Indian Bank Vidya Education Loans for Higher Studies

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

The IBA Model Education loan helps students who want to pursue higher studies in India and abroad afford the course fees and related expenses. The quantum of the Indian Bank Vidya Education Loan is decided by the bank on a case-to-case basis.

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Features of Indian Bank Vidya Education Loan

Why this Loan?

  • The loan is meant to help students fulfil their dreams of pursuing higher education in India or abroad
  • The Indian Bank IBA 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.

Indian Bank Vidya Education Loan – Loan Amount

  • The maximum loan amount depends on the needs of the student on a case-to-case basis subject to ceiling. As of October 2020, the ceiling is not mentioned for this loan on the bank’s website

Indian Bank Vidya Education Loan – Interest

  • Interest on education loans where Credit guarantee cover (CGFSEL) is available is 9.3%, though no interest concession is available to girl students
  • The rate of interest for the IBA Model Education Loan is 10.05% where no Credit Guarantee Coverage is available
  • For girl students, the interest rate on the loan is lower than the standard rate by 0.50%
  • The moratorium period for this loan scheme is course period plus 12 months after the completion of the course

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  • The Indian Bank Vidya Education 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

Security Needed

  • Loans up to Rs. 7.5 lakh Covered Under Credit Guarantee Scheme: No collateral security is required. The loan will be covered under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) subject to the conditions
  • Loans up to Rs. 4 lakh Not Covered Under Credit Guarantee Scheme: No tangible collateral security required. However, co-obligation from parents is mandatory. This is to ensure that the parents will pay off the loan if the student is unable to do so
  • Loans from Rs. 4 lakh up to 7.5 lakh Not Covered Under Credit Guarantee Scheme: Co-obligation of parents and a satisfactory third party guarantee are required
  • Loans up Above Rs. 7.5 lakh Not Covered Under Credit Guarantee Scheme: Co-obligation of parents, a tangible collateral of suitable value along with the assignment of future income of the student is required to avail this loan


  • 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 to a higher education course in a recognised institute in India or abroad

Eligible Courses

  • Courses in India: Diploma, graduation or post-graduate courses in various disciplines in reputed institutes
  • Courses Abroad: Job-oriented professionals, technical courses offered by reputed universities. MCA, MBA, MS, etc. courses by reputed institutes abroad

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Margin Money (Borrower Contribution to the Total Cost)

  • Loans up to Rs. 4 Lakh: The borrower does not have to offer any margin money to get the loan
  • Loans above Rs. 4 Lakh to Study in India: The borrower must offer 5% of the loan amount as margin money to get the loan
  • Loans above Rs. 4 lakh to Study Abroad: The borrower must offer 15% of the loan amount as margin money to get the loan

Note: Margin money refers to the amount the borrower contributes to the overall amount required. Suppose a house costs Rs. 40 lakh in which case the borrower usually has to provide a margin money percentage of 15-25% of the total house value while the lender bank offers the rest

Uses of the Loan

  • For fees payable to college, school, hostel, examinations, library or as laboratory fee
  • Travel expenses for studies abroad
  • Insurance premium for the student, if applicable
  • Caution deposit, building fund, refundable deposit supported by institution’s bills or receipts
  • Cost of books, equipment, instruments, uniforms
  • Expenses for study tours, project work, thesis, etc.
  • Approved boarding and lodging expenses

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 of the student 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 Bank Website:
  • Headquarters: Chennai, Tamil Nadu
  • Call Centre Toll-Free Number: 1800 425 00 000, 1800 425 4422