Education Loan

Indian Overseas Bank Education Loan for India and Abroad

Indian Overseas Bank Education Loan for India and Abroad

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Know about Indian Overseas Bank education loan schemes for abroad and in India. GyanDhan’s blog will update you on IOB interest rates, and documents required for IOB education loans.

GyanDhan
vishakha Bhagia
Updated on:  06 Mar 2024  | Reviewed By: 
Aman 
| 13.2K | 9  min read


To alleviate the burden of aspiring students planning to pursue higher education in India or abroad, the Indian Overseas Bank (IOB) offers education loan schemes. The Indian Overseas Bank has three education loan schemes to help students finance their higher education, namely - the Vidya Jyoti Education Loan, IOB Vidya Shrest, and IOB Scholar Education Loan.

  • list items Vidya Jyoti Education Loan: This loan covers various educational expenses, for students pursuing professional/technical courses in India and abroad.  
  • list items IOB Scholar Education Loan: This education loan is designed for students pursuing higher education in India & abroad other than loans covered under the IBA model scheme.  
  • list items IOB Vidya Shrest: This education loan scheme aims at providing term loans to students for pursuing higher education in premier institutions in India’s best engineering and medical colleges, top B-schools, law colleges & other reputed institutions. Top colleges are divided into categories A & B.
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Overview of Indian Overseas Bank education loan schemes

 

Loan amount

India - INR 30 Lakh
Abroad - INR 40 Lakh

India - INR 50 Lakh

Abroad - INR 60 Lakh

Upto INR 30 Lakh
(with collateral)
Upto INR 15 Lakh
(without collateral)

Interest rates

12.55%

11.55% - 12.55%

11.05%

Margin Money

For studies in India - 5%

For studies abroad - 15%

25%

Nil

Repayment tenure

15 years

15 years

-

Moratorium period

Course duration + 1 year

Course duration + 1 year

Course duration + 1 year

 

Check Your Education Loan Eligibility

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Eligibility criteria for IOB education loan 

Eligibility criteria for the Vidya Jyoti Education Loan Scheme are as follows

  • list items The student should have secured admission to a recognized higher education course in India should be obtained through an entrance test/merit-based selection process.  
  • list items In states where a Common Entrance Test (CET) is not available, the applicant must achieve a minimum of 60% for others and 55% for SC/ST students in the qualifying examination as a cut-off.  
  • list items If there is no Common Entrance Test (CET) for securing admission to post-graduate courses/research programs, the criteria should be based on the employment opportunities and reputation of the institution concerned.  
  • list items The student should not be engaged in any employment.


Eligibility criteria for the IOB Scholar Education Loan Scheme are as follows

  • list items Students should have secured a minimum of 60% for general & 55% for SC/ST in the plus two or its equivalent examination approved by the Government of India.
  • list items Students who wish to pursue vocational training and skill development courses that are not covered under the IBA Model Scheme (VJEL) are also eligible for this loan.
  • list items This loan scheme also covers students pursuing any other course that offers employment upon completion.

Please note that the loan amount for students falling under these categories may exceed the eligibility limits set by the IBA Model Scheme, provided they meet the eligibility criteria specified for this scheme.

Eligibility criteria for the IOB Vidya Shrest Education Loan Scheme are as follows
 

  • list items The student should be an Indian national and must have secured admission to the select premier institutions.  
  • list items This scheme covers regular full-time degree/diploma courses that require an entrance test/selection process for admission. Executive management Courses such as PGPX are also included in this scheme.
  • list items Certificate/part-time courses are not eligible for coverage under this scheme.

 

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Key points to remember for IOB education loan 

Feature Description

Processing fees

The processing fee charged by IOB ranges from 0.5% - 2% of the loan amount.

Repayment during study

Repayment is optional, the accumulated interest will be added to the principal loan amount. 

Co-applicant

Co-applicants can be parents, legal guardians, siblings, or spouses.

IOB education loan insurance

IOB loan insurance provides protection in the event of the applicant's disability or death, the co-applicant is not burdened with repaying the entire loan amount.

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Documents required for Indian Overseas Bank education loan

Applicants documents

  • list items Identity proof: PAN/ Passport/ Driver’s License/ Voter ID card or government-issued identification document
  • list items Education loan application form
  • list items Address proof: recent copy of telephone bill/ electricity bill/water bill/ piped gas bill/ Driving license/ Aadhaar card
  • list items Passport
  • list items Past academic record
  • list items 10th standard mark sheet
  • list items 12th standard mark sheet
  • list items Undergraduate result (semester-wise)
  • list items Entrance exam results (e.g. GMAT, GRE, TOEFL, etc.)
  • list items Proof of admission: admission letter (A conditional admission letter is also applicable).
  • list items Statement of expenses
  • list items 2 passport-size photographs
  • list items Loan A/C statement of one year (if applicable)
  • list items Bank account statement of the student (if applicable)  

Co-applicant’s documents

  • list items Identity proof: PAN/ Passport/ Driver’s license/ Voter ID card or government-issued identification document
  • list items Address proof: recent copy of telephone bill/ electricity, water, piped gas bill or copy of Driving license/ Aadhaar card
  • list items 2 passport-size photographs
  • list items Co-borrower’s bank account statement for the last 6 months
  • list items In case of another ongoing loan, then the loan A/C statement of 1 year

