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How to avail loans and scholarship for IPM at IIMs?

Written by Ashish Ranjan, IPM 22-27 @ IIM Ranchi. Updated July 26, 2024.

Table of Contents

If you are here, you have probably secured an offer letter from a premiere institute (IIMs at Indore, Ranchi, Rohtak, Bodh Gaya, Jammu; NALSAR; IIFT Kakinada) to pursue an Integrated MBA. Congratulations! Now, these 5 years will be expensive. It is important to figure out your plan responsibly and early. 

What are you options? Without family wealth, you can finance them through easily-available education loans and harder-to-get scholarships. 

This blog aims to reduce the information asymmetry around both.

I have been fairly comprehensive, detailing everything you need to know before approaching the banks for a loan. Much of this article is based on my experience and research, though I have also talked to many of my batchmates and seniors across IPMs. Hence, it is indicative. Expect some differences when you go through the same process.

My qualification: I spent half a term at IIM Rohtak before withdrawing to go to IIM Ranchi (batch of 2022-27). Hence, I spent a bit more time exploring the dark, dark world of IPM financing than is advisable. I hope my experience helps make the process a little smoother and less stressful.

If you have a question not covered in this blog, reach out at [email protected] or find me on LinkedIn – we would love to hear from you! Also reach out if you spot any outdated information or inadvertent error. We would like to keep this blog relevant to future IPMers.

Financial Aid

IIM Indore

NBFA

IIM Indore provides Need-Based Financial Assistance based on family income and assets. The aid is divided into two categories:

  • If the family income is up to ₹4,50,000 and other assets criteria are met: The institute reimburses 100% of the interest accrued on the sum of money borrowed from the bank + concession in mess charges.
  • If the family income is between ₹4,50,001 and ₹12,00,000 and other assets criteria are met: The institute reimburses 50% of the interest accrued on the sum of money borrowed from the bank. 

See the assets criteria and other details (the detailed policy is hyperlinked as “NBFA Scheme”): https://www.iimidr.ac.in/academic-programmes/post-graduate-program-in-management/need-based-financial-assistance-nbfa/

Merit Award

If you receive the NBFA and your CGPA is in top 30% of the batch, you might also be eligible for a merit award. These awards are limited – typically only one seat for each year of IPM (UG). They are given during your convocation.

The amount is your entire annual tuition fees.

Some other scholarships and awards have been instituted or sponsored at Indore. But they are not yet available to IPM students during undergrad years.

IIM Rohtak

SC/ ST need-based scholarship

This scholarship is awarded by Ministry of HRD, Govt. of India, to the SC/ST students, based on the income declared by the student. Currently, there are 12 scholarships. The scholarship amount can go up to the amount of Tuition and certain other Fees. The selection is based on specific criteria and assessment by a committee.

Merit scholarships

IIM Rohtak offers some form of scholarship to “top 5 rank holders“ based on CGPA annually. This is usually a cash prize of ₹1,00,000 each to the top rankers of each batch.

IIM Ranchi

The newly-instituted Means-cum-Merit Scholarship sanctions ₹4 crores a year for 25 students across IIM Ranchi, including 9 seats for IPM (3 from each undergrad batch). SC, ST, and PwD candidates will get extra consideration in the application process.

The student needs to have a minimum of 7.50 CGPA and a maximum of 8 lakhs annual family income to be eligible for the same. 

3 IPM students from each batch are selected per term, and they receive a refund of ₹40,000 for that term (out of the total fees of ~₹1,80,000 per term). Effectively making it a 22% scholarship.

IIM Jammu

IIM Jammu offers up to 100% tuition fee waiver. The terms of this Merit-cum-Need Scholarship include:

  • Academic criteria: Minimum CGPA of 7.0 at the end of each term, without any D or F grade.
  • Economic criteria: Based on your gross annual family income (parents, self, and spouse)
    • below ₹3 lakh — 100% waiver
    • ₹3 lakh to ₹4 lakh — 50% waiver
    • ₹4 lakh to ₹5 lakh — 25% waiver
  • Up to 10% of the students in a batch can get this scholarship.

