Indian Overseas Bank Education Loan Rate of Interest
No joint-borrowers are required for education loan schemes under IOB for a loan up to INR 4 Lacs.
- The repayment period of IOB ranges between 5-7 years.
- No foreclosure penalty
- Special interest rates for the wards of staff members.
The interest rates are in accordance with the RBI guidelines.
- The RoI for a loan up to INR 7.5 Lacs is 10.70%.
- The RoI for a loan above INR 7.5 Lacs is 11.70%.
- The RoI for vocational courses is 11.70%.
- The RoI for the wards of staff members is 10.40%.
CALCULATE YOUR EDUCATION LOAN EMI
1,000 per month
1,000
1,000
Looking for admission for India and Abroad?
Indian Overseas Bank Education Loan Eligibility
- Indian National. The student should be a citizen of India or hold the passport of India.
- Age. There is no age limit.
- 10+2. The student should have cleared 10+2 from a recognized school with essential grades.
- Co-signer. A co-signer is necessary for a loan above INR 4 Lacs.
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| Bank / Financer |  Change bank |  Change bank |  Change bank |  Change bank |  Change bank |
| 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 Lacs For Abroad: INR 40 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs and beyond based requirement | |
| Max loan without collateral | For India: INR 30 Lacs For Abroad: INR 40 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs | For India: 10 Lacs For Abroad: 20 Lacs and beyond based requirement | |
| Processing Fee | Nil | Up to INR 4 Lacs: Nil Above INR 4 Lacs: INR 5000 | Nil | Nil | |
| Repayment Period | 5-7 Years | 15 years | 15 years | 7 years | |
| Loan for top institutions | No | Yes, SBI Scholar Loan Scheme | Yes, PNB Pratibha | No | |
| Margin | Up to 4 Lacs: No margin Above 4 Lacs: For India-5% For Abroad-15% | For loan above INR 4 Lacs In India: 5% In abroad: 15% | Up to INR 4 Lacs - NIL Above INR 4 Lacs - 5% | Upto loan 4 Lacs: No margin Above 4 Lacs: for India: 5% for Abroad: 15% | |
| Age Limit | No age criteria | no age limit | No age limit | No | |
| Loan Security | Up to INR 4 Lacs:No collateral or security for a loan. Between INR 4-7.5 Lacs: Third party guarantee Above INR 7.5 Lacs:Bank deposits in the name of applicant, parent/guardian or any other third party | Upto 7.50 Lacs: Only Parent/ Guardian as co-borrower. No Collateral Security or third party guarantee Above INR 7.50 Lacs: Tangible security along with parents as co borrower | Upto INR 7.50 Lacs: Parent(s)/guardian be made joint borrower (s). No tangible Security and /or 3rd party guarantee is required. Above INR 7.50 Lacs: Parent(s)/guardian be joint borrower(s). Tangible collateral security of suitable value acceptable to bank. | Third party guarantee Collateral security Additionally, assignment of LIC policy in favor of bank amounting 100% of education loan amount Assignment of Future salaries in favor of Axis Bank | |
| Eligibility concession for SC/ST | No | No | 50% for SC/ST, and;60% for General category. | No | |
| Processing Time | N.A | 20 days | 15 days | 14 Days | |
| Prepayment charges | Nil | Nil | Nil | Nil | |
| Penal charges | Nil | Penal interest @ 2% to be charged for loans above Rs.4 lacs for the overdue amount and overdue period | Nil | @ 2% per month on the overdue installment/s | |
| Mandatory insurance cover | Yes | Yes | yes | yes | |
| Travel expeneses | Yes | yes | yes | yes | |
| Bank transfter allowance | No such clause mention | available | available | No such clause mentioned | |
| Top up loan availability | Unavailable | yes | available | unavailable | |
| Interest Subsidy Schemes | Skill Loan Scheme CSIS Padho Pradesh | Padho Pardesh CSIS Skill Loan Scheme | Padho Pardesh CSIS Skill Loan Scheme | CSIS | |
| Tax benifit | Yes | yes | yes | yes | |
| Concession/benefits | No collateral or security for loan upto INR 4 Lacs No Processing charges applied No foreclosure penalty charged Easy Documentation and faster processing Interest concession and interest rebate are provided subject to terms and conditions Joint borrowers are not required for these student loans upto INR 4 lakh | Concession to girl students 1% concession if interest is serviced during moratorium period including course period | 0.5% concession to girl students 0.5% concession if interest is serviced during moratorium period including course period Online application | There is no processing fee charged No pre- payment charges are applied No pre- closure charges are applied Loan Disbursal period is 15 working days from the date of final submission of documents |
How to apply for Indian Overseas Bank Education Loan ?
