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Indian Bank Education Loan

Last Modified : June 27, 2018

Indian Bank has launched multiple distinct schemes viz. IBA Model Education Loan Scheme, IB Education loan prime, and IB Skill Loan Scheme. The bank also provides Indian Bank Education Loan for Abroad to meritorious students who wish to pursue their studies overseas.

There are various formalities and pre-requisites tagged with Education Loan for India and Abroad such as proper documentation, co-signer, and other eligibility requirements. You can apply for Indian Bank Education Loan through Vidyalakshmi Portal.

Why Indian Bank?

Customised variety of education loans to choose from makes Indian Bank one of the preferred banks. The interest rate charged is 12.50% on all amounts. Flexible repayment terms and user-friendly services is another key criteria for students to choose Indian Bank

Are you eligible for Indian Bank Education Loan?

  • Indian Citizen. A student must be a resident of India or be in possession of Indian passport
  • 10+2 Pass. Qualifying 12th examination with nearly 60% marks is mandatory
  • Eligible Institute. You must have secured admission in an institute approved by the bank.
  • Eligible course. The course you opt for should be approved by bank under some education loan scheme.

1. IBA Model Education Loan Scheme

The scheme is launched by Indian Bank to extend financial assistance to deserving and meritorious students who wish to pursue higher education in India. Indian Bank offers loan with flexible repayment terms with repayment period to start after student is fully employed.
What makes you eligible for IBA Model Education Loan Scheme?

  • Indian National
  • Graduation/ Post Graduation/ Diploma courses 
  • Qualified required course with essential grades

Present Rate of Interest

Interest Rate for all amounts is 12.50% per annum

Quick Facts about IBA Model Education Loan Scheme


Upto INR 4 Lacs: Nil

Above INR 4 lacs: 5%


Maximum Loan Limit

INR 10 Lacs


Less than INR 4 Lacs: No Collateral required

From INR 4 to 7.5 Lacs: Guarantee of bank approved third party

Above INR 7.5 Lacs: Collateral Security equal to amount of loan

Assignment of students future salary towards the bank 

Moratorium Period

Course Period + 1 year

Repayment (Maximum)

Repayment of the loan can be done after the moratorium period by mode of EMI

Upto INR 7.5 Lacs: 10 years

Above INR 7.5 Lacs: 15 years

Prepayment Charges


Additional facts about IBA Model Education Loan Scheme

  • Zero Margin for Loan upto INR 4 Lacs
  • No collateral for Loan upto INR 4 Lacs
  • Loan is sanctioned conjointly to the applicant and his/ her guardian
  • 0.50% concession to girl students

Expenses covered under IBA Model Education Loan Scheme

  • Tuition Fee
  • Examination Fee
  • Hostel Fee
  • Lab/ Library Fee
  • Cost of Books, equipment, instrument or uniforms
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)

Courses Covered under IBA Model Education Loan Scheme

  • Graduation, Post- Graduation or Doctorate courses
  • Professional Courses including Medical, Law, Dental, etc.
  • Courses that are offered by reputed foreign universities in India
  • Regular/ Evening Courses conducted by colleges/ universities approved by UGC/ Government/ AICTE/ AIBMS/ ICMR etc.
  • Degree/ Diploma courses in Teacher Training, Nursing, B.Ed

Documents required for IBA Model Education Loan Scheme

  • Identity Proof: Passport, Voter’s ID, Driving Licence or PAN Card
  • Mark sheet of recently qualified public exam for school, college in India
  • Admission Proof: Fee receipts, Transfer certificate, etc.
  • Schedule of expenses for the course
  • Community Certificate
  • Two recent passport size photographs of applicant, co-applicant and guarantor
  • Educational Proof: copy of admission letter along with fee structure, mark sheets, SSC, HSC and degree course certificates
  • Salary Proof: Latest salary slip, Form 16 and recent salary certificate

2. IB Skill Loan Scheme

Indian Bank launched IB Skill Loan Scheme for students who wish to pursue studies in courses that enhance their skills and prepare them for employment opportunities ahead. The Scheme is offered with maximum benefits to promote skill-based education with no financial constraints.

