Kolkata: Among all the retail loans, education loan could well be the lowest in number, but they perhaps add the biggest value. Education loans not only makes higher education accessible to a number of students but also prepares them for a profesisonal life and prosperity in the following years. Since India has now firmly entered an interest rate downcycle, it is expeceted that the rate of interest on education loans will go down.
In fact, India’s second largest lender, Punjab National Bank (PNB), has slashed interest rates on its education loans by 20 basis points. The scheme of education loans is called Vidyalaxmi Scheme (also referred to as PM-Vidyalaxmi). This scheme is a special crafted education loan which is free from collaterals and guarantors. It is for students who secure admission by the dint of their merit to quality higher education institutions in the country. PNB said in a statement: “The Vidyalaxmi Scheme is designed to provide comprehensive financial support to students towards quality-driven higher education. This initiative is available to candidates who secure admission on merit to 860 identified Quality Higher Education Institutions (QHEIs) across India.”
Salient features of the Vidyalaxmi scheme
Who are eligible: Indian Nationals (including NRIs and OCIs) who are pursuing graduation and/or post-graduation degree/diploma courses in Quality Higher Education Institutions
How much fund: The amount will be based on the need of the applicant
Margin (AAA & AA Institutes): NIL
Margin for other institutes: NIL up to Rs 4 lakh; 5% for amounts above Rs 4 lakh
News rate of interest: Institute-specific, starts from 7.50%
Collaterals: No collateral required; parents or guardians to be joint borrowers
It must be noted that there are 85 institutes that have been categorised as AAA, 152 institutes that are in the AA category and 623 institutes of higher learning that have been classified as A.
Subsidy benefits
For those students who hail from families with annual income of up to Rs 4.5 lakh, 100% interest subvention will be offered for technical and professional courses under the PM-USP CSIS scheme. Furthermore, these studnets will be eligible for 3% interest subvention on other courses under the PM-Vidyalakshmi scheme. For studnets coming from families with annual income between Rs 4.5 lakh and Rs 8 lakh, a 3% interest subvention will be offered for both technical/professional and other courses under the PM-Vidyalakshmi scheme.
With the rise in the cost of higher education, education loans have become a much-sought after financing option for a number of students. Fortunately for them, the interest rate downcycle in India implies lowering cost of funds for them. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
