NSFDC Education Loan for SC Students: Eligibility, Benefits, and Application Process

The National Scheduled Castes Finance and Development Corporation (NSFDC), established in 1989 under the Indian Companies Act 1956, is a government body focused on providing financial assistance to Scheduled Caste individuals for their socio-economic development. It aims to empower these communities and integrate them into the mainstream economy. 

As of September 2018, NSFDC has an authorised share capital of Rs 1500 crores, with a paid-up capital of Rs 1400 crores.

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NSFDC Education Loan: Highlights

Here is an overview of the key parameters and details of the NSFDC Education Loan Scheme

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What is an NSFDC Education Loan?

The Education Loan Scheme is administered by the National Scheduled Castes Finance and Development Corporation (NSFDC) under the Ministry of Social Justice and Empowerment, Government of India. This scheme offers financial assistance to Scheduled Caste students to take full-time professional or technical courses in recognised institutions.

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Benefits of NSFDC Education Loan

The NSFDC Education Loan Scheme offers several attractive benefits for eligible Scheduled Caste students pursuing professional or technical education in India and abroad:

1. Maximum Loan Limit

The maximum loan limit is INR 30,00,000 for studies in India and INR 40,00,000 for studies abroad. The loan covers 90% of the total course fee or the specified limit, whichever is lower.

2. Low Interest Rate

For studies in India, NSFDC will charge 2% per annum from State Channelising Agencies (SCAs), which charge 6% p.a. from beneficiaries. Women beneficiaries receive an additional interest rebate of 0.5%, lowering the rate to 5.5% p.a. 

For studies abroad, NSFDC will charge 3% per annum from SCAs, and SCAs will charge 7% per annum from beneficiaries, with a similar 0.5% rebate for women beneficiaries, reducing the rate to 6.5% per annum.

3. Flexible Repayment Period

The loan comes with a flexible repayment period. Loans up to INR 10,00,000 must be repaid within 10 years, while loans above INR 10,00,000 can be repaid within 12 years.

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NSFDC Education Loan: Eligibility Criteria

To qualify for the NSFDC Education Loan, the following criteria must be met:

1. Course Enrollment: 

The applicant must pursue a regular full-time Professional or Technical course at a recognised institution in India or abroad.

2. Community: 

The candidate must belong to a Scheduled Caste community.

3. Family Income: 

The annual income of the candidate’s family must be less than INR 3,00,000, irrespective of whether the family resides in rural or urban areas.

4. Loan Assistance: 

The education loan assistance is provided as a one-time support for the course.

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NSFDC Education Loan: Documents Required

To apply for an NSFDC education loan, the following documents are required:

• Passport-size Photograph 
• Aadhaar Card
• Income Certificate
• Schedule Caste Certificate
• Residence Proof
• Valid Passport (For Study Abroad)
• Valid Visa/Permit (If applicable for Study Abroad)
• Educational Qualification Certificates
• Admission Confirmation
• Institute Identity Card
• Additional documents are required for verification as NSFDC or the lending institution requested.

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NSFDC Education Loan: Expense Covered

The loan is provided as a one-time assistance to cover various expenses associated with education, including:

1. Admission Fee
2. Tuition Fee
3. Books and Stationery
4. Equipment and Study Materials
5. Examination Fee
6. Hostel and Mess Expenses
7. Insurance Premium – Coverage for the loanee in case of death or permanent disability.
8. Travel Expenses – Includes passage money and visa expenses for studying abroad.
9. Caution Money
10. Development Fund
11. Clothing Allowance – Includes weather-protective clothing for students in extreme climates (for foreign study).

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How do you Apply for an NSFDC Education Loan?

NSFDC (National Scheduled Castes Finance and Development Corporation) provides education loans to eligible individuals through various Channel Partners. Below is a step-by-step guide on how to apply for an NSFDC education loan:

Step 1: Check Eligibility

Ensure that you belong to the eligible target group: Scheduled Caste (SC) individuals with an annual family income of up to INR 3.00 lakhs.

