Indian Overseas Bank (IOB) Education Loan for Abroad: Interest Rates, Eligibility, Application Process & More

Studying abroad can be a huge opportunity, but it comes with a high price tag that can be intimidating for most students. 

Indian Overseas Bank (IOB) offers education loans designed to cover these major expenses, such as tuition, living costs, and other essentials. 

But before committing to an IOB loan, you need a clear picture of what the loan actually entails, right from eligibility requirements and interest rates to the repayment structure and documentation needed.

In this article, we’ll give you a detailed breakdown of applying for and getting an Indian Overseas bank education loan to study abroad. We’ll start with the interest rates you can expect, followed by the loan types, eligibility criteria, required documents, and a step-by-step guide on how to apply. 

Also Read: Best Education loan for Study Abroad

Indian Overseas Bank (IOB) education loan interest rates

For students planning international studies, IOB’s “Vidya Jyoti” and “Vidya Suraksha” schemes are popular options. The interest rate charged by the Indian Overseas Bank is in line with the RBI guidelines:

Loan Amount / Type	Interest Rate
Up to ₹7.5 lakhs	10.70% per annum
Up to ₹7.5 lakhs	11.70% per annum
Vocational Courses	11.70% per annum
Wards of IOB Staff Members	10.40% per annum
Processing Fees	None

Types of education loans offered by Indian Overseas Bank

Indian Overseas Bank (IOB) offers different loan options, depending on your requirements. Here’s a detailed look at the options:

Vidya Jyoti Education Loan Scheme

The Vidya Jyoti scheme is IOB’s primary option for students targeting professional or technical degrees. It’s comprehensive, aiming to cover most expenses you’d face, whether you’re studying domestically or abroad.

Overview

• You can borrow up to ₹30 lakhs for studies in India and up to ₹40 lakhs for studies abroad.
• The interest rate is at 12.55%, but it is dynamic​.
• For studies in India, IOB requires a 5% margin, and for abroad studies, a 15% margin. 
• IOB offers a generous tenure of up to 15 years to repay the loan, including a moratorium (grace period) of course duration plus one year.

IOB Scholar Education Loan Scheme

The IOB Scholar scheme is designed with broader eligibility, covering students in conventional academic tracks as well as vocational and skill-based programs. This scheme is a good fit if you’re enrolled in a program with a defined employment trajectory.

Overview

• The loan scheme allows you to borrow up to ₹50 lakhs for studies in India and ₹60 lakhs for studies abroad. This high cap makes it ideal for courses with significant expenses​.
• Interest rate is between 11.55% and 12.55%, depending on the course and location.
• 25% of the total loan amount must be covered by the student for both domestic and international studies.
• Repayment period is up to 15 years, after a moratorium period of course duration plus one year.

IOB Vidya Shrest Education Loan Scheme

If you’re aiming for a top institution in India, such as a premier engineering, medical, or business school, the Vidya Shrest scheme is specifically designed for students like you. 

The scheme focuses on students admitted to elite institutions, providing flexible terms with or without collateral.

Overview

• Loans up to ₹30 lakhs with collateral and up to ₹15 lakhs without collateral.
• Interest rate is 11.05%, which is relatively lower to support students in premier institutions.
• No margin requirement makes it easier to start without an initial upfront payment from your side.
• Moratorium period of course duration plus one year, allowing time to settle into a career before repayment starts​.

Also Read: How to Get an Education Loan without Parental Support?

IOB Scholar education loan scheme – Eligibility criteria

The IOB Scholar Education covers a broad range of courses in both India and abroad. The eligibility is outlined as follows:

• Open to students admitted through management quota, provided they meet minimum academic criteria (60% for general category; 55% for SC/ST)
• Emphasizes programs with clear job prospects upon completion, aligning with the scheme’s focus on employability
• Available for candidates applying to any program that is likely to result in an employment for the candidate

Indian Overseas Bank offers several education loan schemes tailored to various needs, whether you’re heading abroad or staying in India.

But here’s the catch: you might be missing out on more competitive options from other banks and NBFCs. With so many choices out there—like SBI, ICICI Bank, Axis Bank, HDFC Credila, Avanse Financial Services, and Tata Capital—it’s crucial to compare everything carefully.

This is where FundRight (by GradRight) becomes your go-to partner. Instead of being overwhelmed by endless research, FundRight streamlines your search by connecting you with offers from 15+ Indian and international banks and NBFCs.

Here’s how it works in just five steps:

1. Register on FundRight to begin.
2. View loan offers from 15 trusted lenders.
3. Upload your documents in a secure and user-friendly way.
4. Get personalized assistance from a Financial Advisor to refine your loan options.
5. Quick loan disbursement—all within as little as 10 days.

Plus, you’ll benefit from features like no-cosigner loans, competitive interest rates, and zero paperwork.

Let’s now dive into the important points you should keep in mind for IOB education loans.

IOB education loan – important points

The IOB Education Loan comes with terms that you’ll want to consider carefully. Here are the important points you need to know:

• If you’re studying in India, you can get up to ₹30 lakhs. For studies abroad, the limit is ₹40 lakhs. These amounts depend on the course and scheme you select.

• IOB’s rates are 10.70% for loans up to ₹7.5 lakh and 11.70% for amounts beyond that. 

• You’ll have up to 15 years to repay, after a moratorium (no payments required) during your study period, plus six months to a year after you finish. 

• For amounts above ₹7.5 lakhs, you’ll need to provide collateral. 

• For studies in India, you’ll need to cover 5% of the total expenses; for international courses, 15%. 

• If you’re a female student, there’s a 0.5% reduction in the interest rate. 

• Unlike many banks, IOB doesn’t charge processing fees on education loans, so there’s no added cost when you apply.

Each term of this loan structure affects your financial responsibility both during and after your studies, so make sure the loan works with your plans.

Indian Overseas Bank (IOB) education loan – Documents required

Here’s a breakdown of the documents you’ll need to apply for an Indian Overseas bank education loan:

• Aadhaar, PAN, or passport for both applicant and co-applicant

• Marksheets for 10th, 12th, and any recent qualifications

• Official letter confirming admission from the institution

• A breakdown of tuition and related costs from the institution

• Recent salary slips, six months of bank statements, and latest income tax returns

• Property papers or certificates for pledged assets, in case of collateral

• Receipts showing your contribution to the overall education costs, if needed

If you have these documents prepared and ready beforehand, it’ll simplify the loan process to a great extent. 

Also Read: Study Abroad Loan Documents | Documents for Education Loan

IOB education loan repayment rules

For the Indian Overseas Bank education loan, repayment terms are structured to provide flexibility based on your course duration and loan amount. Here are the main repayment rules you need to know:

• The loan allows for repayment over a maximum period of 15 years for loans up to ₹60 lakhs after the end of the moratorium.

• The moratorium covers the course duration plus an additional 6-12 months after graduation.

• Interest will accrue during the moratorium. You can choose to pay this interest monthly to reduce the total loan burden or add it to the principal.

• There is no prepayment penalty. 

How to apply for an IOB education loan?

To apply for an Indian Overseas bank education loan, follow these steps:

• Confirm eligibility based on your course and collect all required documents like identity proof, academic records, admission letter, fee structure, and income proof for the co-applicant.

• Submit your application either through a nearby IOB branch or the IOB online portal.

• IOB will review and verify documents, including credit checks and appraisal of any collateral.

• Once approved, you’ll get a sanction letter with loan terms.

• Funds are released directly to your institution according to the schedule provided.

FAQs