Eligibility to avail IB Skill Loan Scheme

  • Indian National
  • Course offered by Industrial Training Institutes (ITIs), Polytechnics recognized by State/ Central Boards 
  • Entrance Exam/ Merit-Based admission

Quick Facts about ID Skill Loan Scheme



Maximum Loan Limit

INR 1,50,000


No collateral or security is required

Moratorium Period

Course duration upto  1 year: Course period+6 months

Course duration above 1 year: Course period+12 months

Repayment (Maximum)

Loan upto 50,000: 3 years

Loan between 50,000 to 1 Lac: 5 years

Loan above 1 Lac: 7 years

Prepayment Charges


Courses Covered under IB Skill Loan Scheme

  • Courses recognized by:
  • Industrial Training Institutes (ITIs)
  • Polytechnics Institutes
  • School recognized by Central or State Education Boards
  • College affiliated to recognized university
  • Training partners affiliated to National Skill Development Corporation (NSDC), Sector Skill Councils, State Skill Mission, and State Skill Corporation
  • Courses leading to a certificate / diploma/degree issued by such organization as per National Skill Qualification Framework (NSQF)

Expenses Covered under IB Skill Loan Scheme

  • Tuition Fee
  • Examination Fee
  • Hostel Fee
  • Lab/ Library Fee
  • Cost of Books, equipment, instrument or uniforms
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Insurance Premium for Student borrower

3. IB Education Loan Prime

IB Education Loan prime is education loan scheme offered by Indian Bank to provide financial support to students who wish to pursue higher studies in premier Institutes in India. The loan is sanctioned to students who secure admission to institutes that fall under List A and List B approved by Indian Bank (List A and List B is mentioned below)

What makes you eligible for IB Education Loan Prime?

  • Indian National
  • Graduation/ Post Graduation/ Diploma courses in any institute mentioned in List A or List B.
  • Qualified required course with essential grades

Present Rate of Interest

Category of Educational Institution

Collateral Free Loan Amount upto

List A

1 year MCLR + 8.50%

List B

1 year MCLR + 9.10%

Quick Facts about IB Education Loan Prime



Maximum Loan Limit

List A: INR 30 Lacs (INR 35 Lacs for ISB only)

List B:  INR 7.50 Lacs


List A: Upto INR 30 Lacs - No collateral or security is required

Above INR 30 Lacs: tangible collateral security with market value equal to loan limit

List B: Upto INR 7.50 Lacs - No collateral or security is required

Above INR 7.50 Lacs: tangible collateral security with market value equal to loan limit


Moratorium Period

Course period + 6 months

Repayment (Maximum)

15 years

Prepayment Charges


Expenses Covered under IB Education Loan Scheme

  • Tuition Fee
  • Examination Fee
  • Hostel Fee
  • Lab/ Library Fee
  • Cost of Books, equipment, instrument or uniforms
  • Miscellaneous expenses- study tours, project work, thesis, etc.
  • Reasonable cost of computer or laptop (if required)
  • Caution Deposit
  • Insurance Premium for Student borrower

Documents required under IB Education Loan Scheme

  • Duly filled IB Application Form
  • Identify proof and Age proof
  • PAN Card (borrower and co-borrower)
  • Residence Proof
  • Income Proof of parents/ guardians along with income tax statement of last 2 years
  • Copy of prospectus of the institute to calculate total expenses
  • Mark sheets of last qualifying examination
  • Admission confirmation letter 
  • Scholarship Details (if any)
  • 6 months bank statements
  • 4 photographs
  • Details of all existing loans

Institutes that come under ‘List A’Click Here

Institutes that come under ‘List B’Click Here

Central Sector Scheme of Interest Subsidy (CSIS)

This scheme is specially formulated for economically weaker sections and to promote education amongst them. The scheme is available for students pursuing approved professional course from Institute or University in India. HRD Ministry, Government of India to extend financial support to deserving and meritorious students in need.

Key points of CSIS

  • Applicable only for courses offered in India
  • Available only once either for undergraduate/ postgraduate/diploma courses.
  • Student must not be already enrolled in recognized professional courses after XII in institutes established by acts of parliament
  • Annual gross family income should not exceed INR 4.5 Lacs
  • Interest subsidy is available upto moratorium period (Course Period+1 year)

Courses Covered under CSIS

Undergraduate and Post Graduate courses in:

  • Engineering
  • Medical
  • Para-Medical
  • Agriculture
  • Veterinary
  • Law
  • Dental
  • Management
  • Computer Science

Post Graduate Diploma approved by AICTE/ UGC


Q. What schemes does Indian Bank considers for its education loans?

Answer: There are multiple other schemes offered by Indian Bank apart from the basic education loans. These are:

  • CSIS Scheme
  • Padho Pardesh

Q. In whose name is the loan granted?

Answer: The loan is granted in the name of the student

Q. Is the loan contract executed only in student’s name?

Answer: No, the loan can be executed both in name of student and co-borrower as both are equally responsible for repayment of loan.

Q. What is the age limit for availing loan in Indian Bank?

Answer: The age limit at time of enrolment is 16 to 50 years. Borrower should be maximum 60 years at time of maturity, beyond that the loan tenure will automatically end.

