Indian Overseas Bank Education Loan for Studying Abroad

The Indian Overseas Bank education loan goes up to ₹1.5 crore for studies in India and up to ₹3 crore for studies abroad. The interest rate for studies abroad starts at 10.00% p.a. to finance the various expenses that occur while pursuing higher studies. 

The Indian Overseas Bank is a public sector bank known for its overseas banking services and operations, including the IOB education loan. It offers attractive advantages on an education loan through several stackable interest concessions, zero foreclosure charges, along with a large loan limit.

Loan Amount for Studies Abroad: Up to ₹3 crore

Interest Rates: 10.00% p.a. onwards

Moratorium Period: Course duration + 12 months

Repayment Tenure: Up to 15 years

Processing Fee: Up to 0.60% of the loan amount

Foreclosure Charges: NIL

*The Indian Overseas Bank education loan interest rates mentioned are indicative and subject to change. The final interest rate also depends on individual profiles and the bank’s discretion.

There are three Indian Overseas Bank abroad education loan schemes that cater to students who want to study at foreign universities. 

1. IOB Vidya Jyothi

2. IOB Scholar

3. IOB Vidya Suraksha

These IOB education loans are intended to make studying abroad more accessible through affordable interest rates. The education loan also allows relatives to become co-applicants of a loan. The scheme has features like concessions during the moratorium period; this further adds to the financial relief for students. Here is an overview of the features of an Indian Overseas Bank abroad education loan.

*The Indian Overseas Bank education loan interest rates mentioned are indicative and subject to change. The final interest rate also depends on individual profiles and the bank’s discretion.

Countries and Courses Covered

The Indian Overseas Bank education loan schemes for studies abroad determine eligibility based on the university ranking rather than a specific list of countries. IOB’s core abroad education loan scheme (Vidya Jyothi) considers the top universities according to global ranking websites such as QS Top Universities and Webometrics.

The courses covered by Indian Overseas Bank education loan include the following:

• Undergraduate Degree: Any technical and job-oriented courses offered by recognised universities

• Postgraduate Degree: Master of Computer Applications, Master of Business Administration, Master of Science, and more

• Professional Qualifications: Certified Public Accountant (CPA) in the USA, Chartered Institute of Management Accountants (CIMA) in the UK, and similar professional tracks

• Specialised/Diploma Courses: Recognised diploma or degree courses in aeronautics, pilot training, and shipping

Certain ineligible courses under the Indian Overseas Bank education loan are also specified. These include:

• Off-campus courses offered by universities outside of its jurisdiction

• Partnership courses offered by open universities

• Distance learning courses

• Skill development, short-term, or part-time courses

Loan Amount for Overseas Studies

The IOB education loan amounts range from ₹7.5 lakh to ₹3 crore, varying by the three abroad loan schemes it offers. The IOB Vidya Suraksha scheme requires no collateral as it is linked to the central government’s CGFSEL (Credit Guarantee Fund Scheme for Education Loans).

Apart from the abroad Indian Overseas Bank education loan schemes, funding for studies in India is also covered by the IOB. This section summarises all IOB education loan schemes.

IOB Vidya Jyothi

The IOB Vidya Jyothi is the flagship education loan scheme for students pursuing their higher education in India as well as abroad. The Vidya Jyothi scheme offers loans up to ₹3 crore at interest rates starting from 10.00% p.a. IOB also allows you to stack multiple interest concessions to reduce your total payable interest.

IOB Scholar

The Indian Overseas Bank designed the IOB Scholar scheme for studies in India and abroad outside the Indian Banks’ Association (IBA) framework. This scheme applies to students who are excluded from other schemes due to the strict conditions set by the IBA. For instance, the IOB Scholar scheme accepts students who secure a seat via the management quota or pursue vocational or skill programs. It offers loans up to ₹60 lakh with an interest rate starting at 10.55% p.a.

