IOB Vidya Jyothi Education Loan Scheme: Features, Eligibility, Interest Rate

IOB Vidya Jyoti
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A frequently asked question is ‘ Are Indian Overseas Bank education loans a good option?’. Well, it’s a big yes. The bank offers a variety of six schemes to fit any student’s needs. The Vidya Jyothi education loan scheme and the IOB Scholar are two of the most popular schemes to study abroad.

The loans are provided at competitive interest rates and flexible repayment plans stretching up to 15 years. Let’s discuss the major details of the Indian Overseas Bank Vidya Jyothi education loan scheme to study abroad in this blog.

IOB Vidya Jyothi Education Loan Scheme: Major Highlights

IOB Vidya Jyothi education loan scheme is a loan scheme provided by Indian Overseas Bank to study abroad aspirants. The maximum loan amount provided under this scheme is up to INR 3 crores (subject to terms and conditions). The scheme aims to meet expenses like tuition fees, accommodation costs, and costs of books, exams and airfare.

Students can pursue any job-oriented and technical graduation, post-graduation, or diploma courses in recognised universities abroad. The scheme also aims to provide education loans for pilot training.

BasisDetails
Maximum Loan AmountUp to INR 3 crores
Interest Rates9% p.a. to 12% p.a.
Repayment Period180 months/ 15 years
Pre-payment ChargesNIL

Also Read: Check out all the details on IDFC First Bank EMI Payment for Education Loans. This blog will give you an insight into the modes of EMI payments of IDFC First Bank and how to make payments.

Quantum of Finance

It refers to the maximum amount of education loan that will be granted. IOB Vidya Jyothi education loans are provided up to INR 3 crores to study abroad. However, the exact amount will depend on factors like the rank of the university according to the websites of QS, Webometrics, and Top Universities

Ranks of University/ College/ InsituteMaximum Loan Amount
Within top 50Up to INR 3 crores
Ranked between 50 to 200Up to INR 2 crores
Ranked between 200 to 300Up to INR 1.5 crores
Ranked above 300Up to INR 1 crore

Repayment Period

The IOB Vidya Jyothi education loan scheme allows applicants to pay back the education loan for up to 15 years. This can be paid back in EMIs which allows easy repayment of principal and interest amount.

Margin Money

Margin Money refers to the amount of money that the borrower/ applicant has to contribute towards the loan amount. It is the difference between your loan amount requirement and what banks sanction. The IOB Vidya Jyothi education loan to study abroad margin requirements are-

Loan AmountMargin % of the Total Loan Amount Required
Up to INR 4 lakhsNIL
Between INR 4 lakhs to INR 30 lakhs15% 
Above INR 30 lakhs to INR 1 crore20%
Above INR 1 crore to INR 1.5 crore25%
Above INR 1.5 crores to INR 3 crores25%

Processing Time and Fee

The IOB education loan processing time is usually 15-20 days. Once, you submit the application form and attach the required documents, during this period, the bank will verify your documents. However, once the loan is sanctioned, it may take up to 72 hours to disburse funds to the university’s account. There are no charges for processing the IOB education loan.

Moratorium Period

The moratorium period for the Vidya Jyothi education loan scheme is the Course period + 1 year or 6 months after getting the job (whichever is earlier). During the Moratorium Period, the applicant is not required to make any payments towards the repayment of an education loan from the bank. This is also referred to as the holiday period.

Collateral Requirement

The applicants/ borrowers can avail of IOB education loans without collateral. However, for higher loan amounts, one is required to arrange valid collateral/ security.

Loan AmountSecurity Requirements
Up to INR 7.5 lakhsNo Security is Required. However, Co-obligation of parent/ guardian is needed.
Above INR 7.5 lakhsCo-obligation of parent/s or guardian together with tangible collateral security in the form of land/ building/ government securities policy/ shares/ gold/ debentures etc.

Eligible Courses to Study Abroad

The following courses are considered eligible to avail IOB Vidya Jyothi loan:

  • Courses as defined under various Government subsidy schemes
  • Graduation – For job-oriented professional/technical courses offered by reputed universities/ institutions.
  • Post-Graduation- MCA, MBA, MS, etc.
  • Courses conducted by CIMA London, CPA in the USA, etc.
  • Degree/diploma courses like aeronautical, pilot training, shipping, etc. provided these are recognized by competent regulatory bodies in India/ abroad for employment in India/abroad.

Also Read: Know all about the full form of NPA and check out what happens with NPAs when the borrowers of education loans stop making payments.

IOB Vidya Jyothi Education Loan Interest Rates

The IOB education loan interest rates are based on RLLR, which are floating rates of interest. For the Vidya Jyothi loan scheme, the interest rates range from 9% to 12%. They are calculated as the sum of the base rate and spread. The table below shows the effective Vidya Jyothi loan interest rates:

DetailsRate of InterestEffective ROI
For General CustomersRLLR + 0.40% (SP) + 1.25% (RP)11.00% p.a
For the wards of current staff and retired staffRLLR + 0.40% (SP)+ 0.00% (RP) 9.75% p.a

Interest Rate Concession

A special concession of 0.50% is provided for girl students. Besides, IOB also provides a concession on the following terms-

DetailsConcession Percentage
For serving interest during the moratorium period1.00%
For securing admission to institutes ranked up to 100 (study abroad)1.50%
For securing admission to institutes ranked from 101 to 2001.00%

Vidya Jyothi Loan Eligibility Criteria

To be able to apply for the IOB Vidya Jyothi education loan scheme, the applicant must be an Indian citizen. However, NRI (Non-Indian Resident), PIO (Person of Indian Origin) and OCI (Overseas Citizenship of India) are also eligible to apply. The applicants must also fulfil other eligibility criteria as discussed below-

  • The applicant should be an Indian citizen, NRI, PIO, or OCI.
  • Students must have secured admission to a recognised university abroad through an entrance examination or merit-based selection process after completion of HSC (class 12 or equivalent).
  • The applicant should not be in gainful employment during study, meaning that the student must not be in an employment situation where they receive steady work and payment from the employer.
  • Applicants without a Common Entrance Test (CET) need a minimum of 60% in their qualifying exam and 55% for SC/ST students.
  • In case of absent CET, admission factors like the type of course, applicant’s employment history, the institution’s reputation, and its ranking will be considered from the ‘Webometrics’ website used by the branches. Based, on this the loans will be granted accordingly.

