There’s no two ways about it, business education is expensive. For many prospective MBA students, financing a degree is going to be one of the biggest hurdles to accessing further education.
Often, an MBA student loan is vital. But with so many providers and different rates and packages on the market, deciding where to go to solve your funding woes can be overwhelming—particularly true if you’re considering studying abroad.
Scott Ponce, originally from the Philippines, is a current MBA student at SDA Bocconi School of Management in Milan, Italy, and experienced the difficulties of securing funding first-hand. Scott however, was able to secure an international post-graduate loan from Prodigy Finance.
Established by three INSEAD MBAs, Prodigy Finance’s borderless credit model gives international MBA and master’s students—from 118 countries worldwide—access to the loans they need to study abroad. Prodigy Finance has lent more than $410 million in loans to over 9,400 students globally.
BusinessBecause caught up with Scott, who explained the dos and don’ts of applying for an MBA student loan.
Do choose a provider that understands the value of business education
“I explored options from banks in the Philippines and Singapore, where I used to work. Typically, they can only grant you a limited amount based on your salary,” Scott explains.
“They have very inflexible terms for loans and you need to repay them within a certain time. Usually if you pay earlier, they don’t adjust the interest and so there’s no incentive.”
Most of the banks Scott approached for a loan were not set up to reflect the unique circumstance of an MBA student. “That’s why I chose Prodigy Finance,” he says.
“The loan is very student-friendly. Prodigy Finance understands the demands and rewards of studying an MBA, and their loans are tailored to it.”
Don’t take out more than you need to
Before taking a loan, try to get funding from your savings, family, and/or a scholarship. Aside from school fees you will also have living expenses to consider.
Despite increasing your value through completing an MBA, employment isn’t guaranteed on leaving business school. It’s important that students don’t run up more debts than they absolutely have to.
Do read the terms and conditions and double check
Understanding your liabilities is essential in ensuring that you don’t end up owing more than you need to. An overly cautious approach is better than a laissez faire one—don’t assume, double check.
“Make sure you check the interest rates, the one-time fees, the variable components, how long you need to pay and when you should start,” Scott confirms.
“Even if I read and felt I understood the conditions, I always sent an email and talked with someone from the provider to verify my understanding.”
Don’t agree until you’ve compared other offers
Even if you're happy with the terms and conditions you should investigate other providers. While on the surface some deals may look better, it’s important to compare all aspects such as the grace period, the benefits of repaying early and the method of repayment.
“It’s important to consider the total cost and not just rates,” Scott explains.
“No matter how low the rate is, if you don’t have that flexibility and can’t make the payment, you will be penalized.
“Pressure to meet repayments can force you into work straight after graduating, but flexibility gives you more freedom to explore your dream career.”
Do think about where you’ll be working after your MBA
While banks lend their native currency, Prodigy Finance gave Scott the choice of an MBA student loan in two currencies: US dollars or Euros (loans are also available in British Pounds for UK institutions).
Where you choose to study is closely linked to where you’ll end up working after graduating, so it’s worth considering this to avoid paying costly conversion fees.
Don’t let finance stand in the way of your dreams
Don’t let a ‘no’ from one provider hold you back. There are options available for those struggling to meet the financial demands. For Scott, Prodigy Finance opened opportunities many would have assumed were impossible.
“I know friends in the Philippines who want to do a master’s, but financial constraints are a problem,” he says.
“I wanted to do my MBA as soon as possible. When you finish, your value goes up and you have a chance to get a better salary and pay your loans off more quickly.
“Everyone says: ‘oh, you must be rich!’. And I say ‘no, there’s this amazing international loan provider and the process is very simple’. I try to share it with everyone.”