IIM Bodh Gaya

The Need-Based Financial Assistance (NBA) scheme allows up to a 100% waiver of tuition fees based on family income. Each case application is assessed individually in a two-step process. From the IPM Manual (p 29) of IIM Bodh Gaya:

In the first stage, the participant’s financial need will be assessed by evaluating the application submitted by the participants. In the second stage, based on stage I assessment, participants may be called for a personal interaction with the NBA Committee. Based on the evaluation at stages I and II, applicants will be provided financial aid.

NALSAR University of Law

A means-based scholarship at NALSAR offers the same provisions to IPM as NALSAR’s flagship BA-LLB. You can get a concession of 20% (annual family income between ₹7-8 lakh) to 100% (income below ₹3 lakh).

IIFT Kakinada

IIFT’s new Need-Based Scholarship Scheme (NBSS) is available this year onwards.

Up to 20% of the tuition fee will be refunded to selected students. If there are more applications than scholarships available, then lower income and higher CGPA will be prioritized.

  • Academic criteria: Minimum CGPA of 2.4/6.0 in the previous term.
  • Economic criteria: Based on your annual family income.
    • below ₹5 lakh —  20% refund (100% score)
    • ₹5 lakh to ₹6 lakh — 18% refund (90% score)
    • ₹6 lakh to ₹7 lakh — 16% refund (80% score)
    • ₹7 lakh to ₹8 lakh — 14% refund (70% score)
  • Up to 10% of the students in a batch can get this scholarship.
  • Must not have disciplinary action or scholarship from any other sources.

Government Schemes

National & State Scholarships

Central govt. ministries sponsor many schemes for SC/ST, OBC categories, and other classes. The National Scholarship Portal (NSP) is a one-stop solution for government scholarships.

Apart from this, different State Governments (most notably, MP’s MMVY scheme and Maharashtra) offer sizeable scholarships/student credit card schemes to eligible students. You can find details on this on the websites of governments of the state where you are domiciled. And talk to seniors with profiles similar to yours.

Find a brief of MP schemes here (compiled by Rahul Ohariya, IPM’26)

And the process is outlined here

  • MP has many schemes: Medhavi Vidyarthi (MMVY), Jankalyan Shiksha (MJSPY), Ladli Beti, etc. Get in touch with one of your seniors from MP to figure this out.
  • Under MMVY, you will have your entire tuition fees paid by the MP government, if you:
    • a) are domiciled in MP (your primary address on Aadhar and other documents),
    • b) have less than ₹6.5 lakh of annual income (as per self-declared tehsil income certificate),
    • and c) score above 70% in MP Board (or) 85% in CBSE/ICSE
  • This is applicable for any bachelor’s programme you join. If you get bachelor’s as well as master’s from the same place in an integrated programme (IPM, IPL, etc), the government will pay for all 5 years. 
  • Specific groups (such as women or ST candidates) have other schemes as well. Explore them if you are not eligible for MMVY.

There are also two lesser-known loan-related provisions based on the Indian Banks’ Association’s (IBA) Model Education Loan Scheme, 2023, a guideline for all education loans.

IBA Interest Concession

When any amount is disbursed, the bank starts charging a simple interest during the repayment holiday (5+1 years). You can do one of two things –– let this interest accrue (in which case it will be added to the principal amount, and you won’t need to pay anything for six years) OR keep servicing it. With the second option, one benefit is that the burden will be slightly lower when you repay the loan later. However, it may also make you eligible for 1% LESS interest rate. Since last year’s revision, the IBA has left this incentive to banks’ discretion. Check with your bank if they offer this.

Central Sector Interest Subsidy (CSIS) Scheme, 2009*

If your annual gross parental/family income is under ₹4.5 lakhs, you may be eligible for CSISS. The central government will fully pay the simple interest accrued (maximum of ₹10 lakhs) on your loan during the moratorium period (five-year course + one year). 

* However, students have been facing difficulty since last year in claiming CSISS for studying at IIMs. Check with your branch.

Private Scholarships

Some private charities (Sant Nirankari Mandal, Sikh Human Development Foundation, National Sikh Welfare Council, Swami Dayanand Education Foundation, Sitaram Jindal Foundation) and corporation trusts (IndusInd, Colgate, Tata, Reliance) also run monthly and annual cash scholarships. 

