What is an MBA Loan?

MBA loans provide financial assistance to students who attend business school to receive a Master of Business Administration degree.

Types of MBA Loans
As with most college loans, there are two types of MBA loans: private and federal. Federal MBA loans, such as those offered by Sallie Mae, allow MBA students to finance the entire cost of business school by combining Stafford and Graduate PLUS loans. A Stafford loan has a lower interest rate and fewer fees than a Graduate PLUS loan. In general, borrowers must repay federal loans upon graduation from their MBA program.

If the combination of these two loan types fails to cover all of your business school expenses, you can opt for a private school loan to help cover the rest. Keep in mind that private education loans have a higher interest rate than federal loans.

How to Qualify for Federal MBA Loans
To be eligible to receive a federal MBA loan, an applicant must

  • be a U.S. citizen or permanent resident;
  • have a good credit score and debt repayment history;
  • be enrolled in school at least half time;
  • have never defaulted on a previous education loan;
  • complete a FAFSA (Free Application for Federal Student Aid).

Different MBA loans have different interest rates and terms, so it's wise to do some research and comparison shopping before signing the dotted line.