Step 2: Submit Loan Application

Submit the loan application to the District Offices of State Channelising Agencies (SCAs). You can also submit your application to other Channelising Agencies (CAs) such as Regional Rural Banks (RRBs), Public Sector Banks and NBFC-MFIs (Non-Banking Financial Companies – Microfinance Institutions). These agencies must have a Memorandum of Agreement (MoA) with NSFDC.

Step 3: Application Scrutiny and Forwarding

The District Offices of SCAs/CAs will scrutinise your application. They will forward it to their Head Offices for further processing if it meets the required criteria.

Step 4: Project Viability Appraisal

The SCAs will appraise the viability of the project proposal. If the project is viable, it will be forwarded to NSFDC with approval recommendations.

Step 5: Project Appraisal by NSFDC

The Project and Banking Desk at NSFDC will review and appraise the proposal. The appraisal report is submitted to the Project Clearance Committee (PCC) for concurrence. Proposals that meet all criteria are recommended for sanction.

Step 6: Issuance of Sanction Letter

Once the project is approved, NSFDC issues a Sanction Letter (a Letter of Intent or LOI) to the concerned SCAs, RRBs, Public Sector Banks, or NBFC-MFIs. The letter contains the terms and conditions of the sanction.

Step 7: Acceptance of Terms and Conditions

The SCAs, RRBs, Public Sector Banks, or NBFC-MFIs must accept the terms and conditions mentioned in the sanction letter. They must also fulfil any applicable Prudential Norms.

Step 8: Disbursement of Funds

Upon acceptance of the terms and fulfilment of norms - The concerned agency (SCA, RRB, or bank) submits a demand for funds to NSFDC. NSFDC disburses the funds to the respective agencies for onward disbursement to the beneficiaries.

Step 9: Loan Repayment

The loan beneficiaries must repay the loan per the repayment schedule specified by the SCAs or CAs. Timely repayment is crucial to maintain eligibility for future loans.

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NSFDC Education Loan: Eligible Courses

NSFDC offers education loans for various professional and technical courses across various domains. The courses eligible for financial assistance are as follows:

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NSFDC Education Loan: Eligible Certifications

The following table lists various certifications available under the NSFDC Education Loan Scheme, aimed at providing skills and enhancing career prospects in diverse fields.

1. Hardware and Networking certification
2. Automobile Servicing and Repairs certification
3. Microsoft Office and Web-based services certification
4. Certification in Electronic Assembly
5. Entrepreneurship development certification
6. Garment Construction certification
7. Pattern Cutting in metallic objects through software certification
8. Beauty Parlour certification
9. CAD using AutoCAD certification
10. CNC Milling and Turning Programming and Operation certification
11. Photography and Videography certification
12. Plastic Extrusion and Injection Machine Operator certification
13. Publishing and MS Office certification
14. Repairing of Refrigerator and Air Conditioner certification
15. Repairing and maintenance of Diesel Engine and Power Tiller certification
16. Soft Toys making certification
17. Welding and Fabrication certification
18. Electrician certification

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NSFDC Education Loan Interest Rate

The interest rates for NSFDC education loans vary depending on whether the student is pursuing studies in India or abroad. 

Below are details of the loan limits and interest rates:

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NSFDC Education Loan Interest Rate Under Refinance

NSFDC offers refinance to Public Sector Banks (PSBs) and Regional Rural Banks (RRBs) for educational loans provided to students pursuing full-time professional or technical courses at recognised institutions. This refinance applies once the student receives the full loan disbursement.

NSFDC Refinance for PSBs and RRBs

Below is the table showing the refinance offered by NSFDC for loans provided to students pursuing studies in India and abroad.

NSFDC Refinance Interest Rate

Below is a summary of the interest rates for NSFDC's refinance scheme, which supports PSBs and RRBs in providing loans for students pursuing professional and technical courses.

NSFDC Education Loan: Repayment Period

The repayment for NSFDC Education Loans is made in quarterly instalments. The maximum repayment period is 15 years, including the study period and a 6-month moratorium after loan disbursement. 