These are usually good for only small amounts (₹10,000-1,00,000 per annum, which is also rare) and can’t cover the humongous IPM fees entirely.

Further, most private sponsors stipulate that you cannot accept scholarships from any other parties if you take their money. Looking into foundations may also involve significant hassle and research. Even then, it isn’t easy to find worthwhile sponsors.

That said, if you can’t find any other means to finance your studies, do look into private scholarships so that, if nothing else, your loan burden is reduced and/or you have some money to spend during college years. 

There’s a lot of variety here, and many schemes are highly specific (like Sitaram Jindal Foundation Scholarship for Students in Bangalore).

Check out these websites and make a list of all schemes where you are eligible:

  1. https://vidyasaarathi.co.in/ (Government portal for CSR scholarships by corporates; most schemes are for first-years and have a ceiling for ₹10,000-50,000.)
  2. https://www.buddy4study.com/ (All major scholarships are listed here; you apply for almost all of them through B4S)
  3. https://www.vidhyaa.in/
  4. https://scholarshiparena.in

Some schemes worth checking out:

https://www.buddy4study.com/page/raman-kant-munjal-scholarships

https://rkmfoundation.org/Scholarships.aspx

  • Up to ₹5,50,000 per year
  • Duration: 3 years once selected!
  • Eligibility:
    • Enrolled in 1st year of BBA, BFIA, B.Com. (H, E), BMS, IPM, B.A. (Economics), BBS, BBI, BAF, B.Sc. (Statistics) or any other finance-related degree courses
    • Annual family income: <₹4 lakh
    • 10th & 12th — 80%+

Best possible scholarship for an IPMer. Their ceiling is set almost exactly to accommodate IPM fees.

https://www.buddy4study.com/page/the-tata-capital-pankh-scholarship-programme

  • Up to ₹12,000
  • Eligibility:
    • Enrolled in an undergraduate course
    • Previous class/year/semester — 60%+
    • Annual family income — <₹2.5 lakh

https://www.buddy4study.com/page/sbi-asha-scholarship-program

  • Up to ₹50,000
  • Duration: 1 year
  • Eligibility:
    • Any year of undergraduate at an NIRF Top 100 institute
    • 12th — 75%+
    • Annual family income — ₹6 lakh (preference to <₹3 lakh)
    • 50% reserved for women
  • The same foundation also offers up to ₹7.5 lakh a year to MBA students

https://scholarships.reliancefoundation.org/UG_Scholarship.aspx

  • Up to ₹2,00,00, total
  • Duration: Over the course of the programme
  • Aptitude Test is mandatory
  • Eligibility:
    • Enrolled in 1st year of any stream
    • 12th — 60%+
    • Annual household income — <₹15 lakh (preference to <₹2.5 lakh)

Baba Gurbachan Singh Scholarship Scheme 2024-25

  • Up to ₹50,000 per year
  • Deadline: November 30, 2024
  •  Eligibility
    • Pursuing BBA (or one of the other listed courses)
    • 12th — 60%+
    • Annual family income — <₹3.5 lakh

https://legrandscholarship.co.in/

  • General category: ₹60,000
  • Special category: ₹1,00,000
    • includes differently-abled, LGBTQ+, Covid-affected, and students with single parents or orphans across India
  • Eligibility:
    • 12th in 2023-24
    • Annual family income — <₹5 lakh
    • 10th % 12th:
      • General category: 70%+
      • Special category: 60%+

https://www.buddy4study.com/page/kotak-kanya-scholarship

  • Up to ₹1,50,000 per year
  • Duration: till completion of professional graduation course/degree
  • IMBA @ IIT Mandi students should also coonsider.
  • Eligibility:
    • Pursuing professional courses from institutes of repute
    • 12th — 75%+
    • Annual family income — ₹6 lakh

https://www.buddy4study.com/page/ugo-scholarship-program

  • Up to ₹60,000 a year
  • Duration: Up to the course of the programme
  • Eligibility:
    • Enrolled in any (except final) year of specified programs
    • IPM is listed in the application
    • 10th & 12th — 70%+
    • Annual household income — <₹5 lakh

https://www.buddy4study.com/page/bharti-airtel-scholarship

 * Students pursuing IMBA at IIT Mandi may be eligible for a full scholarship under ‘Data Sciences’ category of this scheme.

