IOB Indian Overseas Bank Education Loan

7 minute read
IOB Education Loan

Are you planning to pursue higher studies and running short of funds to support your education and planning to take a loan? 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 and we hope it will help you. 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.

What is an Education Loan?

An education loan is a loan or a sum of money obtained by a person to pursue higher education in India or abroad. After the student completes their study, the loan payback begins, and students are allowed 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. That is, if you wish to begin playing during the moratorium period or after the moratorium period has ended. 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 has passed. 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

Everyone is eager to spend a lot of money on education in order to live a rich 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. Indian Overseas Bank offers education loans at affordable interest rates.

Determinants of Eligibility for IOB Education Loan

Students who wish to apply for IOB Education Loan must be aware of the eligibility criteria notified by the bank. Let’s have a look at the eligibility criteria given by the bank –

  • Applicants must be Indian citizens.
  • Applicants must have secured at least 60% in the last appeared exam for, XIIth or graduation.
  • Applicants must have secured admission in India or Abroad through a proper entrance test . Or the selection should have been merit based selection.
  • Applicants must not be employed.
  • Reputation of the college/university is often considered while providing loan, in cases where admission is not through entrance.

Compare Your Bank for Education Loan

Bank / Financer IOB SBI PNB AXIS
Applicable Rate of Interest Up to INR 7.5 Lacs: 10.70%Above INR 7.5 Lacs: 11.70%For vocational course: 11.70%For the wards of staff members: 10.40% Up to INR 7.50 Lacs: 10.55%Above INR 7.50 Lacs: 10.80% up to INR 7.5 Lacs: MCLR + 2.00%above INR 7.5 Lacs: 2.60% Upto 4 Lacs- 16.50%Upto 7.5 Lacs- 17.50%Above 7.5 Lacs- 15.50%
Max Loan with Collateral For India: INR 30 LacsFor Abroad: INR 40 Lacs For India: 10 LacsFor Abroad: 20 Lacs For India: 10 LacsFor Abroad: 20 Lacs For India: 10 LacsFor Abroad: 20 Lacs and beyond based requirement
Max loan without collateral For India: INR 30 LacsFor Abroad: INR 40 Lacs For India: 10 LacsFor Abroad: 20 Lacs For India: 10 LacsFor Abroad: 20 Lacs For India: 10 LacsFor Abroad: 20 Lacs and beyond based requirement
Processing Fee Nil Up to INR 4 Lacs: NilAbove INR 4 Lacs: INR 5000 Nil Nil

Expenses covered under Indian Overseas Bank Student Loan Scheme

The expenditures covered by the Indian Overseas Bank Student Loan Scheme are listed below.

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

Which courses and universities are eligible for the IOB Education Loan?

The Vidya Jyothi Educational program is open to colleges that have been recognized by Indian statutory agencies such as the UGC/GOVT/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 lakhs from the bank under this plan to fund their studies in India. The cost of studying overseas is INR 40 lakhs. The minimal amount a student can borrow in both circumstances is more than INR 7.5 lakhs. For studies in India, a student can borrow a maximum of INR 50 lakhs, while for studies overseas, a student can apply for a loan of up to INR 60 lakhs.

Also Read: 

Documents Required for IOB Education Loan

Applicants must have a list of documents while applying for education loan. We have listed the necessary documents below : 

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 Scheme Loan Amount Interest Charges
Vidya Jyoti For courses in India – Maximum Loan up to INR 30 lacs
For courses abroad: Maximum Loan Upto INR 4O Lacs
Up to ₹ 10,00,000 for studies at IITs, IIM’s, and ISB’s.

Also Read: 

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 percent, with a spread of 3.20 percent, resulting in a 10.05 percent effective rate of interest. Women candidates are eligible for a 0.50 percent discount.

Indian Overseas Bank 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.

Advantages of Indian Overseas Bank (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 required for up to 4 Lakhs
  • 0.50% concession for girl students


Now applicants might also want to know the repayment terms provided by IOB. Mentioned below is the Repayment Frequency of IOB Education Loan:

  • IOB provides quarterly or monthly rests for loan repayment.
  • 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 installment of the loan, the interest re‐payment starts.

Also Read: 

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
  • 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.
  • 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 mistake.

How to Avail the IOB Education Loan ?

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

For those who wish to avail of the loan through offline mode, they must follow the given steps. 

  • For availing 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
  • Applicants must enter the relevant details that are asked for then.
  • After completing the above mentioned steps, an Indian Overseas Bank executive will get in touch to process the request.

Also Read: 


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 may be obtained.

So, this was all about the IOB Education Loan. We hope you found this blog useful and it answered all your questions. For more such content stay connected with Leverage Edu!

Leave a Reply

Required fields are marked *



15,000+ students realised their study abroad dream with us. Take the first step today. Education Loan
Talk to an expert