Indian Overseas Bank Education loan application form can be available online or offline at Bank branches.
Visit the official website for the Indian Overseas Bank.
Select the education loan scheme and click on Apply Now.
Fill out the form with essential details.
Upload the mandatory documents required.
Submit the form and take out a print out of the application.
Visit the bank branch for further formalities.
Applicants can directly visit the nearest branch and ask for an application form. The bank representative will then guide them with all the necessary information regarding eligibility, documents required and also which loan is best suitable.
Indian Overseas Bank Education Loan Details
For Abroad: INR 40 Lacs
Above 4 Lacs:
For India: 5%
For Abroad: 15%
Between INR 4-7.5 Lacs: Third party guarantee along with co-obligation of the parents for loan.
Above INR 7.5 Lacs:Immovable properties and bank deposits in the name of applicant, parent/guardian or any other third party with a suitable margin
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Expenses covered under Indian Overseas Bank Student Loan Scheme
- Tuition/ college/ hostel fee
- Examination/ lab/ library fee
- Books/ uniform/ instruments
- Caution deposit
- Passage money for studies abroad, etc
Courses Covered Under Indian Overseas Bank Student Loan Scheme
In India
Graduation/Post Graduation/Diploma/Computer education in any recognized State/Central Government/University
Professional Courses such as Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management
Courses offered by Institutes viz. IIM, IIT, IISc, XLRI, NIFT, etc.
Computer Certificate courses offered by institutes accredited to the department of electronics or institutes affiliated to renowned universities.
Degree or Diploma courses like Aeronautical, Pilot Training, Shipping and alike approved by Director General of Civil Aviation/ Shipping
Courses that are offered by reputed foreign universities in India
Professional courses like ICWA, CA, CFA, etc.
Reputed foreign universities/Evening courses of approved institutes.
Courses Covered Under Indian Overseas Bank Student Loan Scheme
In Abroad
Job oriented professional/ technical courses at graduation level offered by reputed universities abroad.
Post-Graduation courses in any discipline from reputed universities.
The course should not lead to a diploma
Pilot Training, Shipping, aeronautical training from an institute recognized by the competent local aviation/ shipping authority
Education Loan Documents Required ?
Admission letter along with fee structure, mark sheets, etc.
Attested copies of Passport, Voter's ID, Driving Licence or PAN Card
Two recent passport size photographs of applicant, co-applicant, and guarantor
Marksheet of recently qualified public exam for school, college in India
Latest salary slip, Form 16 and recent salary certificate (if salaried)
Details of admission proof
Schedule of expenses for the course.
Copy of passport and visa for abroad courses
Interest Subsidy Schemes
Skill Loan Scheme
The bank offers Skill Loan Scheme for students who aspire to gain knowledge and specialized training in one specific field.
Central Scheme of Interest Subsidy (CSIS)
Formulated by the Govt. of India, a scheme to assist the students belonging to the economically weaker section.
Padho Pardesh
IOB Padho Pardesh scheme founded under the initiative of Prime Ministers new 15 point programme to benefit the minority community.
Frequently Asked Questions
What schemes does Indian Overseas Bank considers for its education loans?
+ -There are multiple other schemes offered by Indian Overseas Bank apart from the basic education loans. These are:
- IOB Vocational Education and Training
- IOB Career Dreams
- IOB Scholar
In whose name is the loan granted?
+ -The loan is granted in the name of the student
Is the loan contract executed only in student's name?
+ -No, the loan can be executed both in name of student and co-borrower as both are equally responsible for repayment of loan.
What is the age limit for availing loan in Indian Overseas Bank?
+ -There is no age restriction for the applicant applying for education loan from Indian Overseas Bank. He/ she should only meet the other stated eligibility criteria's.
Are minors eligible to apply for Indian Overseas Bank Education Loan?
+ -Yes, Minors aspiring for further studies can apply for education loan with help of legal representation from parents/ guardians.
What does margin on any loan mean?
+ -Margin amount is the amount that a borrower has to pay through his/ her own sources in form of a down payment as his/ her contribution towards the education.
Should the student's margin be paid upfront in the starting?
+ -Margin can be paid on a year to year pro rata basis whenever bank disburses loan amount as per requirement.
Where can I avail Indian Overseas Bank Education Loan?
+ -You can either contact your nearest branch for the application form or details regarding the loan or apply online from the official website.
Is there any provision to apply for loan online?
