Skill Loan Scheme: Eligibility, Benefits & How to Apply

The Skill Loan Scheme, launched in 2015, provides institutional credit to people interested in skill development courses. These courses are aligned with the National Occupations Standards and Qualification Packs. Institutes are trained in accordance with the National Skill Qualification Framework (NSQF). The Skill Loan Scheme applies to every member bank of the Indian Banks’ Association (IBA). It provides comprehensive guidelines for banks to operationalise the skill loan scheme.

In this blog, discover the eligibility requirements & advantages of the skill loan scheme. Also, learn how you too can apply!

What is the Skill Loan Eligibility Criteria?

To be eligible for the Skill Loan Scheme, an individual must have:

• Secured admission into a course that is run by the Industrial Training Institutes (ITIs),
• Secured admission into a course at a polytechnic,
• Got admission in a school that is recognised by the Central/State education Boards,
• Got admission in a college affiliated to a recognised university,
• Trained with partners that are affiliated with the National Skill Development Corporation (NSDC)/Sector Skill Councils, State Skill Corporation, and State Skill Mission.

Do the eligibility requirements seem difficult to meet? Choose Poonawalla Fincorp instead for an Education Loan with simplified criteria, and you'll be well on your way to levelling up in 2026!

What Are the Skill Loan Benefits?

Skill loan benefits include NSQF-aligned courses, flexible financing options and competitive interest rates. As per the Ministry of Skill Development and Entrepreneurship, the Skill Loan scheme "ensures access to institutional credit to aspirants to pursue skill courses, especially higher-end, fee-based skilling courses for new age skills.”

Here are the benefits of skill loans discussed in detail: 

1. Aligned to the National Standards

The courses are aligned to the National Skills Qualifications Framework (NSQF). This ensures that the industry-relevant skills are taught and a multitude of job prospects are unlocked. These recognised certifications will definitely boost career growth overall.

2. Convenient Financing Options

You can get funding from ₹5,000 up to ₹7,50,000 for different skill development courses. Easily cover charges associated with courses, assessments and study materials. 

3. No Minimum Limit on the Course Duration

There are no restrictions applicable to the course duration. You can choose the timeline at your convenience. Thus, wield the flexibility to pursue courses that fit your goals and schedule. Let time constraints no longer affect your focus on learning.

4. Attractive Interest Rates

Interest rates start at the base rate (MCLR) and include an add-on of up to 1.5%. These rates are competitive, which makes skill development much more affordable and attainable.

5. Moratorium Period

Unlock a moratorium period that is equal to the duration of the course. This eases the financial burden on individuals who are focused on studying. They can focus on learning without worrying about immediate repayment obligations.

6. No Requirement for Collateral

One does not have to pledge collateral, which makes these loans accessible to more people. It reduces the financial strain on the individual and encourages skill development. Plus, the approval process is easy and quick.

7. Flexible Repayment Options

One can repay within 3 to 7 years, depending on the loan amount. The tenure options include:

• Up to 3 years: Loans up to ₹50,000
• Up to 5 years: Loans up to ₹50,000 - ₹1 lakh
• Up to 7 years: Loans above ₹1 lakh

8. Comprehensive Coverage

Individuals can cover course charges and expenses associated with exams and study materials. A direct payment method to the training institute is maintained, ensuring a hassle-free system. 

9. Credit Guarantee Cover

One can get a credit guarantee to cover up to 75% of the outstanding loan amount. This is administered by the National Credit Guarantee Trust Company (NCGTC); a nominal charge applies. It reduces the risk on the lender’s end, making the loans much more accessible.

What are the Simple Steps for a Skill Loan Application?

Step 1: Start the application process by registering on the Vidya Kaushal portal. Documents required at this stage include identity proof, address proof, and income proof (of self/guardian, if available).

Step 2: Once you’ve successfully registered on the portal, select your preferred sector, role or centre.

Step 3: Visit the preferred counselling centre.

Step 4: Raise the loan request through this centre, if necessary.

Step 5: You must now evaluate the loan offers and accept or reject them based on your expectations.

Step 6: After confirmation, wait for the loan amount to be disbursed directly to the partner or centre.

To Conclude

The skill loan scheme empowers learners to skill & scale up. Unlock flexible tenure options, competitive rates, and a hassle-free repayment structure. You can now pursue NSQF-aligned courses and take your career to the next level.

Don’t stop there! Opt for an Education Loan with Poonawalla Fincorp and take intentional charge of your future today. Get approved for a loan amount up to ₹1 Crore without having to pledge collateral. With interest rates starting at only 11.25%* p.a., you can study and develop your skills without over-stressing about skyrocketing interest rates. Apply via a few simple steps online and tap into your highest potential!

FAQs

What is the maximum amount of loan I can avail in the Skill Loan Scheme?

If you meet the eligibility criteria, you can avail a revised maximum loan amount up to ₹7,50,000.

What does the moratorium period signify?

A moratorium period is a specific period of a loan tenure during which the borrower doesn't have to repay any amount. This period can also be described as a “waiting period” before the borrower must start repaying the loan's EMIs.

What does MCLR stand for under interest rate?

MCLR, or the Marginal Cost of Lending Rate, is the minimum lending rate under which a bank is not allowed to lend. This rate varies across banks.

Do I have to pledge an asset to get an Education Loan?

No, you don't have to pledge collateral to get an Education Loan with Poonawalla Fincorp.