IOB Indian Overseas Bank Education Loan

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IOB Education Loan

Are you planning to pursue higher studies and running short of funds to support your education? Planning to take a loan for this purpose? Well, worry not in that case, because banks in India have designed various schemes to benefit students who wish to pursue higher studies in India as well as abroad. In this blog, you shall get to know about the Indian Overseas Bank (IOB) Education Loan. Indian Overseas Bank offers Vidya Jyoti Education Loan Scheme to applicants who wish to pursue undergrad, postgrad, or diploma courses in India or abroad from any recognized university.

To know more about Indian Overseas Bank (IOB) education loans, keep on reading further!

What is an Education Loan?

An education loan is a sum of money obtained by a student to pursue higher education in India or abroad. After the student completes their study, the loan payback begins, and students are given a grace period of six months to find or join a job.

Your choice of interest will impact the payback amount; you must pick how you wish to repay the loan – whether you wish to begin paying during the moratorium period or after the moratorium period. The Moratorium term is equal to the length of your schooling plus six months or a year to find work. You are only required to repay the loan when this period gets completed. The loan interest begins to accrue at the time of disbursement of money, so by the time you graduate, you will owe a large sum. The other option is for your parents or guardians to begin paying the debt while it is still in the moratorium period.

What is IOB Education Loan?

Indian Overseas Bank (IOB) Education Loan

A lot of people are eager to spend a lot of money on education in order to live a fruitful life in the future. Indian Overseas Bank (IOB), being one of the largest education loan providers, understands the needs of students and provides highly competitive education loans with lower interest rates. Every year, Indian Overseas Bank (IOB) education loans help a huge number of students get admission to renowned institutions and colleges in India and abroad.

Individuals who want to pursue a Diploma, Graduation, or Post-Graduation program at a recognized university can apply for an Indian Overseas Bank Vidya Jyoti education loan. The loan is also available to people who want to do technical or professional courses in another country.

Eligibility for Indian Overseas Bank (IOB) Education Loan

Students who wish to apply for Indian Overseas Bank (IOB) Education Loan must meet the following eligibility criteria of the bank –

  • Applicants must be Indian citizens.
  • Applicants must have secured at least 60% in the last appeared exam – 12th or graduation.
  • Applicants must have secured admission in India or Abroad through a proper entrance test or on the basis of merit.
  • Applicants must not be employed.
  • The reputation of the college/university is often considered while providing loans, in cases where admission is not through the entrance.
Indian Overseas Bank (IOB) Education Loan

Compare Your Bank for Education Loan

Let’s check out a fair comparison between banks for education loans.

Applicable Rate of InterestUp to INR 7.5 Lakh: 10.70%
Above INR 7.5 Lakh: 11.70%
For vocational courses: 11.70%
For the wards of staff members: 10.40%
Up to INR 7.50 Lakh: 10.55%
Above INR 7.50 Lakh: 10.80%
Up to INR 7.5 Lakh: MCLR + 2.00%
Above INR 7.5 Lakh: 2.60%
Up to INR 4 Lakh- 16.50%
Up to 7.5 Lakh- 17.50%
Above 7.5 Lakh- 15.50%
Max Loan with CollateralFor India: INR 30 Lakh
For Abroad: INR 40 Lakh
For India: 10 Lakh
For Abroad: 20 Lakh
For India: 10 Lakh
For Abroad: 20 Lakh
For India: INR10 Lakh
For Abroad: INR 20 Lakh and beyond based on the requirement
Max loan without collateralFor India: INR 30 Lakh
For Abroad: INR 40 Lakh
For India: 10 Lakh
For Abroad: 20 Lakh
For India: 10 Lakh
For Abroad: 20 Lakh
For India: 10 Lakh
For Abroad: 20 Lakh and beyond, based on the requirement
Processing FeeNILUp to INR 4 Lakh: Nil
Above INR 4 Lakh: INR 5000

Expenses Covered under Indian Overseas Bank Student (IOB) Education Loan Scheme

Indian Overseas Bank (IOB) Education Loan

The expenditures covered by the Indian Overseas Bank (IOB) Education Loan Scheme are listed below:

  • Tuition/ college/ hostel fee
  • Examination/ lab/ library fee
  • Books/uniforms/ instruments
  • Caution deposit
  • Passage money for studies abroad, etc

Type of Courses and Universities Eligible for IOB Education Loan

The Vidya Jyothi Educational program is open to colleges that have been recognized by Indian statutory agencies such as the UGC/AICTE/AIBMS/ICMR. However, the system excludes vocational/skill development courses, PG diplomas, and courses taken at an online university.

Loan Amount and Margin Money Possible Under IOB Education Loan to Study Abroad

Students can borrow up to INR 30 lakh from the bank under this plan to fund their studies in India. The cost of studying overseas is INR 40 lakh. The minimal amount a student can borrow in both circumstances is more than INR 7.5 lakh. For studies in India, a student can borrow a maximum of INR 50 lakhs, while for studying overseas, a student can apply for a loan of up to INR 60 lakh.

