Education Loans in India: PM-Vidyalaxmi, Interest Subsidy and Bank Rates
What the central PM-Vidyalaxmi scheme offers, how interest subvention and the credit guarantee work, and the bank rates reported in October 2026.
01PM-Vidyalaxmi
PM-Vidyalaxmi was launched on 6 November 2024, with its portal following on 25 February 2025. A government document of July 2026 lists these terms.
- Loans are collateral-free and guarantor-free, with no cap on the amount; the loan depends on course fees and related costs.
- Interest is capped at the bank’s external benchmark rate plus 0.5%.
- Moratorium of the course period plus 1 year, with repayment up to 15 years afterwards.
- A 75% government credit guarantee on loans up to ₹7.5 lakh.
- Interest subvention of 3% on loans up to ₹10 lakh for family income up to ₹8 lakh, during the moratorium only.
- Full subvention for family income up to ₹4.5 lakh on technical or professional courses at approved institutions, on loans up to ₹10 lakh (the CSIS scheme).
- Eligible institutions: the top 100 NIRF-ranked institutions, the top 200 NIRF state government institutions and all other central government institutions, about 1,425 in all. Management quota, NRI quota and foreign campuses are excluded.
Students receiving other scholarships, subvention or fee reimbursement are not eligible for the subvention. The 3% subvention is limited to 1 lakh fresh slots a year, and benefits apply once per course level.
02Reach of the Scheme
A news report of 28 July 2026 says 1,12,817 loans worth ₹15,634.78 crore had been sanctioned up to 21 July 2026. The credit guarantee fund is reported to have issued 14,65,880 guarantees worth ₹59,843.74 crore since 2015.
03Reported Bank Rates
| Bank | Rate |
|---|---|
| State Bank of India | 6.90% to 9.90% |
| Bank of Baroda | 7.10% to 10.15% |
| Canara Bank | 7.50% to 10.35% |
| Punjab National Bank | From 7.50% |
| HDFC Bank | From 10.50% |
04Collateral
Public sector banks typically do not ask for collateral up to ₹7.5 lakh, according to the comparison site. The rule differs by bank and was not confirmed for each.
05How to Apply
- Open the PM-Vidyalaxmi or Vidya Lakshmi portal and complete the common education loan application.
- Choose banks and track the application on the portal.
- If eligible for subvention, the benefit is credited to a digital wallet in the PM-Vidyalaxmi app and then moved to the loan account.
06West Bengal Students
The Higher Education Department’s loans page lists the central terms above and names Canara Bank as the nodal bank for CSIS. The state’s own scheme is the West Bengal Student Credit Card. No rule on combining the two was found, and both bar stacking with other subvention.
07Official Links
08Frequently Asked Questions
Is collateral needed for an education loan?
Not under PM-Vidyalaxmi. The loan is collateral-free and guarantor-free for eligible institutions.
How much interest subvention is available?
3% during the moratorium on loans up to ₹10 lakh for family income up to ₹8 lakh, and full subvention up to ₹4.5 lakh income for technical or professional courses.
Which institutions qualify?
The top 100 NIRF-ranked institutions, top 200 NIRF state government institutions and all other central government institutions.
What is the interest rate?
It is capped at the bank’s benchmark rate plus 0.5% under the scheme. Reported bank rates run from about 6.90% to 10.50%.
This page is updated periodically. Benefit amounts, limits, dates and portal menus change; for the most current and binding information, always refer to the official portal or the implementing office.