Hello friends! Imagine your child secures admission to an IIT or a top foreign university, but the burden of fees and expenses breaks the family. This pain is shared by every Indian parent, who wants to give their children the best education in the world, but is forced to give up due to empty pockets. But wait!
Today, I’m telling you about a way to ease the burden by combining an education loan with scholarship support. This will not only give wings to your dreams but also reduce the pressure of repayment.
Let’s understand step by step how it works and how you can adopt it. Read to the end, because the tips hidden here will prove to be a game-changer for you!
What Is an Education Loan and How to Add Scholarship Support?
Friends, education loans are a financial tool that provides students with the necessary funding for higher education – whether in India or abroad. Under government schemes, such as the Pradhan Mantri Vidya Lakshmi Yojana, you can avail of 22 types of loans and scholarship schemes from 13 banks on a single portal.
Scholarship support here means that merit-based or category-based grants (such as those for families below the poverty line) can subsidize your loan interest. For example, national scholarships available on the Ministry of Education’s website provide meritorious students from poor families with daily expenses, reducing the loan amount.
This combination is unique because a loan alone increases the repayment burden, but adding a scholarship can reduce your net outlay by 20–30%. Remember, all of this comes with a government guarantee, which protects you.
Who Is Eligible? Keep the Eligibility and Application Process Simple
Now the question arises – are you eligible? Simply put, Indian citizens enrolled in a recognized institution are eligible. The age limit is generally 18–35 years, and the family’s annual income must be less than ₹8 lakh for some schemes. According to Testbook’s guide, students from the EWS (economically weaker section) receive priority for professional courses.
How to apply? The easiest way is to register on the Vidya Lakshmi portal. Here, you can apply to multiple banks by filling out a single form.
Required documents: Aadhaar card, admission letter, marksheet, income proof, and photo.
SBI’s website suggests applying by being redirected to the portal through the YONO app – just 10 minutes!
For scholarships, check the National Scholarship Portal. Students from backward classes can receive special support for technical courses under the NBCFDC scheme.
Tip: Scholarships directly cover loans if they appear on the merit list.
Key Schemes: A Perfect Blend of Loans and Scholarships
Friends, there are several schemes in India that link education loans with scholarships. Let’s look at some of the top ones:
- Central Interest Subsidy Scheme (CSIS): According to Indian Bank, loans for foreign master’s or PhDs receive interest subsidy. Poor families receive zero interest during the moratorium period (until the course is completed)!
- Bank of Baroda Schemes: Baroda Vidya covers schooling from graduation, while Baroda Scholar covers foreign studies. Scholarship integration reduces the interest rate by 8–10%.
- Personal Loan Options: If you need immediate funds, take a personal loan from IIFL Finance or Hero FinCorp, but an education loan is preferable because it offers tax benefits under Section 80E, with EMIs waived for up to 8 years.
These schemes cover technical, medical, and management courses, and the subsidy can cover loan amounts ranging from ₹10 lakh to ₹1.5 crore. According to the Policybazaar guide, an I-20 form is required for international courses.
Interest Rates, Benefits, and Repayment: Plan Smart
As for interest rates, public sector banks offer 7.5–11%, with private banks slightly higher. However, scholarship support reduces the effective rate to 4–6%.
Benefits: 100% funding, no processing fees in some schemes, and repayment begins 6–12 months after the course ends.
Bajaj Finserv says a good credit score can lower the rate.
Repayment Tip: Use an EMI calculator and prepay with part-time jobs. Remember, defaults damage your credit score, so prioritize timely payments.
Overcome Challenges: Practical Advice
Sometimes, lack of documentation or credit history becomes a problem. Solution? Check the Bank of Baroda subsidy page – collateral-free loans are available.
If you’re going abroad, submit your course approval letter first. Finally, discuss with your family – this is an investment in the future.
Friends, by following this roadmap, your child will not only study but also shine. Visit the portal today and get started. I look forward to hearing your success story – share it in the comments!