IOB Vidya Suraksha

The Vidya Suraksha scheme offers Indian Overseas Bank education loans for studies in India and abroad. The scheme is linked to the CGFSEL, meaning the central government covers 75% of the loan amount in case of default. It offers loans up to ₹7.5 lakh without any collateral, with a starting interest rate of 10.00% p.a.

IOB Vidya Shrest

The Vidya Shrest education loans are reserved for students pursuing their higher education only at IOB's select Indian premier institutions. It offers loans up to ₹1.5 crore with interest rates of 7.75% and 8.00% p.a. for A- and B-rated institutions, respectively.

IOB Skill Loan

The IOB Skill Loan offers funding to students taking up skill development and vocational training programs in India. ₹7.5 lakh is the maximum loan amount offered with an effective interest rate starting at 9.85% p.a.

IOB Career Dreams

The IOB Career Dreams is a special loan scheme that finances your preparation for any entrance exams for professional courses, civil services exams, and other career and skill development courses in India. IOB generally offers a loan amount of ₹2 lakh with an 11.80% p.a. interest rate. However, the bank can extend the loan beyond ₹2 lakh in case of high-value courses at an interest rate of 12.00% p.a.

IOB Passion

The IOB Passion is an IOB education loan scheme that offers loans to individuals pursuing their career in areas such as arts, music, dance, sports, photography, painting, and gardening. It offers loans up to ₹3 lakh.

The Indian Overseas Bank education loan covers all expenses related to academics and accommodation. The following costs are covered by the IOB when you pursue your education abroad:

• Tuition fees

• Accommodation fees

• Exam fees

• Books, equipment, study materials

• Travel fare

• Computer (at a reasonable price)

• Other miscellaneous costs

If you have already paid your university’s fees for the first year, the Indian Overseas Bank will reimburse the amount from the sanctioned loan amount. 

The Indian Overseas Bank education loan margin for studies abroad ranges from 0% to 25%, depending on the loan scheme. The IOB Vidya Jyothi scheme has different loan margins for different loan amount ranges. They are listed as follows:

IOB Vidya Jyothi:

• Up to ₹4 lakh: 0%

• ₹4 lakh to ₹30 lakh: 15%

• ₹30 lakh to ₹1 crore: 20%

• ₹1 crore to ₹3 crore: 25%

IOB Vidya Suraksha:

• Up to ₹4 lakh: 0%

• ₹4 lakh and above: 15% 

If you receive any scholarship, the Indian Overseas Bank can count it as part of the 15% loan margin.

IOB Scholar: This scheme has a standard loan margin of 25% irrespective of the loan amount (Maximum: ₹60 lakh)

Here is a worked example of what your IOB education loan margin would mean for you:

If a student takes a loan of ₹25 lakh with a loan margin of 15%, then the amount paid by the borrower would be ₹3.75 lakh. Hence, they can get an education loan of a maximum of ₹21.25 lakh, while the borrower will have to arrange the remaining ₹3.75 lakh themselves.

The Indian Overseas Bank education loan requires the co-applicant to arrange collateral of suitable value if they opt for a secured loan. IOB education loans accept certain tangible and liquid securities as mentioned below:

Tangible Collateral:

• Land

• House/Flat

• Gold

Note that the Indian Overseas Bank will use 100% of the collateral value if land or a building is the pledged property. In case of a mortgaged property, the bank will determine its value for the IOB education loan by considering loan-to-value (LTV) requirements.

Liquid Securities:

• Government securities 

• Insurance policies

• Mutual Funds (MF)

• Shares

• Debentures

• Sovereign Gold Bonds (SGB)

• Fixed Deposit (FD)

The Indian Overseas Bank education loan schemes for studies abroad have the following collateral requirements:

The Indian Overseas Bank education loan interest rate starts from 10.00% p.a. for studies abroad and 7.75% p.a. for studies in India.

