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Skill Loan Scheme

SL

Published by Monika, Editor

Revised Official listing text, not yet reviewedHow entries are compiled

Program brief

Form of supportCash, paid into the bank account
Meant forStudents
LevelCentral
Run byMinistry Of Skill Development And Entrepreneurship
FieldBanking,Financial Services and Insurance
Started2015
How to applyOnline
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Contents of this entry
  1. Overview
  2. Benefits
  3. Eligibility
  4. Documents
  5. Application steps
  6. Questions and answers

Overview

Skill Loan Scheme

The scheme aims to support youth by providing access to institutional credit for skill training courses. Through this scheme, collateral-free loans and credit guarantee support are provided to eligible borrowers for undertaking skill training programmes.

The scheme "Skill Loan Scheme" by the Ministry of Skill Development and Entrepreneurship (MSDE), Government of India, aims to support youth who wish to undergo skill training programmes in the country and ensure access to institutional credit for pursuing skill courses. Through this scheme, collateral-free loans without third-party guarantee and credit guarantee support are provided to eligible borrowers for undertaking skill training courses, including higher-end, fee-based skilling courses for new-age skills. The scheme is implemented through eligible lending institutions, including Scheduled Banks, Non-Banking Financial Companies (NBFCs), and Non-Banking Finance Company Micro Finance Institutions (NBFC-MFIs).

Objectives:

  • To support youth seeking skill training opportunities in the country.
  • To ensure access to institutional credit for pursuing skill courses.

Further facts from the listing

Scheme typeCentral Sector Scheme
Scheme forIndividual
DBT (direct bank transfer)No

Benefits

  1. The maximum loan limit under the Scheme has been enhanced from Rs. 1,50,000 to Rs. 7,50,000.
  2. The minimum and maximum loan limit under the Scheme are Rs. 5,000 and Rs. 7,50,000 respectively.
  3. The loan is provided without any collateral security and/or third-party guarantee.
  4. Non-Banking Financial Companies (NBFCs) and Non-Banking Finance Company Micro Finance Institutions (NBFC-MFIs) have been included as eligible lending institutions in addition to Scheduled Banks under the Scheme.
  5. The interest rate charged by Member Lending Institutions should not be more than:
    • 1.5% per annum over External Benchmark Lending Rate (EBLR) for Scheduled Banks.
    • 21% per annum for NBFC/NBFC-MFIs.
  6. The Scheme provides guarantee cover to the extent of 70% to 75% of the amount in default.
  7. The claim payout to an eligible Lending Institution during the initial years is capped at 20% of the total disbursement made by the institution under the Scheme during a year.
  8. No processing fee is charged by Banks.

Repayment Tenure:

Amount of LoanTenure
Loan up to Rs. 50,000Up to 3 years
Loan between Rs. 50,000 to Rs. 1,00,000Up to 5 years
Loan above Rs. 1,00,000Up to 7 years

Eligibility

Age
14 to 80 years
Also for
Students
  1. The applicant should be an Indian national.
  2. The applicant should have secured admission to a skill training course.
  3. The applicant should meet the minimum qualification criteria required to undergo the skill training course.
  4. The applicant should be enrolled in National Skill Qualification Framework (NSQF) aligned courses and/or Non-NSQF-aligned courses offered by training entities onboarded on the Ministry of Skill Development and Entrepreneurship’s Skill India Digital Hub (SIDH) platform.
  5. The applicant should be admitted to a course run by:
  • Industrial Training Institutes (ITIs).
  • Polytechnics.
  • Schools recognised by Central or State Education Boards.
  • Colleges affiliated with recognised universities.
  • Training partners affiliated with the National Skill Development Corporation (NSDC).
  • Sector Skill Councils.
  • State Skill Mission.
  • State Skill Corporation.

Who cannot apply

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Documents

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Application steps

Online

Step 1: The interested candidate needs to register on the Vidya Kaushal Portal.

Step 2: The candidate needs to submit the required documents, including but not limited to:

  • Proof of Identity.
  • Proof of Address.
  • Proof of Income (of self or guardian, if available).

Step 3: After successful registration, the candidate can select their preferred sector, role, and centre.

Step 4: The candidate needs to visit the selected centre for counselling.

Step 5: If required, the candidate can raise a loan request through the centre.

Step 6: The candidate can evaluate the available loan offers and accept or reject them based on their preference.

Step 7: After confirmation, the loan amount will be disbursed directly to the partner/centre.

Questions and answers

What is the Skill Loan Scheme?

The Skill Loan Scheme is a scheme launched to support youth who wish to undergo skill training programmes in the country by providing access to institutional credit for pursuing skill courses.

When was the Skill Loan Scheme launched?

The Skill Loan Scheme was launched on 15th July 2015.

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

The maximum loan amount available under the Scheme is Rs. 7,50,000/-.

What is the minimum and maximum loan limit under the Scheme?

The minimum loan limit under the Scheme is Rs. 5,000/-, and the maximum loan limit is Rs. 7,50,000/-.

Is any collateral security or third-party guarantee required for the loan?

No, the loan is provided without any collateral security and/or third-party guarantee.

Who can apply for the Skill Loan Scheme?

Any individual of Indian nationality who has secured admission to eligible skill training courses and meets the required eligibility criteria can apply under the Scheme.

Which institutions provide loans under the Skill Loan Scheme?

Loans under the Scheme are provided through eligible lending institutions, including Scheduled Banks, Non-Banking Financial Companies (NBFCs), and Non-Banking Finance Company Micro Finance Institutions (NBFC-MFIs).

What is the repayment period of the loan under the Scheme?

The repayment period is:

  • Loan up to Rs. 50,000/-: Up to 3 years.
  • Loan between Rs. 50,000/- and Rs. 1,00,000/-: Up to 5 years.
  • Loan above Rs. 1,00,000/-: Up to 7 years.

What courses are eligible under the Skill Loan Scheme?

The applicant can avail a loan for National Skill Qualification Framework (NSQF) aligned courses and/or Non-NSQF-aligned courses offered by training entities onboarded on the Skill India Digital Hub (SIDH) platform.

Is any processing fee charged by banks for the Skill Loan Scheme?

No, banks do not charge any processing fee under the Scheme.

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