 

Income proof for salaried co-applicant/guarantor

  • list items Salary slips for the last 3 months
  • list items Copy of Form 16 of the last 2 years or copy
  • list items Bank account statement for the last 6 months (Salary account)
  • list items A brief statement of assets & liabilities of parent/ guardian/ other co-borrower


Income proof for self-employed co-applicant/guarantor

  • list items Business address proof
  • list items Last 2 years IT returns ( If IT Payee)
  • list items TDS certificate (Form 16A, if applicable)
  • list items Certificate of qualification (for C.A./ doctor and other professionals)
  • list items Brief statement of assets & liabilities of parent/ guardian/ other co-borrower
  • list items Bank account statement for the last 6 months
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Repayment of IOB education loan

After the moratorium period is over the students are required to pay the EMI. During the moratorium period, students are required to pay simple interest. If students do not pay simple interest during the moratorium, the collective interest is added to the EMI. Indian Overseas Bank offers three methods for repaying education loans.

  • list items Standing Instruction (SI): If you have an existing account with IOB, SI is the most convenient option. Your monthly EMI amount will be automatically deducted from your designated IOB account at the end of each month.  
  • list items Post-Dated Cheques (PDCs): If you don't have an IOB account, you can provide post-dated EMI checks from a non-IOB account holder at the nearest IOB Loan Center. However, please note that PDCs are accepted only at non-ECS locations, and you must promptly submit a new set of PDCs when required.

 

  • list items Electronic Clearing Service (ECS): If you have a non-IOB account and prefer automatic debits for your EMIs, you can opt for the Electronic Clearing Service (ECS). This service will deduct your EMI amount from your non-IOB account at the end of each monthly cycle.

 

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How to apply for an IOB education loan?

To apply for an IOB education loan, you can apply online or offline mode.

  • list items IOB education loan application offline mode Go to the nearest branch of an Indian Overseas Bank and inquire about their education loan options. Based on your eligibility and specific requirements, choose an appropriate loan product and complete the application form. Obtain the list of necessary documents to initiate the loan processing. Make a second visit to the bank to submit all the required documents and start the loan processing procedure.  
  • list items Go to the nearest branch of an Indian Overseas Bank and inquire about their education loan options.
  • list items Based on your eligibility and specific requirements, choose an appropriate loan product and complete the application form.
  • list items Obtain the list of necessary documents to initiate the loan processing.
  • list items Make a second visit to the bank to submit all the required documents and start the loan processing procedure.  
  • list items IOB education loan application online mode To secure an IOB education loan you have to apply at the VidyaLakshmi portal. Submit the required documents The bank will review and approve or deny the loan application after reviewing the student's profile and documents.
  • list items To secure an IOB education loan you have to apply at the VidyaLakshmi portal.
  • list items Submit the required documents
  • list items The bank will review and approve or deny the loan application after reviewing the student's profile and documents.

 

Various lenders provide a range of education loan schemes with different features and benefits. Students are bound to get confused. To sail through the confusion without making a wrong move, contact GyanDhan. Apart from partnering up with several of the lenders in the market, we can offer an unbiased opinion on the loan products as our executives are thoroughly acquainted with them. Not only that, GyanDhan offers all these services, and more, absolutely free of cost to the students. Floored by the many services offered and want to apply for a loan? Just start by checking your education loan eligibility and start the process!

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Frequently asked questions

Will the entire loan amount be disbursed at once in the Indian overseas bank?

No, the entire loan amount is not disbursed at once. The disbursement is released as per requirement. The bank disburses the tuition fee directly into the university’s account and the rest is disbursed directly in the student’s account. 

What is the minimum loan amount I can get from the Indian Overseas Bank?

The loan amount you can get from the Indian overseas bank for abroad education is INR 7.5 Lakh to INR 60 Lakh. For education in India, the Indian Overseas Bank provides INR 4 Lakh to INR 50 Lakh.

Will the Indian Overseas Bank abroad education loan include travel expenses?

Yes, the Indian Overseas Bank education loan covers tuition fee, examination fee, library/laboratory fee, travel expenses, cost of accommodation, cost of books, equipment, instruments, or uniforms, and miscellaneous expenses - study tours, project work, thesis, etc.

What is the loan margin provided by IOB?

Margin money refers to the portion of the total educational expenses that the borrower needs to bear themselves, while the remaining portion is financed by the banks. For abroad IOB education loan margin money is 15% and for domestic IOB education loan margin money is nil.

Is there any concession or benefit available if I choose to pay the interest during the repayment holiday period?

Yes, if you pay the interest amount during the moratorium/holiday period, then you are eligible for a 1% concession on the interest rate.

If the student is not able to complete the course within the scheduled time, is there any extension available?

Yes, if a student cannot complete the course within the designated timeframe, an extension of up to two years may be granted for the completion of the course.

What is the disbursement process of IOB?

Once the students have received the sanction letter and have submitted the disbursement-related documents, the loan amount will be released in stages as per the requirement of the university in an Indian overseas bank.

Check Your Education Loan Eligibility


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