  • 100% of tuition, hostel & mess fees + one laptop
  • Duration: up to 5 years of the programme (if renewal criteria are met every year)
  • Once the Bharti Scholars graduate & are subsequently gainfully employed, they will undertake to voluntarily extend financial support to at least one student at a school or college level at any point in time, to the extent they can.
  • Girl students are encouraged to apply.
  • Eligibility:
    • Previous year or equivalent: 6 CGPA+
    • Attendance: 75%+
    • Annual family income: ₹8.5 lakh

https://www.buddy4study.com/page/online-degree-scholarship-support-programme

* IIM-B’s Online BBA-DBE is not listed yet, but might be soon.

  • Up to 15% refund for the first-semester fees
  • Eligibility:
    • Seeking to enrol in online undergraduate and postgraduate degrees at over 100 NAAC A+ accredited, NIRF-ranked, and UGC-approved universities in India

 https://www.buddy4study.com/page/mirae-asset-foundation-scholarship-program

  • Up to ₹40,000
  • Eligibility:
    • Open to all years of undergraduate
    • Previous academic year — 60%+
    • Annual family income — <₹8 lakh

Make sure you go through the eligibility criteria (annual income and documents) and the deadline for each scheme before applying.

Note that most (but not all) of these schemes are open to only first-year students. Be active on Buddy4Study to know whenever a scholarship starts accepting applications. 

Must stay on top of the deadlines. Apply for the schemes currently open, especially RKM Foundation. Do it before you report on campus. It gets hectic when you’re finally there!

Bank Loans

Collateral-free loans up to ₹7,50,000 can be availed for any institute in India. Most banks offer an amount beyond that for premiere colleges, like the IIMs.

Which bank should you approach? Private bank loans are too expensive (high-interest rates, unfavourable terms). Only public sector banks are sensible options. More on that later.

First, few key terms that you should be aware of as a future IPM student:

  1. Quatum: the principal amount for which the loan is availed.
  2. Collateral: the security against which the loan is acquired.
  3. Repayment Period: period within which the loan has to be repaid once the degree is completed (up to 15 years after moratorium period).
  4. Moratorium Period: the time during a loan term when the borrower is not required to make any repayment (12 months after completion of the course or 6 months after securing a job, whichever is earlier. Banks have the discretion to extend this period to 2 year for those who choose to build a startup.)
  5. MCLR (Marginal Cost of Fund Based Lending Rate): the minimum lending rate below which a bank is not permitted to lend

SBI Scholar Loan

Under the new Select Premier Institutions list, updated in May 2024, all IIMs (including Indore, Rohtak, Ranchi, Jammu, and Bodh Gaya) are in the AA category. Hence, SBI can sanction loans of up to ₹50 lakhs without any tangible collateral security for IPM students.
Current Interest Rate = Starting 8.05%

On the other hand, NALSAR University of Law and IIFT Kakinada (added this year) come under List B, which allows loans of up to ₹30 lakhs without tangible collateral security. 
Current Interest Rate = 9.15%

CBI Cent Vidyarthi Loan for IIMs

Central Bank of India offers collateral-free loans of up to ₹50 lakhs. Under this scheme’s special provision for premier management institutes, a 5-year integrated program at any IIM (including all IPMs and IPL at IIM Rohtak) is recognised under the AAA category.

