IOB Education Loan Interest Rate: Check for all Schemes

IOB Education Loan Interest Rate

IOB is a major public-sector bank in India that offers education loans to study abroad. The loan policy is based upon the IBA’s model education loan scheme and the interest rate is also determined based on the same model. The loan is provided under two major schemes for study abroad i.e. IOB Scholar Education Loan and IOB Vidyajyoti Education Loan.

IOB education loan interest rate depends on many factors like the amount of loan, repayment period, credit history etc. The bank offers up to INR 7.5 lakh education loans without collateral to study abroad at an affordable rate of interest. Let’s check all the details on the IOB education loan interest rate.

What is the IOB Education Loan Interest Rate?

IOB education loan interest rate is provided at an interest rate ranging between 9% to 12% for the Vidyajyoti scheme. The interest rate is determined considering the base rate and the spread. The bank also provides some rebates on interest rates to wards for bank employees and retired staff. Under the IOB scholar education loan scheme, the interest rate varies between 11% to 13%. You should always check the interest rate before initiating the IOB Education Loan disbursement process. Check more details below:

  • The interest rate can vary based on the amount of the loan and the income of the co-applicant
  • Usually, the bank offers low-interest rates on education loans above INR 7.5 lakhs. The interest rate for a lower amount may attract slightly higher interest
  • The interest rate on education loans also depends on the university and the course selected by the student

Also Read: Applying for a loan from IOB? Check this and know about the IOB Education Loan Documents Required

IOB Scholar Education Loan Interest Rate

The bank offers education loans to study abroad under its IOB Scholar loan scheme. The maximum loan amount for study abroad is INR 60 lakhs with margin money of 25% that will be charged irrespective of the loan amount. Any student who is above 18 years of age and wants to pursue a UG or PG course from an approved university abroad can get an IOB Scholar loan. Check the interest rate of an IOB Education Loan under the scholar loan scheme:

Loan Amount (INR)SpreadEffective Interest Rate
Up to INR 7.5 lakhsRLLR + 2.20%11.55%
Above 7.5 lakhs to 60 lakhsRLLR + 3.20%12.55%
Iob Scholar To Staff Ward up to INR 60 LakhsRLLR + 1.90%11.25%

IOB Vidyajyoti Education Loan Interest Rate

IOB Vidyajyoti education loan is offered by Indian Overseas Bank to students who want to study abroad in a foreign university. The maximum loan amount under this scheme is INR 50 lakhs and the minimum amount is INR 7.5 lakhs. The bank also implements 15% margin money for study abroad loans under the Vidyajyothi scheme. Check the IOB Vidyajyoti education loan interest rate below:

CategorySpreadEffective Interest Rate
For all amount to general customersRLLR +1.65%11%
Interest Rate for Wards of Staff and Retired StaffRLLR + 0.40%9.75%

IOB Education Loan: Concessions on Interest Rate

Indian Overseas Bank provides certain concessions on the interest rate for education loans. The concessions are provided to employees, retired employees, female students etc. Check the details of concession under various categories for IOB education loans to study abroad:

CategoryConcession
Female Students0.50%
Interest Services During Moratorium1%
Wards of Staff and Retired Staff1.25%
Top 100 International Institutes1.50%
Top 101 to 200 International Institutes1%

Also Read: Want an unsecured study loan? Check here all about IOB Education Loan without Collateral

Factors Affecting Interest Rate on Loans

The interest rate on education loans is determined by a lot of factors such as the guidelines of RBI on education loans, economic factors, credit history and score of the applicant, type of institution and course selected, loan amount, repayment period etc. Check details on some of the common factors impacting the education loan.

Credit Score of the Borrower

The credit score of the individual applying for an education loan is a major factor affecting the interest rate. A higher credit score indicates a lower credit risk for the bank/lender, leading to a better chance of securing a lower interest rate. Lenders offer rebates on interest rates to borrowers with a strong credit history, as it reflects their financial responsibility and ability to repay the loan.

Type of Education and Institution

The type of educational program and the institution where the student wants to study also play a role in determining the interest rate. Loans for courses with high job prospects and earning potential may attract lower interest rates. Also, prestigious institutions or those with a proven track record may result in lower interest rates compared to lesser-known or average universities. Lenders often assess the risk associated with the chosen course and institution before setting the interest rate.

Loan Amount and Repayment Tenure

The loan amount and the repayment period over which it is repaid can impact the interest rate. Generally, larger loan amounts might lead to higher interest rates and longer repayment tenures may result in a higher overall interest cost, as the lender is taking on a greater risk over an extended period. However, for amounts above INR 7.5 lakhs to a certain limit, the public sector banks offer lesser interest rates. Check and compare the schemes before finalising the loan.

Economic Conditions and Regulatory Policies

The ongoing economic conditions and regulatory policies of the Reserve Bank of India (RBI) can directly impact the education loan interest rates. Changes in the overall economic conditions, inflation rates, and central bank policies can affect the cost of borrowing. Moreover, government initiatives and regulatory changes aimed at promoting education or easing financial burdens on students may impact interest rates and it may be secured at lesser rates in such cases.

FAQs

What is the current interest rate for IOB education loans for Indian students studying abroad?

IOB Education loan interest rates vary between 9% to 13% depending on factors such as credit score, loan amount and repayment period.

How is the interest rate on IOB education loans determined for Indian students studying abroad?

The bank considers factors such as the co-applicant’s credit score, the course and university selected, loan amount, and repayment tenure. The effective rate of interest is then calculated by adding the spread determined to the RLLR.

Are there any specific schemes or concessions for certain categories of students in IOB’s education loan interest rates?

Indian Overseas Bank provides a rebate of 0.5% to 1.5% to female students and wards of IOB employees and retired employees.

Can students opt for a fixed or floating interest rate on education loans from IOB?

IOB offers both fixed and floating interest rate options. You can choose between the two based on your preferences and risk tolerance. However, it is not guaranteed that the bank will implement the interest rates category as requested by the borrower and it totally depends on the bank’s internal policy.

Are there any penalties for prepayment of IOB education loans, and how does it affect the overall interest paid?

If you are foreclosing the education loan, the bank will waive the interest rate on the net due amount. Also, the is no early repayment charge on education loans.

This was all about the IOB education loan interest rate for various loan schemes. Always compare the terms and conditions of the different schemes of education loans before finalising the loan.

To know more about education loans, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.

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About Shekhar Suman

Shekhar is a versatile writer with a passion for sharing knowledge and creativity. With expertise in crafting informative blogs on study abroad and finance, Shekhar helps readers navigate the complexities of education and financial planning. Most of his writings blend the practicality of finance and the beauty of language, making a meaningful impact in both spheres. Beyond his professional pursuits, he finds solace in the writing Shayari.

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