IOB Vidya Jyoti Education Loan Scheme

Indian Overseas Bank Vidya Jyoti Education Loan Scheme for Pursuing Higher Studies in India and Abroad

The Vidya Jyoti Education loan from Indian Overseas Bank helps students who want to pursue higher studies in India and abroad afford the cost of the course and related expenses. The minimum amount for this loan is Rs. 7.50 lakh. The maximum loan amount for studying in India is Rs 30 lakh and studying abroad is Rs. 40 lakh.

Features of Vidya Jyoti Education Loan Scheme for Pursuing Higher Studies in India and Abroad

Why this Loan?

• The loan is meant to help students fulfil their dreams of pursuing higher education in India or abroad
• The maximum loan amount for studying in India is Rs. 30 lakh and studying abroad is Rs. 40 lakh
• The IOB Vidya Jyoti Education Loan is disbursed as a series of payments over the required number of years and not as a lump sum
• The loan can be taken for all institution fees as well as related expenses including purchase of books, laptops, hostel fees, lab fees, examination fees, etc.
• If the student is unable to complete the course on time, the bank may offer an extension of upto 2 years

Loan Amount

• The maximum loan amount for studying in India is Rs 30 lakh and studying abroad is Rs. 40 lakh

Interest

• As of October 2020, the interest rate for the Indian Overseas Bank Vidya Jyoti Education Loan interest rate is the sum of the Repo Linked Lending Rate (RLLR) which stands at 6.85% and a spread of 3.2%, making the effective rate 10.05%
• Children or wards of IOB employees get a discounted spread of 1.9%, making the effective rate 8.75%
• The moratorium period for this loan scheme is course period plus 12 months after the completion of the course
• The bank offers 1% interest concession to borrowers if interest is serviced during the moratorium period

Repayment

• The loan amount for each year is repayable in equated monthly instalments up to a period of 15 years after the end of the moratorium period
• This means that you pay only interest during the moratorium period and then EMIs every month until the complete repayment of the loan

Security Needed

• Parents must be co-borrowers
• Assignment of future income of the student
• Tangible collateral security that covers at least the quantum of the loan is required for this loan

Eligibility

• The applicant must be a resident Indian national (Indian citizens who have stayed in the country for over 180 days in the last financial year)
• The student must have secured admission in a higher education course in a recognised institute in India or abroad
• Where there is no common entrance test, the student must have secured at least 60% (55% for SC or ST students) in the qualifying examination

Margin Money (Borrower Contribution to the Total Cost)

• Study in India: The borrower must offer 5% of the loan amount as margin money to get the loan
• Study Abroad: The borrower must offer 15% of the loan amount as margin money to get the loan
• IOB may ask the applicants to pay margin on a yearly basis during the course period to meet the percentage numbers of the total loan disbursed
• Any scholarship will be considered as a contribution towards the margin

Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a course costs Rs. 20 lakh in which case the borrower has to provide a margin of Rs. 1 lakh (5% for Indian courses) or Rs. 3 lakh (15% for study abroad) while IOB offers the rest. It is important to note here that scholarship/ assistantship is included in margin

Processing and Other Charges

• There are no processing charges for a loan taken for studying in India
• For a loan taken for studying abroad, IOB charges a fee of 0.5% of the loan amount which is refunded on disbursal of the first instalment

Other Features to Know

• The loan is granted jointly with the parent/guardian (co-borrower) of the applicant
• The bank may ask the borrower to submit progress report during the course
• The loan is disbursed directly to the school, book seller or publisher, computer seller, and so on and not to the applicant(s)

Documents Needed

• Application Form duly filled and signed by applicant and/or guarantor along with details of applicant and/or guarantor and family
• Two Passport Size Photographs of student, applicant and/or guarantor
• Photocopy of PAN Card of the student that needs to be submitted at the time of application or during the course period
• Personal Identification Proofs (Any One): Electoral I-Card, Passport, Driving License, PAN Card or Aadhaar Card
• Residential Address Proof (Any One): Electricity Bill, Landline Telephone Bill, Electoral or Voter ID Card or Passport
• Admission Letter, Course Details and Prospectus
• Fee Details with Demand of Fee by the Institution
• All Proofs of Past Academic Record including Mark Sheets and Certificates

Reference Facts

• Indian Overseas Bank Website: www.iob.in and www.iobnet.co.in (net banking)
• Headquarters: Chennai, Tamil Nadu
• Education Loan Number: 044-28519490, 044-28519639
• Call Centre Toll-Free Number: 1800 425 4445