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  • Indian Overseas Bank Education Loan

    Indian Overseas Bank Education Loan
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    “An investment in knowledge pays the best interest” Nothing can adequately explain the need for education more than the mentioned adage. A good education reaps in a great career for an aspiring student. In an effort to make sure that students get maximum financial benefits while they study in India or abroad, Indian Overseas Bank provides a comprehensive education loan scheme with attractive discounts on interest rates, flexible repayment options and higher loan amounts. Indian Overseas Bank educational loan covers a vast selection of courses and disciplines offered at various institutions in India and abroad.

    Feature & Benefits of an Indian Overseas Bank educational loans:

    ‘Vidya Jyoti Education Loan’ offered from Indian Overseas Bank is one of the best financing options for students aspiring to pursue education in premier institutions in India and abroad. With a multitude of choices available as far as educational courses are concerned, students can opt for any discipline or degree with IOB’s affordable education loan scheme.

    Quantum of Loan:

    Indian Overseas Bank sanctions education loans up to a maximum loan amount of Rs. 30 lakhs for studies in India and up to Rs. 40 lakhs for education abroad.

    Interest rates:

    Loan Amount

    Rate of Interest

    Up to Rs. 4 Lacs


    Above Rs. 4 lacs to Rs.7.50 lacs


    Above Rs.7.50



    Vocational Courses


    Ward of Staff


    Female applicants can enjoy an additional discount of 0.50% on Indian Overseas Bank education loan interest rates.

    Loan Margin:

    Borrowers are not required to bring in any loan margin for education loans taken up to Rs 4 lakhs. But IOB requires a loan margin of 5% for studies in India and a margin of 15% for studies abroad for loan amounts exceeding Rs 4 lakhs.


    • For loan amounts up to Rs 4 lakhs the co-obligation of the parents would suffice and security is not required.
    • Loan amounts above Rs. 4.00 lakh and up to Rs. 7.50 lakh require collateral security in the form of third party guarantee along with co-obligation of the parents.
    • Borrowers availing loans above Rs.7.50 lakh are required to furnish collateral security in the form of NSC, KVP, LIC policies, immovable properties and bank deposits in the name of student, parent, guardian or any other third party with suitable margin.

    Holiday Period:

    Indian Overseas Bank offers a ‘holiday period’ of up to 6 months after the applicant gets a job or 12 months after the course is completed for repayment of educational loans.


    An Indian Overseas Bank educational loan can be repaid in monthly installments for a maximum period of up to 5 to 7 years, excluding the holiday period.

    Interest servicing:

    The student can choose to either pay the interest during the course of the study or pay it along with the principal amount for the selected tenure, commencing after the period of study. If applicants choose to service the interest during their course tenure, then they will be entitled to an interest rebate of 1%.

    Eligible courses:

    Studies in India - An Indian Overseas Bank educational loan can be availed for Graduation, Post-Graduation or Diploma education in any recognised State or Central Government institution with any of the following disciplines -Engineering

    • Medical
    • Agriculture
    • Veterinary
    • Law
    • Dental
    • Management
    • Aeronautical
    • Pilot training (courses should be approved by the local aviation authority)
    • Shipping (courses should be approved by the local shipping authority)

    Other Courses:

    • ICWA, CA or CFA
    • Foreign University courses
    • Evening courses

    Studies Abroad - An IOB education loan will be sanctioned only for graduate and postgraduate courses offered from reputed universities and is not available for a diploma.

    Eligibility criteria for an IOB education loan:

    • The applicant should be an Indian national.
    • Students applying for an IOB educational loan should have secured admissions to professional or technical courses in institutions in India or abroad.

    IOB education loan FAQs:

    1. Can mortgaged properties be submitted as security for an Indian Overseas Bank education loan?
    2. Yes, the unencumbered portion of mortgaged properties can be submitted as security on second charge basis, provided it covers the loan amount.
    3. What is the maximum loan tenure available to IOB customers?
    4. The maximum loan tenure that can be taken on an education loan is up to 7 years.
    5. Are IOB education loans available only for PG and UG courses abroad?
    6. Yes, the loan is provided only for PG or UG degrees, and not for diplomas.
    7. Does the Indian Overseas Bank education loan include insurance coverage for the student?
    8. Yes, applicants and their parents will be entitled to get life insurance coverage as part of the loan scheme.
    9. Can an IOB education loan be taken for purchasing computers?
    10. Yes, the IOB education loan can be availed for purchasing a computer and the device has to be hypothecated to the bank.
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