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What is Education Loan Subsidy?

Education loan interest subsidy schemes help reduce the interest component of the loan and often aim to benefit certain demographics, like female students or applicants pursuing professional courses. For instance, the CSIS education loan subsidy scheme is devoted towards helping economically weak students enrol for technical or professional courses in India and it ensures that the Government pays the interest during the moratorium. Interest subsidies help students from financially weaker backgrounds pursue their dreams and guarantee affordable repayment.

What are the Advantages of Education Loan Interest Subsidy?

  • Interest rate concession of 0.5-1%
  • 100% subsidy for processing charge
  • No requirement for collateral or third-party guarantee
  • Rebate on interest paid towards repayment of the education loan, especially during the moratorium period
  • Deductions on interest repayment under Section 80E of Income Tax Act. This reduces the effective rate of interest
  • Preference for students from economically weak backgrounds or minority communities
  • Waiver of loan principal

Depending on which education loan interest subsidy scheme it is, most or some of these benefits will apply.

What are the Common Education Loan Schemes?

  1. Central Scheme of Interest Subsidy (CSIS)
  2. This scheme came into existence to help economically weaker students pursue professional and technical courses. The CSIS subsidy scheme is available to those having annual parental income up to Rs.4.5 lakh. The CSIS education loan subsidy is a subsidy of the interest incurred during the moratorium period.

  3. Dr. Ambedkar Central Scheme of Interest Subsidy on Education Loan
  4. Beneficiaries of this scheme belong to the Economically Backward Classes (EBCs) or Other Backward Classes (OBCs). This scheme helps meritorious students pursue Masters, M.Phil., and Ph.D. courses overseas by providing an interest subsidy during the moratorium period.

  5. Padho Pardesh Central Scheme of Interest Subsidy for Minorities
  6. Members of the minority communities like Muslims, Christians, and Sikhs can benefit from this scheme if they wish to pursue their studies abroad. The candidate’s annual family income must not exceed Rs.6 lakh. The scheme covers the interest payable during the moratorium period.

If you are eligible for an interest subsidy scheme, fill out the relevant form, such as the CSIS education loan subsidy form and once you make an application, track your education loan subsidy status. A good way to access various education loans and schemes is to use the Vidya Lakshmi portal.

If you cannot benefit from an education loan interest subsidy scheme, find the eligibility too strict, or the loan amount to little, consider a loan against property from Bajaj Housing Finance. It offers ample finance at an economical interest rate and for a long tenor of up to 18 years. You can use the funds for tuition fees, lodging expenses, travel costs, and any other purpose. Apply now to finance your child’s dreams without hassles!