Q. Are minors eligible to apply for Indian Bank Education Loan?

Answer: Yes, Minors aspiring for further studies can apply for education loan with help of legal representation from parents/ guardians.

Q. What does margin on any loan mean?

Answer: Margin amount is the amount that a borrower has to pay through his/ her own sources in form of a down payment as his/ her contribution towards the education.

Q. Should the student’s margin be paid upfront in the starting?

Answer: Margin can be paid on a year to year pro rata basis whenever bank disburses loan amount as per requirement.

Q. Where can I avail Indian Bank Education Loan?

Answer: You can either contact your nearest branch for the application form or details regarding the loan or apply online from the official website.

Q. Is there any provision to apply for loan online?

Answer: : Yes, you can apply online through Vidyalakshmi portal to avail for this loan.

Q. Can I view my loan statement online if I am an existing education loan borrower?

Answer: Yes, by creating a login on Indian Bank web portal, you can view all details related to education loan online.

Q. Is there any minimum aggregate marks to meet the eligibility criteria to avail Indian Bank education loan?

Answer: Yes, a student must have secured a minimum aggregate marks in their last qualifying examination (10+2 or Graduation). Relaxation in the marks is given to SC/ ST students

Q. What is the discount/ rebate offered by Indian Bank?


  • 0.50% concession is given to girl students
  • Eligibility criteria and margin on education loan is relaxed for SC/ST students

Q. What all is included in tangible collateral security?

Answer: Mostly Indian Bank asks tangible security in lieu of the loan amount sanctioned along with assignment of future salaries in favour of Indian Bank. Tangible security includes documents related to land/ building/ government security/ public sector bonds/ units of UTI, NSC, Life insurance policy/ bank deposits/ shares or debentures. The value of the security should be equal to the education loan amount.

Q. Can I place my family property as collateral?

Answer: Yes, but it will need consent of all family members involved.

Q. Is scholarship or assistantship included in the margin?

Answer: Yes any scholarship or assistantship will be a part of margin charged on education loan.

Q. What is Moratorium Period?

Answer: Course Period plus one year, or six months after getting a job

Q. What is tenure of an education loan?

Answer: Tenure of education loan provided by Indian Bank is maximum 15 years and for IB Skill Loan Scheme, the tenure is 7 years

Q. What does MCLR stands for?

Answer: MCLR stands for Marginal Cost of funds based Lending Rate. It refers to the minimum interest rate of bank below which it cannot lend.

Q. What all expenses are covered under this course?

Answer: Expenses covered by Indian Bank education loan are:

  • Tuition/ college/ hostel fee
  • Examination/ lab/ library fee
  • Books/ uniform/ instruments
  • Caution deposit
  • Passage money for studies abroad, etc.

Q. I have taken admission through management quota. Am I eligible?

Answer: This depends totally on bank’s discretion as whether a student meets other eligibility criteria or not.

Q. What do you mean by reputed or recognized institutes?

Answer: Institutes that are affiliated to state/ central universities and comes under UGC or AICTE are considered as recognized institutes. Reputed institutes are those which are well known and have standard course of repute. More often, banks provide the list of institutes they consider for loan. (You can contact nearest branch for the same)

Q. Are there any special benefits if I have secured admission to one of the top premier institutes?

Answer: Indian Bank provides no concession to students who have secured admission in any premier institutes.

Q. What is the processing fee or prepayment charges?

Answer: The education loan offered by Indian Bank have no prepayment charges and processing fee implied is INR 300 per application.

Q. Will cost of my computer be covered under the loan sanctioned?

Answer: Reasonable cost for the computer or laptop well be covered under the loan if it is required to complete the course. 

Q. Why is Pan Card necessary?

Answer: Pan Card is one of the mandatory document required by banks these days. It is mandatory because:

  • Easy to assess Income
  • Easy to trace borrowers

Q. Are diploma or certificate courses considered under Indian Bank education Loan (both for India and Abroad)?

Answer: Diploma courses are eligible under Indian Bank Education Loan. Regular degree or diploma courses like, shipping, pilot training, and aeronautical that are approved by Director General of Civil Aviation or Shipping.

Q. Is a co-borrower necessary for loan?

Answer: Yes, it is mandatory to have a co-borrower to avail loan from Indian Bank.  

Q. Who can be my co-borrower?

Answer: Your parent/ spouse/ guardian can be a co-borrower. A co-borrower should be your immediate family member, should have a steady source of income, and a good credit history.

