What Are the Benefits of the PM-Vidyalaxmi Scheme?
PM-Vidyalaxmi does three things for students at India's top institutions: it removes the need for collateral, it caps the interest rate, and for lower- and middle-income families it pays part or all of the interest while you study. Here is each benefit and what it's worth.
Quick answer
- No collateral, no guarantor — backed by a 75% government guarantee on loans up to ₹7.5 Lakh.
- Interest capped at the bank's EBLR + 0.5%, with up to 1% more off if you pay interest while studying.
- 3% interest subsidy for family income up to ₹8 Lakh; full interest for technical and professional courses up to ₹4.5 Lakh.
Interest subsidy: who gets how much
| PM-USP CSIS | PM-Vidyalaxmi | |
|---|---|---|
| Family income | Up to ₹4.5 Lakh | Up to ₹8 Lakh |
| Subsidy | Full interest during the moratorium | 3% interest during the moratorium |
| On loans up to | ₹10 Lakh | ₹10 Lakh |
| Courses | Technical and professional courses at accredited institutions | All degree and diploma courses at listed institutions |
| Slots | No limit | 1,00,000 fresh students a year |
The moratorium is your course period plus one year. If your loan is larger than ₹10 Lakh, the subsidy applies only to the first ₹10 Lakh disbursed. The subsidy is paid into a PM-Vidyalaxmi digital rupee wallet and then moved to your loan account.
What the subsidy is worth on a ₹10 Lakh loan
| Course | Moratorium | 3% subsidy (up to) | Full subsidy at 9% (up to) |
|---|---|---|---|
| 2-year course (e.g. MBA, M.Tech) | 3 years | ₹90,000 | ₹2,70,000 |
| 4-year course (e.g. B.Tech) | 5 years | ₹1,50,000 | ₹4,50,000 |
Upper limits, assuming the whole amount is disbursed at the start. Real loans are paid out year by year, so the actual subsidy is lower. The full-subsidy column uses a 9% rate for illustration only.
Other benefits
- No upper loan limit: the loan can cover tuition, hostel and mess fees, a laptop and reasonable living costs.
- Long repayment: up to 15 years after the moratorium.
- Tax deduction: interest paid is deductible under Section 80E (old tax regime only).
- One application, three banks: apply through a single portal and track every step online.
Conditions to keep the benefits
- The subsidy and guarantee can be used only once — for an undergraduate, postgraduate or integrated course.
- From the second year, you need satisfactory academic performance to keep receiving the subsidy.
- You lose the benefits if you discontinue the course or are expelled for disciplinary or academic reasons.
- Students already getting another government scholarship, interest subsidy or fee reimbursement can't also claim this subsidy.
New to the scheme? Start with what PM-Vidyalaxmi is and how to apply, or see every bank and scheme for Indian institutions on our study in India education loan guide.
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