MBA Student Loans: Comparing Online Loan Lenders to Traditional Banks

Student loans for an MBA program are different from those loans extended to undergrads. The many differences between the two generally stem from the fact an MBA loan is seen as more of an investment into a direct career path. It is easier for a lender to anticipate an MBA graduate's ability to repay the loan than an undergraduate's potential ability to repay. Because these loans are slightly less risky, some MBA students will opt to go with a simpler loan process offered online rather than meeting with a banker.

Online Lenders - Advantages

The main reason students will elect to work with an online lender is convenience. Many MBA students will even complete their education online. It is also possible you, as a student, are still maintaining employment and have little time to visit with financial aid counselors. Using an online lender will save you time because you do not have to meet someone in person.

Also, you can use technology to compare many lenders quickly, and you may even be able to sign the loan documents online with an electronic signature. If you want to avoid dressing in your business clothes to go meet with a banker, then using an online lender for your MBA loan is an attractive option.

Online Lenders - Disadvantages

The main reason some students opt for traditional banks over online lenders is more time and attention to detail in the loan process. If you know you will have questions about your loan and loan options, you will want to address those questions to a representative rather than looking them up in an online manual. Further, if you intend on negotiating your loan options, an online lender is not right for you. For many students, this will be the first time they have secured a loan completely independent of a family or parent support. Because some MBA loans can run as high as $200,000, failing to ask questions can be a critical error for future financial stability.

Searching for loans online can also compromise your identity. While most lenders' sites are secured, it is still possible your information can end up in the wrong hands. Additionally, if you are not sure who you are dealing with when you enter confidential information into a lender's website, you may find you have been scammed for your identity.

The Best Option for an MBA Loan

There is no "right" option for an MBA loan. However, students do tend to find more security in the short and long-run by going with a traditional bank for financing options. The only real reason to avoid a bank is if you are a financial expert with no questions and a superb credit history that makes negotiation unnecessary. Since this describes very few students, most will benefit from using a bank. Dedicating a few hours to locating the right loan is worth it considering you will be paying off the loan for the next 5 to 10 years.

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