About Education Loan Scheme by Narendra Modi
The Education Loan Scheme by Narendra Modi has played a key role in making higher education more affordable and inclusive for Indian students.
Through these government-backed education loan initiatives, students from economically weaker and middle-income groups can now access financial support for undergraduate, postgraduate, and doctoral studies — both in India and abroad.
Many of these schemes offer loans above ₹7.5 lakh without collateral, ensuring that deserving students aren’t held back by financial limitations.
Education Loan Schemes by Government 2025
The Government of India, under various ministries and financial corporations, offers multiple education loan schemes to help students, especially from economically weaker or minority communities to pursue higher education in India and abroad.
Here are some key schemes you should know about:
1. NBCFDC Education Loan Scheme (for OBC Students)
- Eligibility: Must belong to the OBC category; admission based on merit; family income below ₹3.5 lakh per annum.
- Loan Amount: Up to ₹20 lakh.
- Key Benefit: Covers up to 90% of course fees for Indian studies and 85% for abroad; girls receive concessional interest rates.
2. Padho Pardesh Scheme (Now Discontinued)
- Eligibility: Students from minority communities pursuing Master’s, M.Phil, or PhD abroad; family income below ₹6 lakh per annum.
- Loan Benefit: Up to ₹6 lakh.
- Status: Discontinued from 2022–23; existing beneficiaries (as of March 31, 2022) still receive interest subsidies during the moratorium period.
You can explore similar interest subsidy schemes for minority students.
3. ACSISOBCEBC Scheme (For OBC and EBC Students)
- Eligibility: OBC or EBC students pursuing Master’s, M.Phil, or PhD abroad.
- Loan Coverage: Full tuition fee coverage as the loan amount.
- Purpose: To support overseas higher education for students from economically and socially backward classes.
4. Vidya Lakshmi Education Loan Scheme
- Eligibility: Indian citizens aged 18–35 years with admission to a recognized institution.
- Loan Amount: Covers tuition fees or as per available collateral.
- Description: A centralized online portal connecting students with multiple banks to apply for education loans and scholarships.
Check our step-by-step guide to PM Vidya Laxmi Portal for easy application tips.
5. Gujarat Government Loan for Study Abroad
- Eligibility: Students domiciled in Gujarat with a minimum of 60% in Class 12 and family income below ₹6 lakh per annum.
- Loan Amount: Up to ₹15 lakh.
- Description: A state-funded initiative supporting students from Gujarat pursuing higher studies abroad.In addition to these central schemes, several state governments provide financial aid and interest subsidies for students. Visit your respective state’s education or minority welfare department website for local loan options.
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People Also Ask
Education Loan Scheme by Narendra Modi Interest Rate
Under the Education Loan Scheme by Narendra Modi, the Vidya Lakshmi Initiative connects students with over 38 partner banks, helping those with a family income below ₹4.5 lakh access affordable education financing.
Interest rates typically range between 7% and 13%, depending on the bank, course type, and institution category. Loans of up to ₹7.5 lakh are available without collateral, with repayment starting only after the moratorium period — usually course duration plus 12 months.
This is how an approx EMI will work out:
Key Insights About Education Loan Interest Rates
Multiple Factors Affect Rates: The exact rate depends on the lender, course type, university, and student profile.
Lower Rates at Public Banks: Public sector banks often provide concessional interest rates under the Vidya Lakshmi and Credit Guarantee Fund Scheme for Education Loans (CGFSEL).
STEM Courses Get Preference: Programs in Science, Technology, Engineering, and Mathematics (STEM) often attract lower interest rates due to higher employability and lower credit risk.
Repayment Flexibility: Borrowers benefit from longer repayment periods and interest subsidies during the study phase or moratorium period.
Maintain a good academic record and get admission offer from a reputed institution. These improve eligibility for subsidized interest.
Do check out other tips on getting education loans at zero interest rate.
Select Education Loan Schemes by Government also support overseas education, including for destinations like Canada, the UK, and Australia, under recognized public-sector loan programs.Students pursuing postgraduate or STEM courses abroad are often eligible for higher loan amounts and longer tenures with government-backed support.
PM Vidya Laxmi Portal: Central Platform for Education Loans in India
The Vidya Lakshmi Portal, launched under the Education Loan Scheme by Narendra Modi, serves as a one-stop online platform for students to access, compare, and apply for education loans and scholarships across India.
This government initiative brings together multiple lenders and schemes in one place, helping students save time and make better financial decisions while planning their higher education in India or abroad.
What Makes the PM Vidya Laxmi Portal Unique?
Developed jointly by the Department of Financial Services (Ministry of Finance), the Department of Higher Education (Ministry of Education), and the Indian Banks’ Association (IBA), the portal simplifies how students find and apply for education loans.
