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This scheme offers loans up to ₹1.5 Lakhs to students pursuing skill development courses at ITIs, Polytechnics, Read More... and other recognized institutions. Read less

Details

In today's competitive world, acquiring new skills is key to career growth. Recognizing this, the Indian government launched the Skill Loan Scheme in July 2015. It's designed to help individuals finance their skill development journey through accessible loans.

What Is This Scheme?

The Skill Loan Scheme is a government initiative aimed at providing financial support for skill development courses. These courses must be aligned with National Occupations Standards and Qualification Packs, and lead to a certificate, diploma, or degree from recognised training institutes under the National Skill Qualification Framework (NSQF).

Who Can Benefit From This Scheme?

This scheme is for anyone who has gained admission into a skill-oriented course. This includes students enrolling in institutions like Industrial Training Institutes (ITIs), Polytechnics, or schools recognised by Central or State education boards. It also covers courses offered by colleges affiliated with recognised universities, and training partners associated with the National Skill Development Corporation (NSDC), Sector Skill Councils, State Skill Missions, or State Skill Corporations.

Why This Scheme Is Important

The primary goal is to make quality skill education affordable and accessible. By offering loans without collateral, the scheme removes a significant barrier for many aspiring individuals. It also ensures that the training provided leads to recognised qualifications, improving employability and contributing to the nation's skilled workforce.

Objective

This scheme offers loans up to ₹1.5 Lakhs to students pursuing skill development courses at ITIs, Polytechnics, and other recognized institutions.

Benefits

Facilitation of composite loan (inclusive of term loan and working capital) between ₹10 Lakhs and ₹100 Lakhs. Rupay debit card to be issued for convenience of the borrower.

The web portal by SIDBI provides hand-holding support through a network of agencies engaged in training, skill development, mentoring, project report preparation, application filling, work shed / utility support services, subsidy schemes etc.

Sources and references

Guidelines

Who Can Apply?

To be eligible for this scheme, you must meet the following criteria:

You must have secured admission in a course run by:
- Industrial Training Institutes (ITIs)
- Polytechnics
- Schools recognised by Central or State education Boards
- Colleges affiliated to a recognised university
- Training partners affiliated with the National Skill Development Corporation (NSDC) / Sector Skill Councils, State Skill Mission, or State Skill Corporation
The course must be aligned with the National Skill Qualification Framework (NSQF).

How to Apply

The Skill Loan Scheme is operationalised through member banks of the Indian Banks' Association (IBA) and other banks or financial institutions as advised by the RBI. To apply:

Contact Your Bank: Reach out to your nearest branch of a participating bank. You can inquire about the Skill Loan Scheme and its specific procedures.
Fill Application Form: Obtain the loan application form from the bank and fill it out carefully.
Submit Documents: Along with the form, submit all the required documents.
Loan Sanction: If you meet all the criteria, the bank will process your application and sanction the loan.

For more specific details on application procedures, it's best to consult directly with the banks offering the scheme.

Documents You Might Need

While the exact list can vary slightly between banks, you will generally need to provide the following:

Proof of Identity (e.g., Aadhaar Card, Voter ID, PAN Card)
Proof of Address (e.g., Utility Bills, Bank Statement)
Proof of admission to the skill development course
Details of the course and the training institute
Proof of income (of yourself or your guardian, if applicable and available)

FAQ’s

What is the maximum loan amount available under the Skill Loan Scheme?

Eligible students can avail a loan of up to ₹1,50,000 under this scheme to cover their skill development course expenses.

Can I get a loan for any course, or does it have to be a specific type?

The loan is specifically for skill development courses that are aligned with the National Skill Qualification Framework (NSQF) and lead to a certificate, diploma, or degree from a recognised institute.

What does 'MCLR' mean in the context of the interest rate?

MCLR stands for Marginal Cost of Lending Rate. It's the minimum interest rate below which a bank is not allowed to lend money. This rate can differ from one bank to another.

How does the moratorium period work for this loan?

The moratorium period is a specific time during the loan term when you don't have to make any repayments. For the Skill Loan Scheme, this period typically lasts for the entire duration of your course.

Do I need to provide any security or collateral to get this loan?

No, one of the key features of this scheme is that it does not require you to provide any collateral or security to avail the loan.

What expenses are covered by the Skill Loan?

The loan covers your course fees, which are paid directly to the training institute. It also includes expenses necessary for completing the course, such as assessment fees, examination charges, and study materials.

What is the repayment timeline for the loan?

The repayment period varies based on the loan amount. Loans up to ₹50,000 can be repaid over a period of up to 3 years. For loans between ₹50,000 and ₹1 Lakh, the repayment tenure is up to 5 years. For loans exceeding ₹1 Lakh, you have up to 7 years for repayment.