Interest Rate by Scheme

The IOB education loan rate of interest starts at 10.00% p.a. for studies abroad. The following are the interest rates offered by different Indian Overseas Bank education loan schemes:

*The Indian Overseas Bank education loan interest rates mentioned are indicative and subject to change. The final interest rate also depends on individual profiles and the bank’s discretion. 

How the Rate Is Calculated

Effective from 8th October 2026, 8.35% p.a. is the repo-linked lending rate (RLLR), which determines the IOB education loan interest rate. The Indian Overseas Bank education loan interest rate uses the RBI’s repo rate as its external benchmark. The bank then adds a spread to this rate to arrive at the RLLR. The RLLR is calculated as follows:

RLLR = Repo rate (5.50%) + Spread (2.85%) 

Simple Interest During the Repayment Holiday

For Indian Overseas Bank education loans, simple interest is charged on the disbursed amount during the moratorium or the repayment holiday. However, paying this interest is optional. After the moratorium ends, the accumulated simple interest is added to the principal loan amount, and EMIs are charged every month. This is also when the interest starts to compound. 

Paying the simple interest during the repayment holiday would significantly lower the EMIs. 

Indian Overseas Bank education loans can bring great benefits to students through their multiple interest concessions. These concessions can be combined to reduce your overall Indian Overseas Bank education loan interest rate. Some of these special interest concessions are only applicable under the abroad loan schemes of Vidya Jyothi and Vidya Suraksha.

Concession for Girl Students

The Indian Overseas Bank education loan interest rate gets a concession of 0.50% for all qualified female applicants.

Rebate for Servicing Interest During Study

A 1.00% discount applies to students who pay off the monthly accruing simple interest during their studies in the moratorium period in an education loan. 

University Ranking Concession

For the top 100 universities, the Indian Overseas Bank education loan offers an interest concession of 1.50%. For the universities ranked between 101 and 200, you get an applicable concession of 1.00%. Note that this specific interest concession applies to loans covered only under the Vidya Jyothi scheme.

How the Concessions Stack and the Lowest Effective Rate

To understand how these interest concessions can be stacked together, consider this example: A female student secures admission to the University of Oxford and pays off the monthly interest during the moratorium. She qualifies to receive the following concessions on her IOB education loan interest rate:

1. Top 100 university concession: 1.50%

2. Female student concession: 0.50%

3. Concession for servicing interest during the moratorium: 1.00%

The total combined available discount sums up to 3.00% on the assigned interest rate.

However, the catch here is that the final interest rate cannot fall below IOB’s RLLR, i.e., 8.35%. Hence, the IOB is prohibited from lending at an interest rate below the RLLR.

Concession for Children of IOB Staff

The Indian Overseas Bank education loan interest rates are discounted for the children of the bank’s staff members. These rates apply to the following two abroad IOB education loan schemes:

*The Indian Overseas Bank education loan interest rates mentioned are indicative and subject to change. The final interest rate also depends on individual profiles and the bank’s discretion. 

The Indian Overseas Bank abroad education loan processing fees usually range between 0.50% and 0.60% of the required loan amount. The following table lists all Indian Overseas Bank education loan charges that may apply:

There are certain Indian Overseas Bank education loan eligibility criteria that students and co-applicants are required to meet. The following sections list all the nationality, academic, and financial criteria that need to be fulfilled by the borrowers:

Student Eligibility Criteria

Co-Applicant Requirements

Indian Overseas Bank education loans require certain documents from the students and co-applicants to evaluate and sanction the loan application. The following table shows the list and details of the documents required for the loan application process. 

Note that all relevant documents must be self-attested. 

To save time and avoid processing-related delays or problems, go through the full education loan document checklist that considers your specific profile and needs.

To secure an Indian Overseas Bank education loan apply online through the portal on the bank’s official website or visit your nearest IOB branch.

