Know All About Education Loan Scheme and Criteria

The latest reports from a credit bureau show that financial institutions around India disbursed about Rs.11,000 crore under education loans in the 12-month period ending September 2020. The number clearly indicates the popularity of education loans as a financial instrument for supporting higher studies in India or even abroad.

The Central and State governments have various education loan schemes that further support students seeking financial aid. Read on to know more about some of the most notable schemes in India.

Most Notable Educational Loan Schemes

Listed below are some popular study loan schemes that extend financial support to students in need.

Vidyalakhsmi Portal

This purpose-built portal allows students to find a suitable educational loan offer hassle-free. They can also use the portal to apply for funds through education loan providers via a common application form known as CELAF. Individuals can also keep track of their application status and related details on the portal.

Credit Guarantee Fund Scheme for Education Loan or CGFSEL

The Indian Government introduced this scheme to extend affordable study loans. Under the CGFSEL, one can avail up to Rs.7.5 lakh without collateral or a third-party guarantee. 

Central Government Scheme of Interest Subsidy on Educational Loan

Operated by the Indian Government, this scheme extends monetary support to students hailing from the financially weaker sections of India. The subsidy on offer is applicable to an education loan of up to Rs.7.5 lakh, even if the total amount is higher. Individuals must meet the below eligibility parameters to avail of funds under this scheme.

• The applicant must secure admission to a recognized college in India
• The gross annual family income of the applicant must not exceed Rs.4.5 lakh

Individuals need to submit necessary documents along with the application to apply under this scheme.

Scheme of Interest Subsidy on Educational Loan

This education loan scheme is exclusively for students belonging to the OBC (other backward class) and EBC (economically backward class) categories pursuing a degree abroad. The eligibility criteria for this scheme include:

• Admission at a higher and post-graduate level
• An annual family income not exceeding Rs.3 lakh and Rs.1 lakh for OBC and EBC, respectively

Individuals need to submit income tax details with the application.

Padho Pardesh Scheme

This is a tailor-made education loan plan that provides financial support to students belonging to minority communities. Following are some highlights of this plan:

• Only applicants pursuing Ph.D, Master, or M.Phil are eligible 
• The applicant’s family income must not exceed Rs.6 lakh per annum
• They need to submit income proof with their application.

This scheme offers education loans for higher studies, and it is solely reserved for this.

Apart from these notable schemes, several other educational loan plans are available to provide financial support to individuals in need. However, the amounts offered by these schemes are limited, and the application process is long-drawn. Individuals can easily bypass this hassle by opting for a loan against property for education.