Indian Overseas Bank Educational-Loan-IOB-Vidya-Shrest

About the IOB-Vidya-Shrest Scheme

The IOB-Vidya-Shrest scheme is a specialised education loan that caters to students who have secured admission into top-tier Indian institutions like IITs, IIMs, NITs, and other recognised universities based on merit or entrance examinations. This education loan provides comprehensive financial support to cover tuition, hostel, exam fees, books, and other education-related expenses.

This scheme is ideal for families building a child investment plan, helping reduce financial pressure during key academic years. It also aligns with government interest subsidy benefits and supports structured academic financing through a child education allowance approach.

IOB-Vidya-Shrest Interest Rates

Interest rates under the IOB-Vidya-Shrest scheme are linked to IOB’s Repo Linked Lending Rate (RLLR) and vary based on the loan amount.

• A-Rated Institutions: RLLR – 0.60% = 8.25%
• B-Rated Institutions: RLLR – 0.35% = 8.50%

Note: Rates are updated per IOB’s latest policy as of 25 June 2025. They are subject to change based on RBI updates and internal bank policy.

Features of the IOB-Vidya-Shrest Scheme

Here’s what makes the Indian Overseas Bank Education Loan under the IOB-Vidya-Shrest Scheme a strong choice for students:

• Loan Amount: Finance available up to ₹150 lakh for List A institutions and up to ₹30 lakh for List B institutions.
• Flexible Repayment: Standard moratorium is the course duration + 1 year. Up to 2 years extra if starting a business, with quarterly plan reviews for unsecured loans.
• Interest Concession: 1% concession if interest is paid during the moratorium period.
• Covers Premier Institutions: Specially designed for institution admission through national-level merit or entrance exams.
• Future-Ready Support: Complements a child education plan or a structured child investment plan.
• Tax Benefits: Interest repayment qualifies for deduction under Section 80E of the Income Tax.

Eligibility for the IOB-Vidya-Shrest Scheme

To be eligible under the IOB-Vidya-Shrest education loan:

Applicant Requirement:

• Nationality: Applicant must be an Indian citizen.
• Course Type: Only full-time degree/diploma programs and executive management courses like PGPX are eligible. Part-time or certificate courses are not covered.
• Admission Basis: Admission must be secured through an entrance test or a formal selection process.
• Institution Type: Students must be admitted to a select list of premier Indian institutions approved by statutory bodies.

Co-obligator Requirement:

• Parental Co-obligation Required: A parent or guardian must co-sign the education loan as a co-obligant.
• Spouse or In-laws as Co-obligants: For married applicants, the spouse or in-laws can serve as co-obligants.
• Third-party Guarantee Option: A third-party guarantor may replace the parental co-obligation if necessary.

Documents Required for IOB-Vidya-Shrest

Make sure you have these documents ready when applying for the IOB-Vidya-Shrest Education Loan Scheme:

• Student Identity & Address Proof: Aadhaar, Voter ID, Passport, etc., as per KYC norms.
• Academic Records: Mark sheets of Class 10, 12, and qualifying exams.
• Admission Letter: Offer letter from a recognised institution.
• Cost of Study: Fee structure and schedule of expenses from the institution.
• Co-applicant KYC: Provide proof of identity/address from the parent or guardian.
• Co-applicant PAN Card: Mandatory before the first loan disbursement.
• Income Proof of Co-applicant: Salary slips, ITR, or Form 16.

Most Important Terms and Conditions

Key terms to keep in mind under the IOB-Vidya-Shrest Education Loan Scheme:

• Loan Margin: No margin is required under this scheme.
• Collateral Requirement: 100% collateral required. Acceptable forms include land/building with a clear title or liquid securities such as LIC policies, NSC, KVP, term deposits, or Sovereign Gold Bonds.
• Life Insurance Cover (For Unsecured Loans): Loans above ₹7.5 lakh and up to ₹40 lakh (List A) or ₹30 lakh (List B) can be availed without collateral if covered under a valid life insurance policy. Existing policies equal to the loan amount are accepted if assigned to the bank.
• Subsidy Eligibility: Eligible for Central Sector Interest Subsidy (CSIS) under the IBA Model Education Loan Scheme.