+ -Yes, you can apply online through Vidyalakshmi portal to avail for this loan.
Can I view my loan statement online if I am an existing education loan borrower?
+ -Yes, by creating a login on Indian Overseas Bank web portal, you can view all details related to education loan online.
Is there any minimum aggregate marks to meet the eligibility criteria to avail Indian Overseas Bank education loan?
+ -Yes, a student must have secured a minimum aggregate marks in their last qualifying examination (10+2 or Graduation). Relaxation in the marks is given to SC/ ST students
What is the discount/ rebate offered by Indian Overseas Bank?
+ -- 0.50% concession is given to girl students
- 1% concession is given if the interest is serviced during moratorium period
- Eligibility criteria and margin on education loan is relaxed for SC/ST students
What all is included in tangible collateral security?
+ -Mostly Indian Overseas Bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Indian Overseas Bank. Tangible security includes documents related to land/ building/ government security/ public sector bonds/ units of UTI, NSC, Life insurance policy/ bank deposits/ shares or debentures. The value of the security should be equal to the education loan amount.
Is scholarship or assistantship included in the margin?
+ -Yes any scholarship or assistantship will be a part of margin charged on education loan.
What is Moratorium Period?
+ -Course Period plus one year, or six months after getting a job
What is tenure of an education loan?
+ -Tenure of education loan provided by Indian Overseas Bank is maximum 7 years as per IBA Model Loan Scheme.
What does MCLR stands for?
+ -MCLR stands for Marginal Cost of funds based Lending Rate. It refers to the minimum interest rate of bank below which it cannot lend.
What all expenses are covered under this course?
+ -Expenses covered by Indian Overseas Bank education loan are:
- Tuition/ college/ hostel fee
- Examination/ lab/ library fee
- Books/ uniform/ instruments
- Caution deposit
- Passage money for studies abroad, etc.
Will my travel expense will be covered if I take loan from Indian Overseas Bank?
+ -Yes, travel expenses are covered under this loan
I have taken admission through management quota. Am I eligible?
+ -This depends totally on bank's discretion as whether a student meets other eligibility criteria or not.
What do you mean by reputed or recognized institutes?
+ -Institutes that are affiliated to state/ central universities and comes under UGC or AICTE are considered as recognized institutes. Reputed institutes are those which are well known and have standard course of repute. More often, banks provide the list of institutes they consider for loan. (You can contact nearest branch for the same)
Are there any special benefits if I have secured admission to one of the top premier institutes?
+ -Indian Overseas Bank does not provides any additional concession to students who have secured admission in top rated institutes
What is the processing fee or prepayment charges?
+ -The education loan offered by Indian Overseas Bank does not carry any prepayment charges or processing charges for studies in India or Abroad.
Will cost of my computer be covered under the loan sanctioned?
+ -Reasonable cost for the computer or laptop well be covered under the loan if it is required to complete the course.
Why is Pan Card necessary?
+ -Pan Card is one of the mandatory document required by banks these days. It is mandatory because:
- Easy to assess Income
- Easy to trace borrowers
Are diploma or certificate courses considered under Indian Overseas Bank education Loan (both for India and Abroad)?
+ -Diploma courses are eligible under Indian Overseas Bank Education Loan. Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping.
Is a co-borrower necessary for loan?
+ -Yes, it is mandatory to have a co-borrower to avail loan from Indian Overseas Bank.
Who can be my co-borrower?
+ -Your parent/ spouse/ guardian can be a co-borrower. A co-borrower should be your immediate family member, should have a steady source of income, and a good credit history.
What all documents are required from the co-borrower?
+ -Documents required from the co-borrower are:
- Attested copies of age proof, residence proof and birth date.
- Self-attested passport size photograph
- Income proof and/or copy of income tax return file
- Details of collateral security along with government approved valuation certificate (if any).
How many guarantors do I need to borrow loan from Indian Overseas Bank?
+ -You need at least 2 guarantors to avail loan from Indian Overseas Bank.
What is the KYC requirement in education loan?
+ -KYC requirements are the documents as a proof of personal identification and residence proof of the applicant as well as the co-borrower.
What are maximum term for repayment?
+ -Maximum Term for repayment for Loan is 5- 7 years
How can I repay the loan?
+ -You can repay the loan after the moratorium period by mode of EMI or through post- dated cheques.
What is EMI? How are they calculated?
+ -EMI stands for Equated Monthly Installments. It can be calculated by using the formula given below
- EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1]
- Here, P is Amount of Education Loan, R is Rate of Interest, n is Tenure of the Loan.
