Indian Overseas Bank Scholar Education Loan

Indian Overseas Bank Education Loan (IOB Scholar Loan) for Students Who Secured Admission Through Management Quota

This loan helps students who have gained admission into educational institutions for higher studies in India or abroad through Management Quota to pay for their course fees. The maximum loan amount that you can apply for is Rs. 50 lakh for studying in India and Rs. 60 lakh for studying abroad. Details are below.

Features of IOB Education Loan for Students Who Secured Admission Through Management Quota

Why this Loan?

  • The loan has been designed to cover all students who have been kept outside the purview of IOB’s other educational loan schemes that fall under the IBA Model Scheme
  • The loan is meant for you if you have gained admission into a graduate, postgraduate, PhD, professional or any other course in an educational institution in India or abroad through Management Quota
  • The bank disburses the Indian Overseas Bank IOB Scholar Education Loan as a series of payments over the required number of terms or years to pay the course fees or other approved charges
  • This loan is applicable for courses offered in India and abroad

Loan Amount

  • The maximum loan amount one can get for studying in India is Rs. 50 lakh and the maximum loan amount for studying abroad is Rs. 60 lakh


  • Loans Upto Rs. 7.5 Lakh: As of October 2020, the interest rate for this loan segment is the sum of the Repo Linked Lending Rate (RLLR) of 6.85% and a spread of 2.2% which makes the effective rate 9.05%
  • Loans Over Rs. 7.5 Lakh: As of October 2020, the interest rate for these loans is the sum of the RLLR (6.85%) and a spread of 3.2% which makes the effective rate 10.05%
  • The interest rate for children of Indian Overseas Bank’s employees applying for the IOB Scholar Loan is 8.75% as the spread is lower at 1.9%
  • The bank offers 1% interest concession if loan interest is serviced during the moratorium period of the loan


  • The repayment period for this loan is 15 years
  • The loan amount for each year is repayable in 12 equated monthly instalments, with the first instalment becoming due after the end of the moratorium period
  • The moratorium period for this loan is course duration +1 year or after getting a job, whichever is earlier
  • Simple interest is charged on the loan amount during the moratorium period

Security Needed

  • A tangible collateral such as immovable property, fixed income security, LIC policy, FD, etc. is mandatory to avail this loan
  • Assignment of future income of the student is required. This helps the bank in assessing the employability of the student after completing the course


  • The applicant must be an Indian national
  • The student must have gained admission into a recognised higher education course through Management Quota at a recognised educational institute in India or abroad
  • The student must have secured minimum cut off marks (60% for General and 55% for SC/ST) in their Class 12 or equivalent examination
  • Students gaining admission into a course with employability guaranteed on completion are also eligible for this loan

Eligible Courses

  • All accredited higher education courses in a recognised educational institute in India or abroad are eligible
  • Vocational or skill development courses that are outside the IBA Model Scheme are also eligible

Borrower Contribution to Total Cost (Margin Money)

  • 25% of total cost of the program must be paid upfront by the borrower before each loan disbursement

Note: Margin money refers to the amount the borrower contributes to the overall amount required. The bank covers the rest.

Processing and Other Charges

  • IOB charges a non-refundable fee of 0.5% of the loan amount as processing fees for the IOB Scholar Education Loan

Other Features to Know

  • The loan is disbursed directly to the school, book seller or publisher, computer seller, and so on and not to the applicant(s)
  • The bank may ask for the student’s progress report to be submitted with the bank at regular intervals
  • The applicant must pay applicable margin money upfront for each disbursement

Documents Needed

  • Application Form duly filled and signed by applicant and/or guarantor along with details of applicant and/or guarantor and family
  • A declaration/ affidavit from the borrower confirming that, no educational loans have been availed from other banks
  • 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 as proof of admission
  • 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: and (net banking)
  • Headquarters: Chennai, Tamil Nadu
  • Education Loan Number: 044-28519490, 044-28519639
  • Call Centre Toll-Free Number: 1800 425 4445