Through this single online window, students can:
- Compare loan offers from 30+ public and private sector banks
- Submit a single Common Education Loan Application Form (CELAF) instead of applying separately to each bank
- Apply for both loans and scholarships under various government schemes
- Track loan status online, reducing the need for multiple follow-ups with banks
How to Apply via PM Vidya Laxmi Portal?
1️⃣ Visit the PM Vidyalaxmi portal.
2️⃣ Register and fill the Common Education Loan Application Form (CELAF).
3️⃣ Select preferred banks and track applications under one dashboard.
Check our step-by-step guide to PM Vidya Laxmi Portal for easy application tips.
How It Helps Students
The PM Vidya Laxmi Portal is especially useful for students who:
- Come from middle- or low-income families
- Need loans for higher studies in India or abroad
- Want to compare interest rates, repayment terms, and eligibility before applying
By providing transparent comparisons and simplified access, this platform ensures that financial challenges don’t stop deserving students from pursuing quality education.
Quick Tip:
If you’re exploring education loans without collateral, or want to know which banks offer government-backed student loans, you can start directly through the PM Vidya Laxmi Education Loan portal , the official source for verified schemes and lender listings.
People Also Ask
Other Loan Schemes Introduced by Narendra Modi Government
Beyond education, the Narendra Modi government has launched several flagship financial initiatives to promote self-reliance and inclusion across India. These programs empower individuals, entrepreneurs, and families by improving access to affordable credit.
These initiatives reflect the government’s broader financial inclusion vision — ensuring that every Indian has access to credit, whether for education, business, or housing.
However, for students, the government’s core focus remains on education-specific schemes like PM Vidya Laxmi, CSIS, and CGFSEL, designed to make higher education more accessible through low-interest, collateral-free loans.
What Students Are Discussing About Interest-Free Education Loans in India
Social media platforms like Quora provide insights into student concerns about government-backed education loans.
A Quora user in Kanthaswamy Balasubramaniam · Follow
Independent Legal Banking Consultant · 3y
Question:
“Can PM Modi provide an interest-free education loan to the needy for higher education?”
Answer:
“Currently, interest-free education loans are not possible in India. Covering loans for 50 lakh students would cost around ₹13,000 crore per year. Banks cannot waive interest since they need to pay depositors. The high number of graduates in India also makes such a scheme difficult. Students must rely on existing education loans, subsidies, and scholarships.”
Insights
- Interest-free loans are not feasible due to financial and systemic constraints.
- Banks and government funding limits prevent large-scale interest waivers.
- Students should explore subsidized loans, scholarships, and government schemes.
Tip
Plan your education financing carefully using existing loans and subsidies, and budget for interest repayment to avoid financial stress.
Reddit users report that some public banks take 3–4 weeks for approval while private NBFCs like Propelld process within 7 days for eligible students. Do check out the complete education loan process by Propelld.
Education Loan Scheme by Narendra Modi for Abroad Studies
The Narendra Modi government has launched several initiatives to make higher education abroad more affordable and accessible for Indian students.
Here are some of the key ones you should know about:
1. PM Vidya Laxmi Portal
- Acts as a central platform for students to apply for education loans for abroad studies.
- Lets you compare loan options from multiple banks and NBFCs using a single online application form.
- Ideal for students looking for transparency and quick loan access.
2. Central Sector Interest Subsidy Scheme (CSIS)
- Offers interest relief during the moratorium period - the time spent studying and up to one year after course completion.
- Available to students from economically weaker sections (EWS).
- Helps reduce repayment stress during the initial years of education.
3. Other Government Education Loan Schemes
- Many public sector banks under these initiatives provide education loans without collateral for select courses and universities abroad.
- Loan amounts and interest rates vary depending on the lender, course, and country of study.
Together, these schemes ensure that financial constraints do not stop deserving students from pursuing higher education overseas.
Related Read: Education Loan Without Collateral for Abroad Studies - Understand how Propelld and other lenders make studying abroad easier without pledging security.
People Also Ask
Want Your Abroad Loan Approved in 7 Days with No Collateral? Apply with Propelld.
Features of Education Loan Scheme by Narendra Modi
The Education Loan Scheme by Narendra Modi aims to make quality education both in India and abroad accessible to all students through simplified loan processes, low interest rates, and interest subsidies.
Here’s a detailed breakdown of its key features:
Eligibility for Government Education Loan Schemes
To qualify for education loan schemes under Narendra Modi’s initiatives, students must meet certain academic and financial criteria:
- Open to students pursuing undergraduate, postgraduate, doctoral, and vocational programs.
- Applicable for education in India or abroad, ensuring global opportunities for Indian students.
- Covers a wide range of disciplines including engineering, management, medical, arts, and skill-based courses.
- Supports students from economically weaker and middle-income backgrounds.
- Focused on merit-based admissions in recognized institutions.
If you don’t qualify for the government education loan schemes, explore Propelld’s No-Collateral Education Loans for quick approval and flexible repayment options.
