IOB Vidya Suraksha

About IOB-Vidya-Suraksha Scheme

The IOB-Vidya-Suraksha education loan is meant to finance students who have acquired admission on merit or through an entrance examination to higher education in India or abroad. This innovative funding guarantees the child's future education by giving financial assistance with an in-built guarantee system to cover partial defaults. This education loan, like the other Indian Overseas Bank education loans, can also be scheduled to fit into the long-term vision of a parent to educate their child.

IOB Vidya Suraksha – Rates of Interest

The IOB Vidya Suraksha education loan follows a floating interest rate structure, currently set at RLLR + 1.65%, which comes to approximately 10.50%. However, interest rates are subject to revision from time to time.

Note: The rates are updated per Indian Overseas Bank’s latest terms as of 12 June 2025. These may change based on RBI Repo Rate movements or bank lending policy updates.

Features of the IOB Vidya Suraksha Scheme

Here are the features of the IOB Vidya Suraksha Scheme:

• Nil Processing Fees: IOB charges no processing fees for this scheme, except a minimal Vidyalakshmi portal fee.
• Extended Moratorium Period: The moratorium covers the course duration plus one additional year.
• Flexible Repayment: The repayment tenure is up to 15 years, offering students enough time to repay comfortably.
• Coverage Under Credit Guarantee: 75% of the loan amount is guaranteed in case of default, ensuring risk-sharing by the bank.

Student financing can work alongside your child investment plan to ensure comprehensive financial security for higher studies.

Eligibility Criteria for IOB Vidya Suraksha Scheme

The eligibility criteria of the IOB Vidya Suraksha Scheme are as follows:

• Admission Through Merit or Entrance: Students must have secured admission through a recognised merit or entrance exam.
• Courses Covered: Higher education courses in India and abroad are eligible under this scheme.
• Loan History Requirement: Students availing benefits under any other government scheme are not eligible.
• Maximum Extension for Delayed Course Completion: The loan allows a two-year extension if the course is delayed.

IOB’s offering may also be explored by families budgeting with child education allowance benefits or planning to study abroad.

Documents Required for the IOB Vidya Suraksha Scheme

To apply for the IOB Vidya Suraksha Scheme, the documents listed below are needed:

• Admission Letter from Institution: Official letter confirming student’s admission to the approved course.
• Academic Certificates and Mark Sheets: Mark sheets and certificates from previous qualifying exams.
• PAN and Aadhaar of Student and Co-applicant: Valid PAN and Aadhaar for both the student and the co-applicant.
• Fee Structure from the Institute: A Detailed fee structure issued by the educational institution.
• Proof of Admission (Entrance Exam or Merit List): Admission proof through entrance test score or merit list.
• Income Proof of Parent/Guardian (If Applicable): Salary slips or ITR of parent/guardian, if needed.

Most Important Terms and Conditions 

Here are the most important terms and conditions of the IOB Vidya Suraksha Scheme:

• Margin Requirement: The margin requirement is 0% for loan amounts up to ₹4 lakhs. For amounts exceeding ₹4 lakhs, it is 5% for courses in India and 15% for courses abroad.
• Annual Guarantee Fee: The prevailing rate of 0.50% is charged annually, but is not to be paid by the borrower; the IOB pays it.
• Loan Default Coverage: The bank has 75% loan default coverage secured through an internal guaranteeing system
• Invocation of guarantee: The guarantee will become effective within one year of the loan being declared as an NPA (non-performing asset).

You can look at the current interest rates and compare them against each other with an online income tax calculator to get a glimpse of how you will be affected by repayment.