Current Interest rate = 8.10%

  • CBI may also ask you to pay a life insurance premium in order to secure your loan. It will be a one-time thing (in my case, it amounted to ₹26,000).
  • NALSAR, IIFT Kakinada, and other institutes will come under the regular Cent Vidyarthi Scheme with different provisions and limits: https://www.centralbankofindia.co.in/en/cent-vidyarthi

Special Loan Scheme for SC Students (and others)

SC students can get up to ₹30 lakhs under a special scheme by the National Scheduled Castes Finance and Development Corporation. From their scheme brief:

  • For studies in India– NSFDC shall charge interest @ 2% per annum from the SCAs, which in turn, shall charge 6% per annum from the beneficiaries. In case of women beneficiaries, an interest rebate of 0.5% is provided.
  • https://nsfdc.nic.in/en/educational-loan-scheme
  • Similar schemes exist for the following: National Safai Karamcharis Finance and Development Corporation (NSKFDC), National Backward Classes Finance and Development Corporation (NBCFDC), National Scheduled Castes Finance and Development Corporation (NSCFDC),National Handicapped Finance and Development Corporation (NHFDC) under the Ministry of Social Justice and Empowerment and the National Scheduled Tribes Finance and Development Corporation (NSTFDC) under the Ministry of Tribal Affairs.

Determining Interest Rate

  • The interest rate on education loans is floating – i.e., it will change depending on the repo rate (set by the RBI).
  • The rate is tied to MCLR, which varies from bank to bank. In other words, there is a fixed premium component. Consider the rates at CBI and SBI in July 2024. 
  • CBI (AAA category) consists of two components: Repo Rate (6.50% now) + Credit Risk Premium (1.60%) = 8.10% presently.
  • SBI rates (List AA) are made up differently: External Benchmark Rate (9.15%) + Credit Risk Premium (0.05%) – Business Strategy Discount (1.05% to 1.15%) = 8.05% to 8.15% presently.
  • Judging by the economy, the rate will probably remain high for the time being. This will increase the simple interest paid or accrued over the next 6 years. In other words, the interest amount for a period is calculated based on the rates at that time.
  • Note that these rates are low for public sector banks (6-9%) and high for private banks (10-14%). Therefore, CBI and SBI are the two most sensible option.
  • Other banks with similar provisions: Union Bank, Punjab National Bank, and Canara Bank.

Loan Process

  1. The application process can start once the institution has sent the offer letter. You will need to approach the manager at the bank branch nearest you. If this is not possible, IIMs also provide contact details of the banks around their location. The only downside with approaching these branches is it may be difficult to understand nuances over the phone.
  2. Your manager will play a crucial role here since they are empowered to decide many terms of the loan offered to you. Additionally, a cooperative manager will make the process much smoother and faster. People I talked to have found folks at CBI branches across India to be generally more forthcoming.
  3. Once you have gone through everything with the manager, you will first need to open an account with this bank (if you don’t have one already). This step took up less than a day for me.
  4. Keep certain student documents (PAN, Aadhar, mark sheets, offer letter) and the parents (PAN, ITR, income statement, and others) handy. The complete List can be found on the bank website.
  5. Next, they will ask you to start a loan application on the Vidya Lakshmi Portal (VLP). You won’t need to fill every field, but try to keep the details accurate.
    • VLP will ask for a breakdown of the loan amount you need. At this stage, I went by Rohtak’s official fee structure and detailed only an amount of ₹36,02,500, whereas I was supposed to structure it so that the total hit ₹40,00,000 (the loan ceiling at the time). This cost me an extra day since the bank manager asked me to fill out a physical form where I entered many of the same fields as on VLP all over again.
  6. Now, you will be asked to sign documents and agreements with the bank. These essentially contain the terms of the loan (one being that the bank may retain a right to be repaid from your salary since that is the prospect based on which they have offered you the money.)
    • You may have to buy stamp papers.
    • If you’re eligible for the CSIS Scheme, the agreement for that will most likely also be signed at this step.
    • The bank also asked me for a “residential verification,” meaning a representative from a branch in Bihar (where I am domiciled) visited my house and took a selfie with a family member. As far as I know, this step doesn’t take place for everybody.
    • Depending on how quickly your branch manager moves, the loan will now be sanctioned. For me, it was a matter of roughly a day.
  7. Once the loan is processed and sanctioned, you will ask the bank to disburse the required amount.
    • On the payment gateway sent by the institution, there should be an option for NEFT/RTGS. This generates a Challan that you will send to the bank (via mail or personally to the manager.)
    • I hadn’t paid the Offer Acceptance Amount (OAA) of ₹ 1,00,000 to Rohtak yet, so I generated the Challan and sent it to the manager, who then transferred the money to IIM Rohtak via my account. Remember to ask the bank for payment proof (they sign and stamp that Challan and write a UTR No.)
    • If you have already paid the OAA or any other instalment, or if the loan process may take longer than the deadline, you can also get a reimbursement of the paid amount.