The repayment period depends on the loan amount:

NSFDC Education Loan: Different Types of Scheme

NSFDC offers various loan schemes to support marginalised communities in pursuing education and skill development. These schemes provide financial assistance through different channels and institutions, with varying loan limits, interest rates, and repayment terms. 

Below are the details of the different types of education loan schemes available:

NSFDC Education Loan: Non-Credit Based Scheme

The National Scheduled Castes Finance and Development Corporation (NSFDC) offers various non-credit-based schemes to promote skill development and empowerment of marginalised communities. These schemes focus on providing opportunities for training in job-oriented fields, helping individuals from vulnerable backgrounds gain skills that enhance their employability. 

Below are the details of two key schemes under NSFDC:

NSFDC Education Loan: Term Loan Scheme

The NSFDC Term Loan Scheme is designed to support young entrepreneurs from the Scheduled Caste community. This scheme provides a term loan of up to ₹50 lakhs, helping individuals to establish or expand their businesses. 

The following table outlines the loan amounts and corresponding interest rates for Scheduled Caste applicants and other beneficiaries under the NSFDC Term Loan Scheme.

Eligible Sectors for Term Loan Scheme

The following list highlights the various sectors eligible for financial assistance under the NSFDC Term Loan Scheme, aimed at supporting the growth of businesses within these fields.

NSFDC Education Loan: Refinance Scheme

The National Scheduled Castes Finance and Development Corporation (NSFDC) offers refinance under the Educational Loan Scheme (ELS) to students who have already received the full disbursement of their education loan from a bank. This refinance helps facilitate loan repayment for students pursuing professional and technical courses.

The process of refinancing claims under the NSFDC education loan scheme involves the following steps:

Retrospective Refinance: 

Refinance has been allowed for cases financed by banks since the introduction of NSFDC’s ELS scheme on 01.12.2009.

Eligibility Criteria: 

Banks must select applicants based on NSFDC’s eligibility criteria.

Selection Communication: 

Banks will communicate the selection or rejection of loan applications to the applicants.‍

Submission of Details: 

Banks must submit state-wise consolidated details of cases financed under the ELS scheme in the prescribed format (Annexure-I).

Appraisal and Disbursement: 

After completing the necessary formalities, NSFDC will appraise the proposals, issue a Letter of Intent (LOI) for approved cases, and disburse funds to the bank.‍

Switch-over of Accounts: 

Banks must switch individual loan accounts of beneficiaries under NSFDC schemes within 30 days from the date of disbursement by NSFDC. Banks will inform NSFDC using the prescribed format (Annexure II).

Utilisation Certificate: 

As per Annexure II, the amount refinanced by NSFDC will be treated as utilised upon receipt of the utilisation certificate.

Beneficiary Communication: 

The switch-over of individual loan accounts must be communicated to beneficiaries upon receipt of funds from NSFDC.

Repayment Schedule: 

Banks shall recover loan instalments from beneficiaries as per the repayment schedule set by the bank.

No Sanction Limit: 

There is no maximum limit on the refinance amount, and claims will be sanctioned irrespective of the loan amount.

Minimum Refinance Amount: 

The minimum refinance amount for each case will be Rs. 25,000/- or more.

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NSFDC Education Loan: Affiliated Training Partners

NSFDC collaborates with various institutions and organisations to support students pursuing technical and vocational training. 

Below is a list of NSFDC's affiliated training partners:

NSFDC Education Loan: Channel Partners

The following are the Channel Partners for NSFDC Education Loan across various states:

The NSFDC Education Loan Scheme promotes educational opportunities for Scheduled Caste students, offering financial assistance for domestic and international studies. With attractive terms, including low interest rates, flexible repayment, and comprehensive coverage of education-related costs, the scheme ensures deserving students can pursue their academic aspirations. 

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Who is eligible for an NSFDC education loan?

NSFDC provides education loans to Scheduled Castes (SC) individuals with an annual family income of up to INR 3.00 lakhs. Eligible candidates must apply through the District Offices of State Channelising Agencies (SCAs) or Channel Partners of NSFDC.

