IOB-Skill-Loan

About the IOB-Skill-Loan

The IOB-Skill-Loan is available to Indian students in skill development programs aligned with the National Skill Qualification Framework (NSQF). These government-recognised courses, eligible for an education loan, are usually offered by institutions approved by the NSDC, Sector Skill Councils, or State Skill Missions.

This education loan supports all NSQF-certified training, from basic to advanced levels. Parents and guardians looking to build a child education plan may find this loan helpful in covering short-term course costs without compromising future goals.

IOB-Skill-Loan Interest Rates

The interest rate for the IOB-Skill-Loan is linked to Indian Overseas Bank’s benchmark lending rate and may vary based on the loan amount and the applicant's profile. As of now, the applicable interest rate is 10.85% per annum.

Note: Interest rates mentioned are indicative as of 25 June 2025 and may change based on RBI policies or internal bank revisions.

Features of the IOB-Skill-Loan

Here’s what makes the Indian Overseas Bank education loan under the IOB-Skill-Loan Scheme a useful option for skill-based education:

• Quantum of loan: Ranges from ₹5,000 to ₹7.5 lakh, depending on the course and duration.
• Security: No collateral or third-party guarantee is required for the IOB-Skill-Loan, making it easily accessible to students from low or middle-income families.
• Short-Term Courses Covered: Ideal for diploma, certificate, or modular training programs.
• Processing & Prepayment Charges: There are no charges for processing or early repayment of the IOB-Skill-Loan, ensuring that students can manage their loans without additional fees.
• Tax Benefits: Borrowers can avail of tax deductions under Section 80E of the Income Tax Act.
• Supports Financial Planning: Complements a child education allowance by funding job-oriented skill courses.

Eligibility for IOB-Skill-Loan

To apply for this Indian Overseas Bank education loan, the student must meet the following eligibility criteria:

• Citizenship: Applicant must be an Indian citizen.
• Age Limit: No specific age restriction applies to be eligible for the skill loan.
• Co-Borrower Requirement: The co-borrower must be a parent or guardian. For married applicants, the co-borrower can be the spouse or parents-in-law.

Documents Required for IOB-Skill-Loan

Here’s the list of documents commonly needed to apply for the IOB-Skill-Loan:

• Admission Proof: An admission letter from a recognised skill training provider.
• Course Fee Details: The Official fee structure issued by the institution.
• KYC Documents: Aadhaar, PAN, etc., for both applicant and co-borrower.
• Identity & Address Proof: Valid government-issued documents.
• Educational Certificates: Marksheets from Class 10 onwards.
• Income Proof: Required if specified, for parent or guardian

Most Important Terms and Conditions

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

• Single Use Clause: The loan can be availed multiple times for progressively higher-level NSQF courses, but not for repeating the same level. Plan your skill path carefully to maximise the benefits.
• Loan Tenure: Repayment tenure is up to 3 years for loans up to ₹50,000, 5 years for loans of ₹50,001–₹1,00,000, and 7 years for amounts above ₹1,00,000.
• Moratorium Benefit: No EMI is required during the course and six months after completion, allowing students time to secure employment before repayment begins.
• Margin Requirement: A margin of 5% on the total course cost must be contributed by the borrower.
• Discontinuation Clause: If the student discontinues the course or is expelled, any subsidy (if applicable) is revoked, and the loan becomes repayable with full interest.
• Disbursement Timeline: Loan disbursement is made in phases per the course fee schedule, and the amount is generally credited directly to the training institution.