Also Read: The PNB Education Loan Program

Documents Required for IOB Education Loan

Applicants must have the following documents for an education loan application: 

  • The loan application form from the bank is to be filled
  • Two passport-size photos
  • Proof of age
  • Offer Letter from the University
  • Proof of residence
  • The Marksheet of the last exam appeared for
  • Co-borrowers’ statement of assets and liabilities
  • Scholarship letter, if present
  • Documents supporting the financial status
  • Collateral documents
  • Entrance exam results

Also Read: Education Loan without Collateral

Loan Schemes of IOB

IOB does not provide multiple loan schemes for education. The most popular one has been mentioned below:

Loan SchemeLoan AmountInterest Charges
Vidya JyotiFor Courses in India – Maximum Loan up to INR 30 lacs
For Courses abroad: Maximum Loan Upto INR 40 Lacs
Up to INR 10,00,000 for studies at IITs, IIMs, and ISBs.

IOB Education Loan Interest Rate

The bank’s interest rate is RLLR + Spread (Repo Connected Lending Rate + Spread), which means it is linked to the RBI’s repo rate. The RLLR (w.e.f. 1.07.2020) is 6.85 per cent, with a spread of 3.20 per cent, resulting in a 10.05 per cent effective rate of interest. Women candidates are eligible for a 0.50 per cent discount.

Also Read: Allahabad Bank Education Loan, Canara Bank Education Loan and IDBI Education Loan.

IOB Education Loan Calculator

To figure out how much you’ll have to pay each month, utilize the Indian Overseas Bank Loan EMI calculator. The calculator is simple to use, and the results are displayed immediately. Basic information such as the processing fee, interest rate, loan amount, and tenure must be entered to compute the EMI.

Indian Overseas Bank (IOB) Education Loan

Advantages of IOB Education Loan

Some of the benefits of applying for an educational loan with Indian Overseas Bank are listed below (IOB).

  • Low-interest rate
  • No hidden costs and administrative charges.
  • Less paperwork
  • No processing fees
  • No security is required for up to 4 Lakh.
  • 0.50% concession for girl students.

IOB Education Loan Repayment 

Going through repayment terms is a very important thing to do while taking up a loan. Mentioned below is the repayment Frequency of the Indian Overseas Bank (IOB) Education Loan:

  • IOB provides quarterly or monthly rests for loan repayment.
  • The repayment period starts 1 year after the completion of the course or six months after getting a job, whichever happens before.
  • After disbursement of the first instalment of the loan, the interest re‐payment starts.

Also Read: Education Loan for MBA

EMI Payment Methods

Education loans from the Indian Overseas Bank (IOB) can be repaid in three ways.

  • Standing Instruction (SI): If you already have an account with Indian Overseas Bank (IOB), standing instruction is the ideal way to pay back your debt. At the conclusion of each monthly cycle, your EMI payment will be automatically deducted from the Indian Overseas Bank (IOB) account you designate.
  • Electronic Clearing Service (ECS). If you have a non-Indian Overseas Bank (IOB) account and would want your EMIs to be deducted automatically at the end of the monthly cycle, you can use the electronic clearing service in which your periodic payments are automatically deducted from the bank account.
  • Post-Dated Cheques (PDCs): Post-dated EMI checks from a non-Indian Overseas Bank (IOB) account can be sent to your local Indian Overseas Bank (IOB) Loan Centre. A new set of PDCs will need to be submitted as soon as possible. Please note that only non-ECS locations will be accepted for Post Dated Cheques.
  • SI/ECS payment method: It is advised that you utilise either the SI or ECS form of payment rather than PDCs since they are speedier and less prone to mistakes.
Indian Overseas Bank (IOB) Education Loan

How to Avail of IOB Education Loan?

IOB Education Loan can be applied for, both in offline and online mode.

For those who wish to avail of the Indian Overseas Bank (IOB) Education loan through offline mode, need to follow the given steps: 

  • For availing of the IOB Education Loan, applicants must make sure they know all the requisites beforehand.
  • They can go to their nearest bank branches and collect the application form.
  • The complete application form must be submitted along with all the documents asked for.
  • Applicants must patiently wait for the verification process.

Applicants who wish to apply online should follow the steps given below:

  • Applicants must log on to the official website of Indian Overseas Bank.
  • After logging in applicants must click on ‘Educational Loan – Vidyajyoti’, under the ‘Retail’ section. 
  • After which they are requested to click on www.vidyalakshmi.com.
  • Applicants must enter the relevant details that are asked for.
  • After completing the above-mentioned steps, an Indian Overseas Bank executive will get in touch to process the request.

Also Read:  Here are the Best Education Loans for MBBS Students!


What is the minimum loan amount that can be availed?

The minimum loan amount is Rs. 7.50 lakh.

What is the loan margin provided by IOB?

The margin of the loan for studies abroad is 15% and studies in India is 5%.

Are extensions provided in case a student cannot complete the course within the scheduled time?

Yes, an extension period of up to 2 years is provided in such a case.

Is the RLLR or MCLR used to calculate the interest rate on college loans?

The RLLR affects the interest rate on student loans.

What is the smallest amount of money that can be borrowed?

A loan of Rs. 7.50 lakh is the least amount that can be borrowed.

Planning to study abroad? We at Leverage Edu are all about helping students to realize this dream which can open the door to many career opportunities. To get assistance in your application process, just register on our website or call us at 1800-572-000.

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