In August 2019, PrepAdviser met Borislav Popov, Head of Strategic Development Individual Banking Division at Postbank, to discuss the value of MBA loans for professionals interested in global business education.
Recently, Postbank started offering а targeted consumer loan for business education worldwide, which is unique on the Bulgarian market. The loan may be used to pay tuition fees for various programs, such as Master of Business Administration, Executive Master of Business Administration, Advanced Management, etc. Discover more about the benefits of taking out MBA loans so that you can devise the most effective funding strategy for your studies.
How did you come up with the idea to create this type of product?
Nowadays, more and more people are looking for high quality education as they aim to expand their knowledge, qualification, and career prospects. This trend has led to growing interest from students needing to finance their business education and professional development plans. As we all know, such programs are expensive and sometimes it’s hard for students to find a way to cover tuition fees with their own funds. At Postbank our goal is to support customers to realize their ambitions and to provide them with tailor-made financial solutions. That’s why we created a special lending product, designed to fit all financial needs related to MBA education.
Does Postbank support its own employees for business education and management training in some way as part of the company’s HR Learning and Development strategy?
We know that the most important asset of any company is its people. So, yes, we do believe our employees are our future, and we actively invest in their further professional qualification through various educational programs and specialized internal trainings, digital self-training courses, etc.
How do business education loans differ from state-guaranteed education loans in Bulgaria?
The state-guaranteed education loan in Bulgaria covers full-time study in accredited Bulgarian universities. It provides funding only for higher education degrees. The government’s program is more suitable for recently graduated high school students. By way of contrast, our product is ideal for people with managerial experience, pursuing further development in their professional career. They could get funding for higher education programs or professional business qualification programs, provided by universities worldwide. The specific product parameters, such as pricing conditions, grace period, etc. are different as well.
How do business education loans differ from consumer or mortgage loans?
As a product specially designed for financing business education, it provides better terms to the clients, compared to a standard consumer loan. Among its features are: flexible loan disbursement, relaxed repayment options during the training period, lower interest rate and application fee. Furthermore, the bank transfers the respective amount directly to the university account along with an additional tax discount for international transfer. No additional collateral is required, such as mortgage, cash deposit or anything of this nature.
Can the loans be used for MBA and EMBA studies worldwide or are they limited to business schools in particular regions?
Our consumer loan for business education can be used to fund MBA, EMBA and other business programs all around the world.
MBA students can finance their studies using a variety of sources – earnings, savings, scholarships, employer sponsorship, etc. What is the advantage of using bank loans to support their funding strategy?
The main advantage of the bank loan is that the requested funding can be received easily and quickly at very attractive conditions. If students have their own savings, the bank loan continues to be a good option, because it gives them the freedom to keep their savings and to be able to cover unexpected expenses or other initiatives. Funding their MBA program is a good investment for managers who want to succeed in a highly competitive and rapidly changing global business environment.
What type of expenses does the loan cover – tuition fees, travel, living, study materials, international study trips, etc.?
The loan covers the amount necessary for tuition fees and provides an additional sum sufficient to cover travelling and everyday expenses according to the customer’s needs.
When can MBA prospects apply for a business education loan? Do they need to gain admission first or can they apply for the loan before that, so that they can plan their budget and the caliber of MBA programs to target?
We aim to provide the best customer journey, so we give clients the option of applying for early pre-approval of the loan. If they have already been admitted to B-school they can apply for the loan and then get notified if it has been approved within just a few hours. Upon disbursement, the client has to provide the bank with a formal admission letter and a signed training agreement. This way the funding is approved in advance and our customer has the opportunity to choose the most appropriate training program.
Is there a difference in the terms and conditions of the loan depending on the type of business education program and its format – full-time, one- or two-year MBA, part-time MBA, Executive MBA?
There are no differences in the terms and conditions of the loan, regardless of the type, or the format, of the business program. Only the grace period depends on the duration of the training program.
Borislav Popov is Head of Strategic Development Individual Banking Division at Postbank. He has over 20 years of experience in banking, a Master’s degree in Finance with a Banking Profile from the Academy of Economics “D. Tsenov”, and EMBA from COTRUGLI Business School.