Indian Overseas Bank (IOB) — Education Loans (India)

1. Bank Overview

Indian Overseas Bank, established in 1937 and headquartered in Chennai, is a public sector bank with over 3,200 domestic branches and a strong regional presence, particularly in South India. It operates under government ownership and provides a broad range of banking services — including education loans.

2. Loan Schemes & Eligibility

IOB offers multiple education loan options for domestic and international study, primarily under IBA-aligned frameworks and bespoke schemes:

A. Vidya Jyoti

• For technical or professional courses in India and abroad, covering UG/PG and diploma programs.

B. IOB Scholar

• Designed for other higher education programs not covered by Vidya Jyoti, both domestic and international.

Eligibility:

• Indian nationals (age 18+), with confirmed admission to recognized programs, and not employed at the time of application.

3. Loan Coverage & Margin Rules

• Maximum loan amounts reach up to ₹10 lakh for study in India, and ₹20 lakh for abroad under Vidya Jyoti.

• Collaterals:

  • Up to ₹4 lakh: No collateral required.
  • Above ₹4 lakh: For domestic loans, 5% margin; for abroad, 15% margin.
  • Under Scholar: Uniform margin of 25% across all loans.

IOB allows margin to be covered by scholarships or assistantships.

4. Interest Rates & Concessions

IOB education loan rates are tied to RLLR/MCLR plus spreads:

• Vidya Jyoti (RLLR + 3.20%) ≈ 10.05% effective; interim interest service during moratorium gives 1% rate concession.

• IOB Scholar:

  • Up to ₹7.5 lakh: RLLR + 2.20% (≈ 9.05%)
  • Above ₹7.5 lakh: same as Vidya Jyoti (≈ 10.05%)

• Additional concessions include:

  • 0.5% off for female students
  • 1.25% discount for children of bank staff/retired employees
  • 1.5% / 1% discount for admission into top international universities (Top 100 or 101–200 respectively)

5. Moratorium & Repayment Terms

• Moratorium: Course duration + 1 year (or 6 months after job placement, whichever is earlier).
• Repayment Period: Up to 15 years EMI (excluding moratorium).
• Interest during moratorium is calculated on a simple interest basis.

6. Disbursement & Processing

• Processing Fees: Nil for most education loan schemes.

• Repayment Modes:

  • Standing Instructions (SI) via IOB account
  • ECS for external banks
  • Post-dated cheques (PDCs) where ECS not available

• Loan Refinancing:

  • IOB allows refinancing of existing education loans up to ₹1.5 crore with 8% to 10% interest rates under the Refinance Scheme.

7. Summary Table

Final Thoughts

Indian Overseas Bank offers a cost-effective, accessible choice for students seeking public-sector-style financing. With interest rates starting around 9–10% and no processing fee, it competes well with PSUs like SBI or PNB—especially for applicants with limited collateral. If you'd like, I can continue next with UCO Bank or another lender at this level of detail!