Loan Amount & Collateral Requirements
Different financial needs are addressed through structured loan slabs:
Interest Subsidy: Eligible students (annual family income below ₹4.5 LPA) can benefit from interest subsidies under the Central Sector Interest Subsidy (CSIS) scheme.
Need a higher amount for abroad studies? You can get loans up to ₹50 lakhs with Propelld’s fastest disbursal in just 7 days. Also, Propelld discloses APRs upfront, unlike most lenders.
How to Apply via PM Vidya Laxmi Portal?
The PM Vidya Laxmi Portal, introduced under the Narendra Modi education loan initiative, simplifies the entire loan journey:
- Single-window platform to apply to multiple banks with one form.
- Track application status and loan offers from different banks in real-time.
- Transparency & ease of access : Students can compare, apply, and manage their education loans in one dashboard.
You can learn more about the PM Vidya Laxmi Education Loan Portal and how to apply effectively.
Switch to Propelld — 10x Faster than Banks.
Remember, applying early and providing accurate information will expedite the approval process, bringing you one step closer to achieving your educational aspirations under the Narendra Modi Education Loan Scheme.
To apply under the Prime Minister’s scheme, it's essential to first understand the Education Loan Eligibility and Application Process, especially for government-backed education loans.
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Education Loan Repayment Terms Under Narendra Modi Scheme
The education loan repayment terms under the Narendra Modi government’s initiative are designed to make repayment easier for students as they transition from studies to employment.
Key Highlights:
- Moratorium Period: Borrowers get up to 1 year after completing the course or 6 months after getting a job, whichever is earlier, before starting repayment.
- Purpose: This period helps students plan their finances and settle into a stable income before EMI payments begin.
- Impact: Such flexibility improves on-time repayment rates and supports long-term financial stability for graduates.
Learn more about the education loan moratorium period and its benefits to make informed repayment decisions.
List of Banks for Education Loan Scheme by Narendra Modi
Please find below the comprehensive list of 38 banks offering financial support under this scheme:
- Abhyudaya Cooperative Bank Limited
- Allahabad Bank
- Andhra Bank
- Axis Bank
- Bank Of Baroda
- Bank Of India
- Bank Of Maharashtra
- Canara Bank
- Corporation Bank
- Central Bank Of India
- Dena Bank
- Dombivli Nagari Sahakari Bank Limited
- Federal Bank
- GP Parsik Bank Ltd
- HDFC Bank
- ICICI Bank
- IDBI Bank
- Indian Bank
- Indian Overseas Bank
- Karnataka Bank
- Kotak Bank
- Karur Vysya Bank
- New India Cooperative Bank Limited
- Oriental Bank Of Commerce
- Pragathi Krishna Gramin Bank
- Punjab And Sind Bank
- Punjab National Bank
- RBL Bank
- Syndicate Bank
- State Bank of India
- Tamilnad Mercantile Bank Limited
- UCO Bank
- Union Bank
- United Bank of India
- Vijaya Bank
- YES Bank
- IndusInd Bank
- South Indian Bank
Apart from these, there are NBFCs also offering education loans. Find out the complete details about education loans by NBFCs in India.
EMI and Interest Rate on Government Education Loans by Top Indian Banks
This table shows starting interest rates and EMI variations for student loans in India by the government and also for abroad from major Indian banks. Remember, these are estimates - contact the bank for your personalized offer.
Important Note:
- The interest rates and EMI variations mentioned above are indicative and can vary depending on the individual bank's policies, loan amount, course of study, borrower's profile (credit score, academic record, etc.), and chosen loan scheme.
- It's always recommended that you visit the official bank website or contact customer care for the latest interest rates and specific loan details.
Scholarships and Subsidies for Education by Narendra Modi
Under the education loan scheme initiated by Prime Minister Narendra Modi, the integration of scholarships with loans through the PM Vidya Laxmi Portal significantly strengthens the student support system. This portal features over 200 scholarships across various disciplines, offering a comprehensive range of financial aid options to mitigate educational costs.
Learn all about the Prime Minister Scholarship. Eligibility criteria, Benefits, Documents required, and application process for the PM scholarship program.
Moreover, the scheme includes a special subsidy for economically weaker sections, providing loans over Rs. 7.5 lakhs without collateral for families with incomes below Rs. 4.5 lakhs. This initiative aims to alleviate financial barriers and ensure inclusive access to education financing, enhancing opportunities for students from all backgrounds.
Propelld: Empowering Every Student’s Dream to Learn
Getting through higher education shouldn’t be limited by finances — it should be powered by possibilities. That’s where Propelld, one of India’s most trusted NBFCs in education financing, steps in.
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Why Choose Propelld?
- No-collateral education loans up to ₹40 lakhs for India and higher for abroad.
- Moratorium support to give you breathing space until you start earning.
- 10X faster processing than traditional banks.
- Personalized support from our expert team throughout your loan journey.
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