In today’s competitive academic environment, the cost of higher education often poses a challenge, especially for students from economically weaker backgrounds. To ease this burden, the Government of India has introduced initiatives like the Central Sector Interest Subsidy Scheme (CSIS), which supports students from the Economically Weaker Section (EWS) under the Indian Banks' Association (IBA) Education Loan Scheme. This scheme provides relief during the moratorium period of education loans, allowing students to pursue technical and professional courses in India without immediate repayment pressure.
Yet, despite these subsidies, many students and families still require additional funds to cover education-related expenses. Bajaj Finance bridges this gap through its Loan Against Property, offering funding of up to Rs. 10.50 crore with competitive interest rates, convenient repayment tenures, and a simple application process. By complementing government schemes with its innovative financing solutions, Bajaj Finance ensures that students can achieve their academic ambitions without financial compromise.
What is an interest subsidy scheme for an education loan?
The rising cost of education is a significant challenge, particularly for deserving students from economically weaker and minority communities. To make higher education more accessible and affordable, the Government of India has introduced education loan subsidy schemes for eligible applicants. These schemes allow borrowers to avail an education loan in India with an interest subsidy for the moratorium period.
Pradhan Mantri Vidyalaxmi (PM-Vidyalaxmi) Scheme
To qualify, applicants must secure admission on merit to one of the 860 recognised Quality Higher Educational Institutions (QHEIs) in India. The scheme is implemented by the Department of Higher Education in collaboration with Canara Bank as the nodal bank. Applications for this scheme are accepted online.
Key features Pradhan Mantri Vidyalaxmi (PM-Vidyalaxmi) Scheme
- Collateral-free loans: Students can access education loans without the need for collateral or guarantors, through a fully digital process on the PM-Vidyalaxmi portal.
- Credit guarantee: The government offers a 75% credit guarantee for loans up to Rs. 7.5 lakh.
- Interest subvention: The scheme provides interest subsidies based on family income:
- Up to Rs. 4.5 lakh annual income: Students pursuing technical or professional courses in eligible institutions receive 100% interest subsidy, aligned with the CSIS scheme.
- Rs. 4.5 lakh to Rs. 8 lakh annual income: Students enrolled in degree or diploma courses at recognised Quality Higher Educational Institutions (QHEIs) are eligible for a 3% interest subsidy on loans up to Rs. 10 lakh.
Padho Pradesh Scheme
The government launched the Padho Pardesh scheme to provide an interest subsidy to eligible meritorious students from economically weaker sections. Under this scheme, scholarships are provided to minority community students to complete their higher education abroad and improve their job opportunities.
The Padho Pardesh scheme is a central sector scheme to provide interest subsidies to students belonging to minority communities as per the provisions of the National Commission for Minorities Act, 1992. The interest subsidy is provided on the interest payable for the moratorium period of the education loans taken under the ‘Scheme of Interest subsidy on Educational Loans for Overseas Studies’.
Central Scheme for Interest Subsidy
This education loan interest subsidy program has been introduced for students from the economically weaker sections. Students can opt for this scheme to finance their studies in any professional or technical course.
Dr. Ambedkar Central Sector Scheme of Interest Subsidy
This is also an interest subsidy scheme on education loans. Individuals from Backward classes (OBC) and Economically Backward Classes (EBC) can avail this financial assistance to study overseas.
But what happens if your subsidy does not cover all your educational expenses? Here is a tip: a loan against property can bridge the gap and offer the financial freedom you need to chase your dreams. This secured loan allows you to access funds while retaining ownership, making it an excellent option for business expansion, education, medical expenses, or debt consolidation. With lower interest rates and flexible repayment terms, a loan against property provides a smart way to unlock your property's financial potential.
Eligibility criteria for education loan subsidy
To avail of an education loan subsidy in India, students must meet specific criteria laid out under government-backed schemes like the Central Sector Interest Subsidy Scheme (CSIS), Pradhan Mantri Vidya Lakshmi Karyakram (PMVLK), or other state-level initiatives. The key eligibility conditions are:
Indian citizenship: The applicant must be an Indian citizen.
Course of study: Applicable for approved technical and professional courses pursued after Class XII in recognised institutions within India (loans under the IBA Education Loan Scheme).
Family income: For the CSIS scheme, the annual gross parental/family income must not exceed Rs. 4.5 lakh. A certificate issued by authorised state government officers is mandatory. Other schemes may extend the income ceiling up to Rs. 8-10 lakh per annum.
Academic performance: Some schemes may stipulate minimum qualifying marks (such as 60% or above).
Recognised institution: The institution should be approved by UGC, AICTE, or equivalent regulatory bodies.
Loan amount: Subsidy benefits typically apply to loan amounts up to Rs. 10 lakh for studies in India (and up to Rs. 20 lakh for studies abroad). From April 2022, for loans sanctioned above Rs. 10 lakh, interest subsidy is capped at Rs. 10 lakh.