Q. What all documents are required from the co-borrower?

Answer: Documents required from the co-borrower are:

  • Attested copies of age proof, residence proof and birth date.
  • Self-attested passport size photograph
  • Income proof and/or copy of income tax return file
  • Details of collateral security along with government approved valuation certificate (if any).

Q. How many guarantors do I need to borrow loan from Indian Bank?

Answer: You need at least 2 guarantors to avail loan from Indian Bank.

Q. What is the KYC requirement in education loan?

Answer: KYC requirements are the documents as a proof of personal identification and residence proof of the applicant as well as the co-borrower.

Q. What are maximum term for repayment?


  • IBA Model Education Loan Scheme: Loan amount upto INR 7.5 Lacs: 10 years; Loan amount above INR 7.5 Lacs: 15 years
  • IB Skill Loan Scheme: 7 years
  • IB Education Loan Prime: 15 years

Q.  How can I repay the loan?

Answer: You can repay the loan after the moratorium period by mode of EMI or through post- dated cheques.

Q. What is EMI? How are they calculated?

Answer: EMI stands for Equated Monthly Installments. It can be calculated by using the formula given below

  • EMI = [P x R x (1+R) ^n] / [(1+R)^ n-1]
  • Here, P is Amount of Education Loan, R is Rate of Interest, n is Tenure of the Loan.
  • Or simply you can use the EMI calculator provision available on Indian Bank’s official website.

Q. What are the charges for late EMI payment?

Answer: 24% per annum on outstanding amount is charged for the late EMI payment and INR 500 for every bounced cheque.

Q. Is the loan disbursed in name of individual applicant or to the institute/ university directly?

Answer: The loan is disbursed directly to the institute/ university that you have taken admission to. Hence, an applicant is supposed to submit institute brochure with proper division of the fee

Q. If I am unable to complete my course in given tenure, will my repayment term be extended?

Answer: It is completely on the banks discretion to extend the moratorium period or not. It can be extended for maximum 2 years based on student’s reason. You can contact your nearest branch for more details.  

Q. What is method of application of interest on education loan?

Answer: The interest will be charged at simple rate from the date of disbursement till commencement of repayment of loan. After that, compound interest is charged on reducing balance. 

Q. If I am joining the course soon after current course, can I get an extension?

Answer: Mostly, in such cases, you do not get an extension and even if you do there is a possibility that interest rates are higher

Q. What is interest rate of education loan?

Answer: Interest Rate for all amounts is 12.50% per annum

Q. What is interest subsidy on education loan?

Answer: Indian Bank offers

  • Interest Subsidy scheme for economically weaker sections and to promote education amongst them
  • ACSISOBCEBC Subsidy for financial support to students belonging to OBC community or other reserved categories.
  • Padho Pardesh scheme for students who wish to pursue studies abroad

Q. What documents do I need to submit to avail interest subsidy scheme?

Answer: The documents that need to be submitted are:

  • Income certificate issued by authorised authorities
  • Bonafide student certificate
  • Letter of undertaking or declaration signed by borrower/ co-borrower

Q. What is employment verification in an education loan?

Answer: The bank takes the responsibility to cross verify all the employment details of the applicant and co-borrower. If the banks fails to cross verify every detail provided, it might reject the loan application.

Q. Are there any tax benefits in education loans?

Answer: Under Section 80E of Income Tax Act, loan borrowers can avail the tax benefits. This benefit is only available over and above INR 1,50,000. Tax benefits can be availed once the borrower starts paying interest on loan. The deduction is available until borrower pays off full interest amount on loan or for maximum of 8 years (whichever is earlier).

Q. Is it necessary to have bank account with the bank while availing loan from that particular bank?

Answer: It is not necessary to have a bank account while availing the loan but it makes it easier for the borrower to get loan application approved.

Q. Why do banks require insurance policy as security?

Answer: The banks require insurance policy as security in lieu of education loan provided. The insurance policy should be equal or more to the amount of loan sanctioned. In case of untimely demise of the borrower, the bank recovers the amount from the insurance policy

Q. Are there any additional benefits on availing loan from Indian Bank?

Answer: Indian Bank provides life insurance coverage to student borrower under ‘New IB Jeevan Vidya Scheme’. The premium of which will be borne by the bank. 

Q. What is credit score? Is it important for education loan?

Answer: Credit Score is inclusive of various factors such as credit history (Loan history or credit card). If a student does not have a credit score, banks calculate it by considering factors such as University, College and the Course of admission. Banks consider the academic background of student and credit history of co-borrower.

Q. If a student have any query, where or whom to contact?

Answer: student can reach out to the nearest branch in case of any query.

Customer Care Number: 1800 425 00 000/ 1800 425 4422

Customer Care Id:,

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