Also Read: Did you know about tax benefits on interest paid on education loans? Check out the details on Income Tax Rebates on education loans under Section 80E of the Income Tax Act.

Documents Required

One is required to submit a list of documents while applying for an education loan. IOB Education loan documents required are related to identity and address proof, academics, and income proof. One is also required to documents after an education loan sanction from the bank. The checklist is provided below-

During Application

  • Duly Filled out the education loan application form
  • 2 passport-size photographs
  • Class X/ XII/ graduation mark sheet
  • Aadhaar Card/ Voter ID/ Passport/
  • Salary slips, Form 16, ITR for Salaried employees
  • P&L Statement, Balance Sheet, ITR, and Business evidence for Businessman

After Loan Sanction

  • Acceptance letter from the university
  • Language proficiency exam result
  • Accommodation fee breakup (on-campus accommodation)
  • Rent agreement documents (off-campus accommodation)
  • Estimate of approximate living costs like food, clothing, electronic gadgets, books, and other study materials
  • Approximate estimate of miscellaneous expenses including health insurance, travel costs, study aids, and incidental expenses. 
  • The self-attested final loan agreement
  • Disbursement request form signed by the applicant and co-applicant
  • Receipt of margin money paid to the college/university along with the bank statement reflecting the transaction
  • Original KYC documents for the student, co-applicant, and guarantor

Also Read: Check out our blog on Top-up Education for specialised programs. It includes details related to the process, eligibility, and repayment.

How to Apply for Vidya Jyothi Education Loan Online?

The borrowers can simply visit the nearest Indian Overseas Bank branch and connect with the bank representative. However, for a hassle-free application process, you can apply online for a Vidya Jyothi loan. This can be easily done through Vidya Laksmi Portal Indian Overseas Bank. Follow the given steps to apply for an IOB education loan-

Through Vidya Lakshmi Portal

  • Visit the official website of Vidya Lakshmi Portal.
  • Register yourself if you are not yet registered.
  • Log in by using the credentials created during the registration process.
  • Click on ‘Search and Apply for Loan Scheme’.
  • Search ‘Vidya Jyothi Education Loan Scheme’.
  • Click on ‘Apply’ and ‘Fill the Application Form’.
  • Fill in the required details.
  • The concerned bank personnel will connect for further process.

This was all about the Vidya Jyothi education loan scheme of the Indian Overseas Bank. Make sure to check the interest rates, and repayment period, and plan your education loan in a way that ensures hassle-free repayment to the banks.

FAQs

What is the Vidya Jyothi education loan scheme?

Vidya Jyothi education loan scheme is the financial support provided by Indian Overseas Bank to study abroad aspirants. The maximum loan amount provided under this scheme is up to INR 3 crores.

What are the interest rates in the IOB Vidya Jyothi education loan scheme?

Vidya Jyothi loan scheme interest rates range from 9% to 12%. For public, interest rates are RLLR + 0.40% (SP) + 1.25% (RP) = 11.00% p.a and for the wards of staff and retired staff, applicable rates are RLLR + 0.40% (SP)+ 0.00% (RP) = 9.75% p.a.

Who is eligible for the IOB Vidya Jyothi education loan scheme?

To be able to apply for the IOB Vidya Jyothi education loan scheme, the applicant must be an Indian citizen. Besides, students must have secured admission to a recognised university abroad through an entrance examination or merit-based selection process.

What expenses are covered under the Vidya Jyothi loan to study abroad?

The scheme aims to meet educational expenses. Expenses like tuition fees, accommodation costs, and costs of books, exams and airfare.

What is Vidya Jyothi’s maximum education loan amount?

IOB Vidya Jyothi education loans are provided up to INR 3 crores to study abroad. However, the exact amount will depend on factors like the rank of the university according to the websites of QS, Webometrics, and Top Universities.

Do I have to arrange margin money for the Vidya Jyothi education loan scheme?

Yes, the applicant is required to arrange a margin of 15% to 25% of the total loan amount. The exact percentage depends on the amount of loan taken from IOB.

How can I apply for a Vidya Jyothi education loan online?

The borrowers can simply visit the nearest Indian Overseas Bank branch and connect with the bank representative. However, for a hassle-free application process, you can apply online for a Vidya Jyothi loan. This can be easily done through Vidya Laksmi Portal Indian Overseas Bank.

Do I get an interest concession on the Vidya Jyothi loan?

Yes, female students get a special concession of 0.50%. Applicants who serve interest during the moratorium period get a concession of 1%. Meritorious students also get a concession of 1.50% who secure admission among the top 100 universities to study abroad.

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 Shubhika Garg

Hey there! I'm Shubhika- a proud graduate in English Literature and Language from Delhi University. My journey as a content writer transitioned from online teacher into the world of words. Stepping into the domain of blogs and articles, I discovered my passion for writing growing deeper and stronger. Having said that, I have experience of writing for diverse industries in automobile, technology, ed-tech, finance and mental-health; crafting details to help you find the solution to what you are looking for. Join me as I invite you all explore and learn together.

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