Indian Bank Skill Loan

About the Indian Bank Skill Loan

This education loan scheme is open to Indian students enrolled in NSQF-aligned or non-NSQF skill courses provided by recognised training institutions, including ITIs, Polytechnics, and other certified bodies. There’s no minimum course duration requirement to qualify for the education loan under the IOB-Skill-Loan scheme..

The loan supports flexible learning options and is especially useful when planning a child education plan. It helps ease the financial load by covering course fees and related expenses, making skill development more accessible.

Indian Bank Skill Loan Interest Rates

The interest rates under the Indian Bank education loan are linked to its internal benchmark rate. The applicable rate currently starts at 9.70% per annum, but may vary based on factors like loan amount, applicant profile, and repayment capacity.

Note: The above rate is based on the updated interest terms as of June 25, 2025, and is subject to change by RBI guidelines or internal lending policies.

Features of the Indian Bank Skill Loan

Here are the key features that make the Indian Bank Skill Loan a practical and student-friendly financing option:

• Loan Amount: ₹5,000 to ₹7.5 lakh, depending on course fees, duration, and associated expenses.

• No Collateral: The loan is extended without any collateral security or third-party guarantee, making it accessible for students from all financial backgrounds.

• Tax Benefits: Borrowers can avail of tax deductions under Section 80E of the Income Tax Act

• Moratorium Period: No EMI during the course and 6–12 months after. Paying interest during this period is optional.

• Coverage of Expenses: Besides tuition fees (paid directly to the institute), the loan covers exam fees, assessments, lab/library charges, caution deposit, books, equipment, and instruments. Boarding and lodging may be considered if necessary.

• Supports Financial Planning: Complements a child education allowance by funding job-oriented skill courses.

Eligibility for Indian Bank Skill Loan

To apply for the Indian Bank Skill Loan, the following criteria must be met:

• Citizenship: The applicant must be an Indian national.

• Course & Institution: The applicant must be enrolled in NSQF or non-NSQF skill courses offered by training entities. These courses are listed on the MSDE’s Skill India Digital Hub (SIDH), including ITIs, Polytechnics, recognised schools, colleges, and NSDC-affiliated partners.

• Age & Qualification: There is no specific age restriction. The applicant must meet the minimum qualifications required by the training institution.

• Co-Borrower Requirement: A parent, guardian, or spouse must be added as a co-borrower.

Documents Required for Indian Bank Skill Loan

Here’s the list of documents commonly needed to apply for the Indian Bank Skill Loan:

• Admission Letter: From a recognised skill training provider.

• Course Fee Structure: Detailed breakdown of the enrolled course’s fees.

• KYC Documents: Aadhaar and PAN for both the applicant and the co-borrower.

• Identity & Address Proof: Documents like Voter ID, Passport, etc.

• Educational Qualifications: Certificates from Class 10 onwards.

• Income Proof: This is of the parent or guardian, if requested by the bank.

Most Important Terms and Conditions

Let’s take a closer look at the key terms and conditions of the Indian Bank Skill Loan to keep in mind:

• Single Use Clause: The loan can be availed multiple times for progressively higher-level courses, but not for repeating the same level.

• Loan Tenure: The IOB-Skill-Loan repayment tenure, excluding the study and moratorium period, is up to 3 years for loans up to ₹50,000, 5 years for loans of ₹50,000 - ₹1,00,000, and 7 years for amounts above ₹1,00,000.

• Moratorium Benefit: No EMI is required during the course and up to 12 months after completion, giving time to secure employment.

• Discontinuation Clause: If the course is discontinued or the student is expelled, the loan becomes immediately repayable with applicable interest.

• Disbursement Timeline: Funds are released in stages based on the course fee structure and are paid directly to the training institution.

• Margin Requirement: A margin of 10% is applicable on the total loan amount.