Central Scheme of Interest Subsidy for Education Loans

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Central Scheme of Interest Subsidy for Education Loans

Government of India, Ministry of Human Resources Development, Department of Higher Education has formulated an Interest Subsidy for Education Loans for the students of economically weaker section (EWS) for pursuing technical / professional courses in India.

Salient features of scheme are as under

  • Scheme will be named as “Education Loan Interest Subsidy Scheme” specially designed to provide Interest Subsidy for the period of moratorium on educational loans taken by students from Economically Weaker Sections from our Bank under the educational loan scheme of the Indian Banks’ Association to pursue Technical / Professional Education studies in India.
  • Course fee (all inclusive) may exceed Rs. 10 lacs but subsidy amount will be calculated only upto loan amount of Rs. 10 lacs.
  • Government of India will provide full interest subsidy during the moratorium period on loans taken by students from the Bank. For loans sanctioned prior to 01.04.2009, only interst on the amount disbursed after 01.04.2009 are eligible.
  • After the moratorium period interest will be borne by student.
  • Student should belong to Economically Weaker Section (not on social background) having parental family income from all sources not more than Rs. 4.5 lac per annum.
  • State Government will designate appropriate authority or authorities who are competent to issue Income certificate, based on economic index and not social background, for the purpose of this scheme.
  • Subsidy will be available only to students enrolled in recognized Technical / Professional courses (after XII) in India in Educational Institutions established by Acts of Parliament, other institutions recognized by the concerned Statutory Bodies, Indian Institutes of Management (IIMs) and other Institutions set up by the Central / State Government.
  • Interest rates charged on the loan shall be as per interest rates applicable under our Education Loan Scheme.
  • Interest subsidy shall be available to the eligible students only once, either for first undergraduate degree course or the post graduate degrees / diplomas in India. Interest subsidy shall, however, be admissible for integrated courses (graduates + post graduates).
  • Subsidy shall not be available if a student discontinues the course in midstream, expelled from Institutions on disciplinary or academic grounds.
  • There would be tag / marker on the degree and marksheet of the student indicating his repayment liabilities. Electronic tag will enable employers to identify loanees. Nodal Bank for the scheme shall be Canara Bank and monitoring shall be finalized in consultation with the Canara Bank.
  • List of Technical / Professional courses for which the scheme would be applicable, shall be publicized from time to time by UGC and AICTE and the same would be immediately displayed at their websites, which may be accessed for verification purposes.
  • Agreement is also to be signed by the student and Bank.

For more details, contact our branch where they have availed education loan.


Who can apply for the loan?

Any Indian National fulfilling criteria stated above is eligible for education loan.


Who can be co-obligant?

The parents, guardians, friends and relative can be co-obligant.


How much does Bank of Baroda lend?

Bank of Baroda extend need based finance subject to repaying capacity of the parents/student with margin upto following ceilings.

List of FAQs
Studies in India Maximum Rs. 10.00 lacs
Studies abroad Maximum Rs.20.00 lacs.

For how long a period can I get the loan?

We grant loan for a term of 5-7 years after repayment holiday/moratorium.


What is the repayment holiday / moratorium period?

Course period + 1 year or 6 months after getting job whichever is earlier.


What is the mode of repayment?

The accrued interest during the repayment holiday period to be added to the principal and repayment in Equated Monthly Instalment (EMI) is fixed.


Do you offer any concession?

Yes, we do offer 1% interest concession to student loanee, if the interest is serviced during the study period when repayment holiday is specified for interest / repayment under the scheme. Additionally, 1% interest concession is provided to girl students.


What type of interest do you charge under your Education Loan Scheme?

We charge simple interest at monthly rests during the repayment holiday /moratorium period.


Do you levy any penalty for default under the scheme?

Yes, we charge penal interest @ 2% on overdues amount in the loan exceeding Rs.4 lacs.

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Monthly Payment Rs. 1,977.00

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