Dive into the world of education loan interest subsidy schemes, where students can catch a break on loan interest. These programs aim to make education more affordable by lowering the interest rates on education loans. Learn how these schemes help students financially, making it easier for them to pursue their studies without breaking the bank. Discover the basics of these programs and how they open doors to accessible education, paving the way for a brighter future without heavy financial burdens.
Abroad education loan options available in India
When it comes to getting government education loan for abroad, there are basically four types of lenders. First, there are public banks like the State Bank of India and Union Bank of India. They offer loans with conditions like putting up some collateral and the loan amount can be anywhere between INR 7.5 Lakh to INR 1.5 Cr. These loans from government banks have good interest rates and even give you some tax benefits.
Then, there are private banks like ICICI Bank, Axis Bank, and IDFC FIRST Bank. They also offer study abroad loans, but the interest rates can start from 11% per year. The amount you can borrow depends on things like which country you’re going to, what you’re studying, and your financial situation. Private bank loans can be processed faster than government ones, and you also get tax benefits.
Another type of lender is Non-Banking Financial Companies (NBFCs), including HDFC Credila, Avanse, InCred, and Auxilo. They offer both secured and unsecured education loans, but their interest rates are a bit higher, ranging from 11.50% to 13.75% per year. Unlike private banks, NBFC loans don’t give you tax benefits. However, they are known for processing loans quickly. So, if you’re thinking about studying abroad, these different lenders give you various options for financing your dream.
Different schemes by Indian government for education loan
There are several different Indian government schemes that are available for Indian students in order to ease the financial burden of abroad education loans. The different education loan schemes are –
- Dr. Ambedkar Central Sector Scheme
The Dr. Ambedkar Central Sector Scheme offers interest subsidies on education loans for meritorious students pursuing approved Masters, M.Phil, or Ph.D. courses abroad. Eligible candidates, belonging to the Economically Backward Class (EBC) or Other Backward Class (OBC), can apply. For OBC applicants, the family income limit is INR 8 Lakh per annum, and for EBC, it’s INR 2.5 Lakh per annum. While the loan amount is unspecified, the scheme prioritizes financially disadvantaged students, emphasizing its commitment to supporting higher education for deserving individuals.
- Central Sector Interest Subsidy (CSIS)
The Ministry of Human Resources Development, in collaboration with the Department of Higher Education, has launched a scheme to provide interest subsidy on education loans for students from economically weaker sections, aimed at those undertaking technical or professional studies within India. Eligibility criteria include securing admission to a recognized Indian or foreign university, with a total family income not exceeding INR 4.50 Lakh per annum. This initiative aims to offer financial assistance to those requiring support, ensuring equitable access to quality education. The maximum loan amount sanctioned under this initiative is capped at INR 10 Lakh, providing significant assistance to qualified individuals seeking higher education.
- Gujarat Government’s Scheme for Subsidized Interest on Education Loans for Overseas Studies
The education loan for overseas studies provided by the Gujarat government grants a full interest subsidy to students from economically disadvantaged backgrounds in the state.To qualify, students need to secure at least 60% in their 12th grade, and their family income should be less than or equal to INR 6 Lakh annually. The loan amount can go up to INR 15 Lakh, supporting students in pursuing professional courses at the graduate, post-graduate, and diploma levels. This initiative aims to break financial barriers, ensuring that deserving students can access international education opportunities.
- National Minorities Development & Finance Corporation (NMDFC)
NMDFC, a governmental entity, facilitates educational loans designed for minorities pursuing professional and career-oriented courses. The initiative is structured into two credit lines based on family income. Under the first credit line, catering to individuals with incomes up to INR 1.20 Lakh in urban areas and INR 98,000 in rural areas, education loans for domestic studies are available up to INR 20 Lakh, and for international studies, up to INR 30 Lakh, all at a favorable 3% interest rate. The moratorium period spans the course duration plus six months, with a repayment tenure of 5 years. In the second credit line, accommodating those with incomes up to INR 6 Lakh, interest rates differ (8% for men and 5% for women). This endeavor aims to offer accessible financial assistance to minority communities pursuing education in professional fields.
- National Scheduled Castes Finance & Development Corporation (NSCFDS)
NSCFDC, dedicated to the welfare of scheduled castes, offers education loans with funding options of up to INR 20 Lakh for domestic studies and up to INR 30 Lakh for international education. The interest rate stands at 4%, with an additional 0.5% rebate for female beneficiaries. The moratorium period is equivalent to the course duration plus six months, while the repayment tenure spans 10 years for loans below INR 7.5 Lakh and 15 years for loans exceeding this threshold. This initiative underscores the commitment to supporting the educational aspirations of scheduled castes by providing substantial financial assistance tailored to their needs.
In conclusion, the diverse landscape of education loan schemes in India, ranging from interest subsidies to specific community-focused initiatives, reflects a commitment to making quality education accessible. These programs not only alleviate financial burdens but also empower students to pursue their academic dreams both within the country and abroad, fostering a brighter and more inclusive future.