The Skill Loan Scheme was launched by the Government of India in July 2015 to provide easy and affordable institutional credit to individuals pursuing skill development courses. This scheme is designed to support students undergoing training aligned with the National Skill Qualification Framework (NSQF) in recognized institutions like ITIs, Polytechnics, Colleges, Training Centers, and NSDC-affiliated partners.
The main objective is to ensure that youth have access to financial support for acquiring employable skills without facing the burden of collateral. Loans are available from ₹5,000 to ₹1.5 lakh with flexible repayment options, making skilling and vocational training more accessible to all sections of society.
Table of Contents
Skill Loan Scheme 2025 : Important Highlights
- Launch Year: July 2015
- Implemented By: Ministry of Skill Development & Entrepreneurship (MSDE)
- Loan Range: ₹5,000 – ₹1,50,000
- Eligibility: Students admitted to NSQF-aligned courses in recognized training institutes
- Interest Rate: MCLR/Base Rate + up to 1.5%
- Repayment Period: 3 to 7 years (based on loan amount)
- Collateral: Not required
- Credit Guarantee: Provided under Credit Guarantee Fund for Skill Development (CGFSSD)
Eligibility Criteria
Any individual/student who meets the following conditions can apply:
- Must have secured admission in:
- Industrial Training Institutes (ITIs)
- Polytechnics
- Schools recognized by Central or State Boards
- Colleges affiliated with recognized universities
- Training partners affiliated with NSDC / Sector Skill Councils / State Skill Missions / State Skill Corporations
- Courses should be aligned to the National Skill Qualification Framework (NSQF).
- No age bar has been specifically mentioned, but the applicant must be an admitted student.
Loan Amount & Repayment Period
| Loan Amount | Repayment Period |
|---|---|
| Upto ₹50,000 | Upto 3 years |
| ₹50,000 – ₹1,00,000 | Upto 5 years |
| Above ₹1,00,000 upto ₹1,50,000 | Upto 7 years |
Key Features & Benefits
- Quantum of Finance: ₹5,000 – ₹1,50,000
- Coverage Includes:
- Tuition/Training fees (paid directly to the institute)
- Examination fees, assessment fees, and certification fees
- Cost of study materials, books, equipment, etc.
- No Collateral Required: Students do not need to provide any security or collateral.
- Interest Rate: MCLR/Base Rate + up to 1.5% as decided by the bank.
- Moratorium Period: Equivalent to the duration of the course. Repayment starts after completion of training.
- Credit Guarantee: Loans are covered under CGFSSD administered by NCGTC, which covers up to 75% of the outstanding loan amount (including interest).
- Wider Coverage: Scheme applicable to all member banks of IBA and other notified banks by RBI.
Application Process
Interested students can apply through the official Vidya Kaushal Portal or via participating banks.
Step-by-Step Guide
- Online Registration
- Visit the Vidya Kaushal Portal and complete registration.
- Course Selection
- Choose preferred sector / role / training center.
- Counseling & Loan Request
- Visit the training center for counseling.
- Raise a loan request through the center, if required.
- Loan Offer & Acceptance
- Compare and evaluate loan offers from partner banks.
- Accept or reject based on preference.
- Loan Disbursement
- Once approved, the loan is disbursed directly to the institute/center.
Documents Required
Applicants need to submit the following documents (self/guardian wherever applicable):
- Proof of Identity (Aadhaar Card, Passport, Voter ID, PAN Card, etc.)
- Proof of Address (Electricity Bill, Ration Card, Aadhaar, etc.)
- Proof of Income (Salary slip/Income certificate of self or guardian, if available)
- Admission/Enrollment Letter from recognized training institute
- Passport size photographs
Repayment Terms
- Repayment starts after the course completion and moratorium period.
- Loan tenure varies from 3 to 7 years depending on the amount borrowed.
- Easy EMI options through ECS/Standing Instructions available.
Frequently Asked Questions (FAQs)
Q1. What is the maximum loan amount available under the Skill Loan Scheme?
Ans: The maximum loan amount available is ₹1.5 lakh.
Q2. What is MCLR under rate of interest?
Ans: MCLR (Marginal Cost of Funds based Lending Rate) is the minimum interest rate below which banks are not permitted to lend. Under this scheme, the loan interest rate is MCLR + up to 1.5%.
Q3. What is the moratorium period?
Ans: The moratorium period is the duration of the course. Repayment begins after course completion.
Q4. Is collateral required for the loan?
Ans: No. Students are not required to provide any collateral/security for availing the loan.
Q5. Who provides credit guarantee under this scheme?
Ans: Credit Guarantee is provided by the National Credit Guarantee Trust Company (NCGTC) under the Credit Guarantee Fund for Skill Development (CGFSSD).
Q6. How is the loan amount disbursed?
Ans: The loan is disbursed directly to the training institute towards tuition, examination, and other approved expenses.
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