Personal Experience

  • Public sector banks should be preferred over Private sector banks because of the lower interest rate.
  • Check if your institute has ties with any banks. Availing loan from a bank the institute is connected with simplifies paperwork and document verification. (IIM Indore has ties with SBI Bank; IIM Rohtak with ICICI Bank; and IIM Ranchi with Central Bank + there is an on-campus ICICI branch.)
  • If your parents are already associated with a bank, they might make an effort to be more helpful, since they already know your financial history.
  • I went with CBI over SBI because of a marginally lower interest rate (0.05%) back then. This may be different currently. Plus, CBI employees seem to be generally (but not always) better informed about the loan provisions, more cooperative, and willing to find stuff out if they’re unaware. This may not always be the case, so visit your nearest branches of both CBI and SBI and get all the information.

Processing Time

The process has become much quicker than it was a few years ago. Most students are able to access the money within days (3 days in my case, including unnecessary delays). However, the kind of manager you get plays a major role. If they prioritise your case, you shouldn’t face any issues. 

Here’s an overview of how long it took me:

  • July 30 (Saturday) — Received offer letter via mail from IIM Rohtak
  • August 1, Afternoon — Went to banks; Filled account opening form at CBI
  • August 1, Evening — Received A/c No. from CBI, Applied on VLP
  • August 2 — Had to fill out a physical form due to an error in my VLP application; Loan in process
  • August 3, Afternoon — Loan approved/sanctioned
  • August 3, Evening — OAA disbursed

Additional FAQs

Many students exit with a bachelor’s and upgrade to other IIMs, ISB, XLRI, FMS, IIFT, IITs, and even go abroad for MBA. They face little to no issues with loan because banks are more than happy to have top IIM grads as their customers. 

Suppose you have spent 3 years (and ₹20 lakh) at IIM Indore. Now IIM Bangalore is calling you (hurray!) This is what you do:

  • Apply for a second loan of ₹50 lakh for IIM-B
  • Ask the bank to give you ₹20 lakh (ie, your IIM-I loan balance) from the IIM-B loan account
  • Pay off the first (IIM-I) loan and foreclose it (ie, settle before the full duration – this is free of charge)
  • Now, you have only one active loan account – for IIM-B. All your IIM-I debt has effectively been transferred here.

Both are fine. Bank branches near institutes process loans of many students, so they are already well-versed with the process

On the other hand, many home branches are more cooperative. Your family may also have existing relationships. Personally, I preferred my home branch because the manager was nice, cooperative, and efficient. They disburse my loan the same day whenever I ask.

If you can, definitely visit CBI and SBI branches near your home at least once to get all the information. If it seems like they are good at their job, go for it. That is the most important criteria – whether they are willing to find out the right information for you and whether they work fast.

Otherwise, your institute has probably sent a list of bank contacts in their city. Call and talk to them.

Collateral/margin: Absolutely not. Co-applicant: maybe.

The schemes for IIMs have special provisions. They are completely exempt from margin and collateral security (for loans up to 50 lakh for IIMs). 

SBI requires a co-applicant. At CBI, it is not mandatory; up to you. However, some branch managers like to be cautious. Hence, they insist on a joint borrower in your application. 

If they are not willing to budge on co-applicant, check with another branch. If all branches ask for it, it cannot be avoided.

However, it is not a reason to worry. Almost all students anyway provide a co-applicant because the process is built that way. A stronger application allows the bank to approve faster.

No. Typically, you start building your credit report once you get a PAN Card, credit cards, EMIs, or loans (which is usually after turning 18). So almost no student has a credit/CIBIL score.

Now, it would be preferable that your parents’ credit history is decent. That can help the approval move along faster. But it’s not necessary.

Banks are giving you this loan for going to a top-rated institute (such as an IIM). The basis for this is solely your employment prospects (“Very Good”). Hence, credit/CIBIL score will not affect your chances.

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