IOB Education Loan Apply Online

For an IOB education loan apply online through the following steps:

Step 1: Register on the portal on IOB’s official website. Alternatively, you can apply directly on the WeMakeScholars portal, which checks your eligibility across 20 banks and NBFCs

Step 2: Download and fill out the Indian Overseas Bank education loan application form through the portal

Step 3: Select the applicable Indian Overseas Bank education loan scheme and upload all relevant documents required for an education loan

Step 4: Submit the Indian Overseas Bank education loan form and keep a copy of the acknowledgement

Processing Time and Sanction

The processing and sanction time for an Indian Overseas Bank abroad education loan varies based on whether you pledge collateral. For an unsecured education loan, the average processing time is around 15 days. However, it can take longer for secured IOB education loans due to document verification and other assessment factors that IOB uses. 

To understand how repayment for an Indian Overseas Bank education loan works, let us take the help of a worked example:

Say you borrow a ₹21 lakh IOB education loan at an interest rate of 10% with a repayment period of 7 years. You make interest payments during the moratorium period for the course duration plus one year. Your approximate monthly EMI would be around ₹35,000.

Thus, at the end of each year, your estimated payable EMI and its interest and principal components of your IOB education loan can look like this:

*Note: Your actual payment can differ subject to the bank’s discretion. 

Moratorium and Repayment Holiday

The moratorium period for an Indian Overseas Bank education loan ends 12 months after the course, or 6 months after you get a job, whichever is earlier. 

Simple interest accrues during the moratorium. However, making interest payments during studies is not mandatory, which is why this period is also called a repayment holiday. If you choose to make interest payments during the moratorium, it can reduce the load on your subsequent EMI payments.

Repayment Tenure

The maximum education loan repayment tenure for an Indian Overseas Bank education loan is 15 years. The EMI payments begin after the end of the moratorium period, when any unpaid interest gets capitalised. Making timely payments towards interest during and after the moratorium helps to reduce capitalisation or compounding of the principal balance. 

If you choose to make interest payments during the moratorium, a 1.00% interest concession applies to the loan’s entire life.

EMI Calculator 

With the help of the education loan EMI calculator Indian Overseas Bank gives an estimate of your monthly EMI and total payable interest. However, your EMIs rely on far more factors than the education loan EMI calculator at IOB considers. These factors include your course’s duration, the moratorium, and whether you made any interest payments during your studies.

WeMakeScholars’ education loan EMI calculator gives you more accurate figures of your payable EMIs and interest. 

Prepayment and Foreclosure Charges

Prepayment and foreclosure charges apply to an education loan when you wish to close the loan early, either partially or fully. However, there are zero prepayment and foreclosure charges for an Indian Overseas Bank education loan. This is because of the RBI mandate that prohibits banks tied to the RLLR from charging these fees on non-business loans.

It is important to be aware of the interest rates, processing fees, and other charges of the education loan you choose. Hence, the following table compares the Indian Overseas Bank education loan details with those of other public banks to help you understand your loan options.

*The interest rates mentioned are indicative and subject to change. The final interest rate also depends on individual profiles and the bank’s discretion.

Securing your education loan through WeMakeScholars brings you several benefits:

• Lower Interest Rate: By processing your education loan through WeMakeScholars, you get an interest rate 0.50% to 2.00% lower than the average interest rate. 

• End-to-End Customer Support: WeMakeScholars offers comprehensive assistance from pre-sanction to post-disbursement procedures in education loans.

• No Service Charges: WeMakeScholars does not charge anything for the services being provided. It is completely free of cost.

• Get Cashback: You can get cashback of up to ₹3,000 on the first loan disbursement.

An Indian Overseas Bank abroad education loan is a strong choice for students seeking high loan amounts and flexible repayment options. Moreover, its stackable interest concessions make IOB education loans more appealing to students who secure admission in top universities and make timely interest payments. 

To get pre-negotiated interest rates and comprehensive support with your education loan, check your eligibility with WeMakeScholars today.