What is the interest rate for an NSFDC education loan?

NSFDC charges an interest rate of 4% to SCAs/CAs, while SCAs/CAs charge 8% to the beneficiaries. The repayment period for the loan is up to 5 years, including a moratorium period of 6 months. Loan repayment can be made in quarterly or half-yearly instalments.

What is the NSFDC scheme?

The National Scheduled Castes Finance and Development Corporation (NSFDC) was established in 1989 as a non-profit company under Section 8 of the Companies Act, 2013. Its primary objective is to finance income-generating activities for Scheduled Caste beneficiaries with an annual family income of up to INR 3.00 lakhs.

Is there any government scheme for education loans?

Yes, the Government of India has introduced the PM Vidyalakshmi Scheme, which provides financial assistance to meritorious students. Under this scheme, students can avail themselves of collateral-free and guarantor-free loans to pursue quality higher education.

How can I contact NSFDC?

You can contact NSFDC at the following details:
Address: NSFDC, Delhi Office, 110 092
Phone: 011-22054392, 22054394, 22054396
Fax: 011-22054395
Email: support-nsfdc[@]nic[dot]in
Website: www.nsfdc.nic.in
Additionally, NSFDC has liaison centres in Mumbai, Kolkata, and Bengaluru.

What is the NSFDC scheme for SC students?

NSFDC sponsors employment-oriented skill development training programs for Scheduled Caste individuals. There is no income criterion for participating in these Skill Development Training Programs (SDTPs), and they are aligned with the National Skills Qualifications Framework (NSQF).

Can I repay my education loan early?

Yes, you can repay your education loan early. The repayment for most student and scholar loan schemes begins 12 months after completing the course or 6 months after securing a job, whichever is earlier. Depending on the lender's policy, immediate repayment may have terms regarding prepayment penalties.

What is Saraswat bank education loan college list?

Saraswat Bank offers education loans for courses at recognised institutions like IITs, IIMs, XLRI, ISB, NIFT, and NID. Eligible courses include:
Graduate, postgraduate, and PG diploma programs
ICWA, CA, CFA, and other professional courses
Aeronautics, pilot training, shipping, and nursing courses
Programs at reputed foreign universities

What are the documents required for a Saraswat Bank education loan?

The Saraswat Bank education loan documents required include:
Loan application form, photograph, photo ID, and residence proof of the applicant and guarantor.
Proof of admission, course fee estimate, and fee receipts.
Passport and visa (for study abroad).
Income proof:
Salaried: Last 3 months’ salary slip, IT returns, Form 16, and 3-month bank statement
Businessmen: Last 3 years’ profit & loss, ITR, and 3-month bank statement.

Can I get an INR 40 lakh education loan without collateral?

Yes, many banks and financial institutions offer education loans of up to INR 40 lakh or INR 50 lakh without requiring collateral, especially under government-backed schemes like the PM Vidyalakshmi scheme.

What happens if I don’t repay my education loan?

Failure to repay an education loan may lead to serious consequences, including:
Loss of access to deferment, forbearance, and flexible repayment plans.
Wage garnishment, where a portion of your salary may be deducted to repay the loan.
It is advisable to contact your lender and discuss repayment options if you are facing difficulties.

Can I cancel my education loan after 1 year?

While it may not be possible to "cancel" the loan entirely after 1 year, you can repay the remaining loan early. However, depending on your lender’s terms, this may involve prepayment charges.

Will student loans expire after a certain period?

Yes, under certain conditions, student loans can be forgiven after a specified time:
Public Service Loan Forgiveness: After 10 years of qualifying payments.
Income-Driven Repayment (IDR) Plans: After 20 years of payments (for undergraduate loans) or 25 years (for graduate loans), the remaining balance may be forgiven.

What education loan scheme was introduced by the Modi government?

The PM Vidyalakshmi Scheme enables students who secure admission in Quality Higher Education Institutions (QHEIs) to obtain collateral-free and guarantor-free loans. This scheme covers tuition fees and other expenses related to higher education.