Scheme timelines: The scheme is applicable for loans taken on or after 1 April 2009. For earlier loans, only disbursements made after this date qualify. The current claim schedule covers the moratorium period from 1 April 2023 to 31 March 2024.
It is always advisable to check official notifications from the Government of India or state authorities for updated eligibility conditions and submission timelines..
While subsidies ease financial stress, not every expense fits within these schemes. This is where a loan against property comes in—a smart option to access high-value funding. Imagine turning your property into a stepping stone for higher education without selling it! By pledging the value of your own property, you can access large funds—all with flexible repayment options and competitive interest rates. Explore our offers on loan against property today!
Required documents for CSIS education loan
To apply for an education loan subsidy online, ensure you have the following documents ready:
- Loan sanction letter: Proof of education loan approval from the bank or financial institution.
- Income certificate: Issued by a competent authority to confirm the applicant's family income.
- Caste certificate (if applicable): For applicants belonging to SC/ST/OBC or minority communities.
- Proof of admission: Admission letter or enrolment confirmation from the educational institution.
- Course fee structure: Official document outlining the fee details for the course.
- Academic records: Mark sheets or certificates of qualifying exams.
- Identity and address proof: Aadhaar card, passport, voter ID, or any government-approved ID.
- Bank account details: Account details of the loan beneficiary for subsidy disbursal.
- Declaration form: Signed declaration or affidavit as per scheme guidelines.
Ensure all documents are scanned and uploaded in the prescribed format during the application process.
How to apply for an education loan?
Applying for an education loan is a straightforward process, but it requires careful preparation. Follow these steps:
- Research lenders:
Start by comparing education loan options from various banks, financial institutions, and government schemes. Look at interest rates, loan limits, repayment terms, and eligibility criteria. - Check eligibility:
Ensure you meet the basic eligibility criteria, such as being an Indian citizen, having secured admission to a recognised institution, and meeting income and academic requirements. - Gather documents:
necessary documents like identity proof, admission letter, academic certificates, proof of income (for co-applicant), bank statements, and collateral documents (if applicable). - Fill the application:
Complete the application form online or in-person, providing details about the course, institution, loan amount, and personal information. - Submit and wait for approval:
Submit the form along with supporting documents. The bank will review your application, assess your eligibility, and sanction the loan. Upon approval, the funds will be disbursed
Need more funding? Look no further than a loan against property. With features like funding up to Rs. 10.50 crore* and flexible repayment terms up to 15 years, this option empowers you to pursue education stress-free. Check your eligibility for a loan on property and study without financial worries!.
Other solutions
Besides these schemes, another solution is the Bajaj Finserv Study Loan on Property. Its features include
- Ample funding is up to Rs. 10.50 crore*, basis eligibility
- Tenor ranging up to 15 years for easy repayment
- A loan against property balance transfer facility to avail better loan terms on an existing loan
- Exclusive Flexi facility to manage repayment more easily
Did you know your home could fund your education dreams?
Your home can be the key to achieving your education dreams! With a loan against property, you can access high-value funding to bridge any gaps left by subsidies. It is a smart, cost-effective way to fund higher education—simply use your property as collateral and unlock quick financing today! Check the offer now.
Popular government schemes
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Frequently asked questions
Yes, in some cases, you can get a subsidy on an education loan in India. The Government of India offers certain education loan subsidy schemes to make higher education more affordable for students. One of the primary schemes is the ‘Interest Subsidy Scheme for Education Loans,’ which is aimed at helping students from economically weaker sections pursue higher education.
Eligibility for an education loan interest subsidy in India depends on factors such as family income, the type of course and institution, the loan amount, and timely repayments. Various government schemes aim to assist economically weaker students pursuing higher education by subsidising the interest on their education loans.
To check your education loan subsidy status in India:
- Contact your lending institution
- Visit the NSDL's Vidya Lakshmi portal
- Check the relevant government department's website
- Contact the Ministry of Education
- Visit a local bank branch
- Review your loan account statements for subsidy details
Education loan subsidies in India are typically available during the ‘moratorium period’ and sometimes the ‘course period’. The moratorium period starts with the loan disbursement and extends through the course and a brief period after course completion. During this time, the government subsidises the loan's interest. The exact duration of these periods can vary based on the specific subsidy scheme and lender's policies.
The issuing authority for an income certificate in India is typically the local government or municipal authorities. These certificates are often issued by the Revenue Department or the Tehsildar (a local administrative officer) in rural areas and by municipal officials or the Sub-Divisional Magistrate (SDM) in urban areas. The specific issuing authority can vary depending on the state and district within India.
To claim a subsidy from the Government of India:
- Check your eligibility for the specific subsidy scheme
- Submit an application with the required documents to the relevant government department
- Once approved, follow the provided instructions for claiming the subsidy
- Subsidies are often directly deposited into your bank account
- Comply with any conditions or reporting requirements
