platform that offers flexible payments and an easy-to-use online platform should consider College Ave; prequalify without impacting your credit.
College Ave’s online platform offers a clean interface with lots of educational resources and loan calculators so borrowers can arm themselves with the best loan information. You can apply for a College Ave MBA loan in about three minutes — or see if you qualify without hurting your credit score — and there are no fees or prepayment penalties. Borrowers will also appreciate the flexibility of choosing a repayment plan and loan terms that fit their budget. However, College Ave does not offer a set forbearance policy for hardship, and its deferment policy is considered on a case-by-case basis only. Read our full College Ave Student Loans review.
Lowest variable rates – SoFi
SoFi is like the luxury spa of lenders; borrowers get membership access to unique benefits like financial and estate planning, career advice and more.
Not only is SoFi famous for its loan and banking services, but it also offers the lowest variable rates and flexible repayment plans for MBA loans, all without fees. SoFi MBA loans also come with member access to exclusive benefits like rate discounts, partner deals, referral bonuses and financial planning. Borrowers can finance 100% of business school with a quick online application or check loan rates without affecting credit scores. Once you obtain a SoFi student loan, SoFi will periodically check that you are maintaining satisfactory academic progress. Read more about SoFi in our Best Student Loans review.
Longest grace period – Earnest
For MBA students determined to finance their schooling with private loans so they can pay off debt faster, Earnest has the platform (and namesake) to serve.
Earnest is best known for its student loan refinancing options, but those specifically looking to finance an MBA program will be interested to know it also offers private student loans. Earnest offers one of the most extended grace periods — at nine months — and lets you skip payment at least once a year. Checking your personal rates won’t hurt credit scores, and there are four payment plans to fit any student budget. Earnest MBA loans also have no fees, and borrowers can save 0.25% for setting up automatic payments.
Best for FICO credit score checks – Sallie Mae
Sallie Mae is the Saul Goodman of lenders — with veteran status, it has the most resources an MBA student could ever want, but borrowers will need excellent credit to get the lowest rates.
With Sallie Mae, MBA school students can finance up to 100% of school-certified expenses, choose from three repayment options and decide on fixed or variable interest rates. Some perks borrowers will appreciate with a Sallie Mae MBA loan are rate discounts of 0.25% for auto-pay, cosigner release options, free FICO credit score and help with finding graduate school scholarships and grants. Unfortunately, Sallie Mae only offers 15-year repayment terms for MBA loans, and checking to see if you qualify for a loan requires a hard credit check. Read our full Sallie Mae student loans review to learn more.
What is an MBA loan?
An MBA loan is a special loan used to help finance a Masters of Business Administration degree from an eligible business college. MBA student loans can be financed through private lenders or federal student aid. While there are other graduate business degrees, an MBA degree is deemed most coveted by professionals and companies because it touches on multiple aspects of business and allows degree holders to advance careers in any industry. But an MBA degree isn’t cheap — it could cost between $ 13,000 and $ 180,000 — so it’s a substantial investment in your time and money.
[ Read: Six Questions to Ask Yourself Before Applying to Grad School ]
How MBA loans work
You can choose to use federal student aid, private student loans or a combination of the two to pay for MBA school. Federal loans offer low fixed interest rates and special protections like income-driven repayment plans, forbearance plans and loan forgiveness. Private loans don’t, but they do offer greater flexibility when it comes to loan amounts, interest rates and payment plans.
Federal MBA student loans
MBA students have two federal loan options:
- Direct Unsubsidized Loans: Annual loan limits are $ 20,500, APR is fixed at 4.30%, terms are 25 years and there’s a 1.06% origination fee. Interest starts upon disbursement of funds.
- Direct PLUS Loans: Borrow up to 100% of the cost of attendance. APR is fixed at 5.30%, with terms at 25 years and loan fees of 4.24%. Interest starts upon disbursement of funds. To be eligible, you must be a graduate student at least half-time at an eligible school and not have an adverse credit history.
To qualify for federal student aid, you must meet eligibility requirements and fill out a Free Application to Federal Student Aid (FAFSA) form.
[ READ: Where to Find Financial Relief During the COVID-19 Pandemic ]
Private MBA student loans
If you have poor credit, a private lender will let you bring on a cosigner, then let you apply for a cosigner release after two years. Plus, most private loans will let you fund up to 100% of the cost of attending school.
Pros and cons of MBA student loans
Pros
- Choose between variable-rate or fixed-rate loans.
- More options in repayment plans, deferment and grace periods
- Membership benefits and rewards
- Fund up to 100% of the cost of school admission
Cons
- Requires credit check and financial history.
- No income-driven repayment or forbearance plans.
- No loan forgiveness.
[ Read: Best Private Student Loans ]
Loan amount
A Bloomberg Businessweek survey in 2018 revealed that more than half of the 10,000 MBA graduates it surveyed had borrowed at least $ 100,000 to finance their degree. However, averages can vary depending on the type of school and class format you choose. According to The Economist’s 2018 Executive MBA Rankings, tuition for an executive MBA (EMBA) program was, on average, $ 133,000. But a part-time MBA or online MBA can cost much less, starting around $ 13,000.
Repayment
Federal Direct PLUS Loans and Direct Unsubsidized Loans come with a six-month grace period, and interest incurs upon disbursement of funds. You can opt for an income-driven repayment plan or ask for deferment if you have trouble making payments.
Private MBA loans also have six- or nine-month grace periods and incur interest upon fund disbursement. Payments are usually due immediately. However, some lenders allow MBA students longer deferments during internships or fellowships, but this is rare. It’s best to try and make payments throughout your loan since private loans continue to incur interest regardless of deferment status or grace period.
[ Read: How to Take out Student Loans without a Cosigner ]
How to choose the best MBA loan for you
- Fill out the FAFSA form as soon as you decide to have your education funded.
- Find the MBA program that fits your career objectives, personal availability and personal budget. Also, have a plan for when you graduate.
- Find the right B-school that fits your availability, timeline, academic needs and career objectives. Be realistic on how much time you’ll be able to dedicate to school during the week, especially if you have other obligations like a full-time job and family to take care of. Also, make sure the business school you choose is accepted by the lender.
- Calculate costs, including tuition, admission fees, books, travel and living expenses (if applicable), software fees, etc. Multiply that by how many years to graduation.
- Find other ways to fund school through grants, scholarships, employer-sponsored programs, local programs, internships or fellowships. These things can help defray costs, so you end up paying less out of pocket.
- Compare rates between current federal loan rates and private lender rates. Most private lenders offer soft credit checks.
- Choose your lender(s), apply and make your repayment plans.
[ Read: Eight Employers that Will Help You Pay Off Your Student Loans ]
MBA Loans FAQs
MBA loans are worth it only if you can make it a good return on investment. The cost of pursuing an MBA degree is high in both time and money, so seriously consider your career objectives. Is an MBA degree required to enter or excel in the field you wish to be in? Or is it required in another industry you wish to move into?
Also, ask yourself, how easy, or difficult will it be to move into that position/industry once you obtain your degree a few years from now? Will that industry/position still be around?
MBA student loans aren’t your only option to pay for business school. Other ways to pay for business school are through employer sponsorships, B-school fellowships, graduate scholarships, assistantships, retirement savings, joining the military or saving money over time through high-yield savings or investments.
Too long, didn’t read?
Pursuing your MBA degree is both challenging and exciting. A lot of planning and research should go into picking the right school and deciding whether a federal or private loan is right for you. Start early and get all the information you can before committing to a lender. Make sure you compare as many interest rates as you can to be sure you’re getting the best deal.
