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The Allahabad Bank education loan — now offered under Indian Bank after the 1 April 2020 amalgamation — provides up to ₹15 lakh for studies in India and ₹25 lakh for studies abroad under the IBA Model scheme. Indian Bank's current education loan rate is approximately 10.25% p.a. (as of 2025-26; subject to change — verify at indianbank.bank.in). Under the PM Vidyalaxmi scheme, eligible students may access rates of 7.25%–8.45% p.a.
As of July 2024, banks' outstanding education loans in India crossed ₹1.23 lakh crore, reflecting students' growing reliance on loan finance. Understanding the current Indian Bank education loan — the successor to the Allahabad Bank scheme — helps you plan better and avoid last-minute financial stress. Read this blog to learn eligibility, application, and repayment details.
Key Takeaways
- Merger: Allahabad Bank merged into Indian Bank effective 1 April 2020. All education loans are now processed by Indian Bank.
- Loan Amount: Up to ₹15 lakh for studies in India and ₹25 lakh for abroad under the IBA Model scheme (as of 2025-26; subject to change).
- Interest Rate: Approximately 10.25% p.a. under Indian Bank's standard scheme; 7.25%–8.45% p.a. under PM Vidyalaxmi for eligible students — as of 2025-26; verify at indianbank.bank.in.
- Margin Money: Nil up to ₹4 lakh; 5% for India and 15% for abroad on higher amounts.
- Security: No collateral up to ₹4 lakh; collateral mandatory above ₹7.5 lakh.
- Repayment: Up to 10 years for loans ≤ ₹7.5 lakh; up to 15 years for higher amounts, after course completion plus moratorium.
Indian Bank Education Loan Interest Rates & Key Features
Following the 1 April 2020 amalgamation, education loans previously offered under the Allahabad Bank brand are now issued and serviced under Indian Bank's IBA Model Education Loan Scheme. Current indicative rates (as of 2025-26; subject to change — verify at indianbank.bank.in):
- Standard IBA Model scheme: approximately 10.25% p.a.
- PM Vidyalaxmi scheme (eligible students): 7.25%–8.45% p.a.
- Concession of 0.5% for female students.
- Concession of 1% if interest is paid during the moratorium period.
Rates for accredited overseas programmes are typically slightly lower than for domestic programmes. Always confirm the current rate directly with Indian Bank.
Loan Amount & Security
Loans are categorised as secured or unsecured based on the institution tier and loan size:
- Secured Loans
- ₹10–15 lakh: List A colleges (India)
- ₹7.5–10 lakh: List B colleges (India)
- ₹4–7.5 lakh: List C colleges (India)
- Unsecured Loans
- Up to ₹20 lakh: List AA colleges (India)
- Up to ₹10 lakh: List A colleges (India)
- Up to ₹7.5 lakh: List B colleges (India)
- Up to ₹4 lakh: List C colleges (India)
Top-tier colleges can access higher amounts without collateral, while mid- and lower-tier institutions typically require security.
Charges & Repayment
- Processing Fees: 0.10%–0.15% of the sanctioned loan amount (confirm current fees with Indian Bank).
- Repayment Period: Up to 15 years.
- Moratorium Period: Course duration + 12 months.
For a complete guide on the current scheme, read our blog on Indian Bank Education Loan.
Get an Education Loan 10X Faster than Banks.
Allahabad Bank Education Loan Eligibility Criteria
- Applicant must be an Indian citizen.
- Must have secured admission to a recognised professional or technical course in India or abroad, via entrance exam or merit.
- If admission is purely based on marks (not entrance), a cutoff of 50–60% aggregate at 10+2 is required, depending on the source.
- Meritorious students under the management quota are also eligible.
Looking to explore more options? Our guide on 5 best loans for Indian students can help.
Allahabad Bank Education Loan Benefits & Course Coverage
Under Indian Bank's current scheme (successor to Allahabad Bank), the loan offers:
Broad course coverage in India
Includes UGC/AICTE/ICMR-approved degrees, diplomas (including B.Ed., nursing, teacher training), and vocational/training programmes (DCA, shipping, aviation).
Abroad studies
Covers job-oriented professional and technical programmes (e.g., MBA, MS, MCA) at accredited universities overseas.
Concessions
- 0.5% interest rebate for female students.
- 1% rebate if interest is paid during the moratorium.
Expense coverage
Tuition, hostel, travel (for abroad), books, equipment (including laptops), lab and library fees, project costs, and counselling fees (if within 60 days) are covered.
Get an Education Loan with Higher Chances of Approval
How to Apply for an Education Loan via Indian Bank (Former Allahabad Bank)
Applying for an education loan via Indian Bank (which took over Allahabad Bank in April 2020) involves the following steps:
Confirm Eligibility
- Be an Indian citizen with confirmed admission to a recognised professional or technical course in India or abroad.
- Meet minimum academic performance (generally 50–60% in qualifying exams; higher cut-offs for some programmes).
Identify the Right Branch
- Applications are accepted at Indian Bank branches near your place of permanent residence or domicile. This speeds up verification and co-applicant checks.
Prepare a Complete Document Set
- Admission letter or I-20, fee structure, and course details.
- Academic records (10th/12th marksheets, degree certificates).
- ID, address, and age proof (Aadhaar, passport, voter ID).
- Parent or guardian income proof (salary slips, ITR, pension certificate).
- Community certificate, if applicable.
- Collateral documents for secured loans (property papers, valuation, LIC policy, etc.).
- An affidavit stating no other education loan has been availed, if required.
Understand Security and Co-Applicant Rules
- Up to ₹4 lakh: No collateral; parents act as co-applicants.
- ₹4–7.5 lakh: Third-party co-applicant may be needed.
- Above ₹7.5 lakh: Tangible collateral required along with parent or guardian as co-applicant.
Apply Online or Offline
- Online: Use the Indian Bank education loan portal at indianbank.bank.in, upload documents, and track your application digitally.
- Offline: Visit your nearest Indian Bank branch, collect the form, submit documents, and complete in-person verification.
Sanction and Disbursement
Once documents are verified and collateral assessed, the bank issues a sanction letter. Funds are disbursed directly to the institution in tranches as per the fee schedule.
Repayment and Moratorium
- Repayment starts after the course ends or 12 months after securing a job, whichever is earlier.
- Tenure: Up to 10 years for loans ≤ ₹7.5 lakh; up to 15 years for higher amounts.
- Option to pay interest during the moratorium to earn a 1% rebate.
If you are exploring other education loan options, read our complete guide on how to apply for an instant student loan online.
Pursuing higher education is a big step, and the right education loan can make all the difference. While Allahabad Bank (now merged into Indian Bank) offered structured education loans with clear benefits, the process can still feel lengthy and document-heavy.
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