PM Vidyalaxmi education loan scheme: Key features, eligibility, and application process explained

For any student aspiring to pursue higher education, having a good score is crucial to getting admission to any good institution. Apart from good scores, having enough finances to fund education is equally important. However, many students in India cannot afford higher education. In order to help such students, the government of India has stepped in to help meritorious students who lack enough finances to fund education.

The Union Cabinet approved the Pradhan Mantri Vidyalaxmi (PM Vidyalaxmi) scheme in November 2024. This Central Sector Scheme will provide loans to meritorious students who cannot afford quality higher education.

Through this scheme, the government plans to provide financial support to students for admission into the top 860 higher educational institutes, which will benefit more than 22 lakh students every year.

Features of PM Vidyalaxmi scheme

• The scheme will provide collateral-free, guarantor-free education loans.
• Students can apply for this loan online.
• Education loans up to ₹ 7.5 lakhs will be provided, with the government providing a 75% credit guarantee to support banks.
• The scheme will provide a 3% interest subvention on loans of up to ₹10 lakh for students from families with an annual income of up to ₹8 lakh.
• A complete interest subsidy has been offered to students for up to Rs. 4.5 lakhs annual family income.
• Loans can be availed from all Scheduled Banks, Regional Rural Banks and Cooperative Banks.

Eligibility for PM Vidyalaxmi scheme

• Students who get admission to quality higher education institutions (QHEIs) in India based on merit basis.
• Students of all family income groups can apply for this loan.
• The loan amount will depend on course fees and related fees. The government has not set any cut-off amount for this type of loan.
• Students who have secured admission to QHEIs in India for degree or diploma programmes can get this loan.
• Students qualifying for competitive examinations or merit-based admission can apply for this loan. However, students admitted through quota, including management quota will not be eligible for this loan.

How to apply for PM Vidyalaxmi scheme

• Visit the official Vidyalaxmi portal, a platform to apply for an education loan.
• Register on the portal by creating an account and click on ‘new user.’ You will be required to enter your name, email, address, mobile number, Aadhaar number and other necessary information.
• After registration, log in to the Vidyalaxmi portal with your login credentials.
• Go to the ‘loan application section’ and choose the type of loan.
• Provide the necessary details such as course name, institution and other personal details.
• Select the bank or financial institution to avail the loan.
• Fill out your application form and click submit.
• After submitting your application, track the status of it on the Vidyalaxmi portal.
• The portal will notify about the approval of the loan.

Interest rate of the PM Vidyalaxmi scheme

The interest rate for loans under PM-Vidyalaxmi will be less than the interest rate charged by the bank on education loans not covered under PM-Vidyalaxmi. Individual banks will be free to charge interest lower according to their policy.

Repayment period of PM Vidyalaxmi scheme

The repayment period of the education loan is up to 15 years, excluding the moratorium period. If the loan amount is above a certain threshold, to be decided by individual banks, the bank may take life insurance cover of the student borrower. The insurance premium can be included in the education loan amount, depending on the request of the borrower.

In conclusion, the PM Vidyalaxmi scheme is a move towards providing high-quality education to aspiring students. It is essential for students to know the process, requirements and other features of the scheme to avail the loan timely.

(Note: Raising a loan comes with its own risks. So, due caution is advised)