The rising cost of education at the domestic and international levels requires parents to acquire funds from external sources. Popular financial institutions offer education loans, but many find it difficult to afford monthly installments even with these credit facilities.
However, to address this issue, the Indian Government extends various education loan interest subsidy schemes to ensure affordable credit for individuals belonging to the EWS and minorities. Under such government interest subsidy scheme, eligible borrowers can acquire credit at a reduced interest rate.
Different types of education loan subsidy schemes
With the availability of different government interest subsidy schemes, funding higher education is more convenient than ever.
Following are the different types of education loan schemes and the subsidized rates that Indian borrowers can benefit from-
Vidya Lakshmi Education Loan scheme
The Indian Government has brought forward various schemes to finance higher education, and one of them is the Vidya Lakshmi Education loan. Under this scheme, one can apply for an education loan via a common application form known as CELAF. Individuals can check their application status online through this online portal or search for different government scholarships.
Individuals can obtain a substantial loan amount with flexible tenor and repayment terms through this subsidised interest scheme. To avail benefits of this interest subsidy scheme, one must be an Indian resident and secure admission to their desired course after qualifying for the respective entrance examination. By meeting simple eligibility parameters and providing minimal documents, intending borrowers can obtain funds within 72 hours of approval.
Padho Pardesh Education Loan scheme
This scheme was introduced by the Ministry of Minority Affairs, Government of India and the IBA to provide subsidised interest for the meritorious students belonging to the minority community. Scholarships are extended to the students from the economically weaker sections to complete their higher education and explore job opportunities successfully.
Students must meet the following eligibility criteria to enjoy the benefits of this scheme:
- The applicant must have secured admission in one of the higher approved courses like PH. D, M. Phil etc.
- Applicant’s gross family income must not exceed Rs.6 lakh annually. One must submit the income certificate certified by the State Government.
- Among other government interest subsidy schemes, this particular scheme extends the benefit of the reimbursement of interest component for the moratorium period.
Dr. Ambedkar Central Sector Scheme of Interest Subsidy
This scheme dedicatedly promotes education and primarily higher education abroad among the prospective students belonging to other backward classes (OBCs) and economically backward classes (EBCs). OBCs need to produce their caste certificate to the respective financial institution to avail this scheme. Moreover, students belonging to these categories must secure admission in a reputed educational institution for the prescribed courses.
However, one must note the income bracket before using credits under this government interest subsidy scheme. For OBC candidates, the annual income must not exceed Rs.3 lakh, and for EBC applicants, it should not be more than Rs.1 lakh annually.
Nonetheless, if applicants are ineligible for these schemes or require sizeable credit, they can apply for an education loan against property extended by reputed financiers. Here, individuals can avail of a substantial loan amount at competitive interest and flexible repayment terms. With these funds, customers can cover varied expenses related to education, such as tuition fees, flight tickets, medical costs, etc. Moreover, borrowers can avail such funds by meeting the basic eligibility criteria and submitting minimal documents.
Besides, eligible applicants can also enjoy the benefit of pre-approved offers extended by these lenders on a wide range of financing options, such as a loan against property, a home loan, etc. These exclusive offers accelerate the loaning procedure and save time. Individuals can check their pre-approved offers by mentioning their essential credentials.
Therefore, with the availability of these government interest subsidy schemes, one can pursue higher education overseas without any financial stress. However, a loan against property is also a feasible option for borrowers who want to avoid the hassle of strict eligibility and extensive documentation.