- Or simply you can use the EMI calculator provision available on Indian Overseas Bank’s official website.
What are the charges for late EMI payment?
+ -24% per annum on outstanding amount is charged for the late EMI payment and INR 500 for every bounced cheque.
Is the loan disbursed in name of individual applicant or to the institute/ university directly?
+ -The loan is disbursed directly to the institute/ university that you have taken admission to. Hence, an applicant is supposed to submit institute brochure with proper division of the fee
If I am unable to complete my course in given tenure, will my repayment term be extended?
+ -It is completely on the banks discretion to extend the moratorium period or not. It can be extended for maximum 2 years based on student's reason. You can contact your nearest branch for more details.
What is method of application of interest on education loan?
+ -The interest will be charged at simple rate from the date of disbursement till commencement of repayment of loan. After that, compound interest is charged on reducing balance.
What is interest rate of education loan?
+ -The interest rate is different for different loan offered. Refer the tables below:
| Loan Amount | Rate of Interest |
| Upto INR 4 Lacs | 12.25% |
| Between INR 4 to 7.50 Lacs | 13.50% |
| Above INR 7.50 Lacs | 13.25% |
| Vocational Courses | 12.25% |
| Ward of Staff | 12.00% |
What is interest subsidy on education loan?
+ -Indian Overseas Bank offers
- Vocational Education and Training scheme is offered to students who wish pursue vocational courses to increase their career prospects.
- Interest Subsidy scheme for economically weaker sections and to promote education amongst them
- Career Dreams offers financial assistance for coaching/ tuition fee to students preparing for professional entrance exams and civil services entrance exam
- IOB Scholar is offered to students who have secured admission in recognized institutes.
What documents do I need to submit to avail interest subsidy scheme?
+ -The documents that need to be submitted are:
- Income certificate issued by authorised authorities
- Bonafide student certificate
- Letter of undertaking or declaration signed by borrower/ co-borrower
If I am availing loan for overseas studies, can I also avail interest subsidy scheme?
+ -No, the interest subsidy scheme is available only for studies applying for studies in India.
What is employment verification in an education loan?
+ -The bank takes the responsibility to cross verify all the employment details of the applicant and co-borrower. If the banks fails to cross verify every detail provided, it might reject the loan application.
Are there any tax benefits in education loans?
+ -Under Section 80E of Income Tax Act, loan borrowers can avail the tax benefits. This benefit is only available over and above INR 1,50,000. Tax benefits can be availed once the borrower starts paying interest on loan. The deduction is available until borrower pays off full interest amount on loan or for maximum of 8 years (whichever is earlier). You can visit the official website of Indian Overseas Bank to calculate your tax benefit through their tax benefit calculator.
Is it necessary to have bank account with the bank while availing loan from that particular bank?
+ -It is not necessary to have a bank account while availing the loan but it makes it easier for the borrower to get loan application approved.
Can I repay my loan in foreign currency even if my bank is in India?
+ -Yes, you can pay the amount in foreign currency (Euro, Pound, Dollar, etc.) The bank might charge an additional currency conversion fee as per RBI regulations.
Why do banks require insurance policy as security?
+ -The banks require insurance policy as security in lieu of education loan provided. The insurance policy should be equal or more to the amount of loan sanctioned. In case of untimely demise of the borrower, the bank recovers the amount from the insurance policy
Are there any additional benefits on availing loan from Indian Overseas Bank?
+ -There are no additional benefits offered by Indian Overseas Bank mentioned on the official website. Borrowers can contact the nearest branch for the same.
What is credit score? Is it important for education loan?
+ -Credit Score is inclusive of various factors such as credit history (Loan history or credit card). If a student does not have a credit score, banks calculate it by considering factors such as University, College and the Course of admission. Banks consider the academic background of student and credit history of co-borrower.
Are NRIs eligible for the education loan?
+ -NRIs are eligible for the loan if they have Indian citizenship and are Indian passport holder.
Is Visa a necessary document for studying abroad?
+ -Visa is needed as a document proof but it is not a sole requirement.
What all procedures do one have to go through while applying for abroad?
+ -A student who is applying for studying abroad have to give necessary documents required by the bank. One needs to have a thorough knowledge of the course they are applying for and in which institute as it can be asked on the airport by the foreign officials.
If a student have any query, where or whom to contact?
+ -student can reach out to the nearest branch in case of any query.
Customer Care Number: 91-44-28524212/ 044-28519490/ 044-28519639
Customer Care Id: mdd@iobnet.co.in
Local rates apply on every call
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