The PM Vidyalaxmi scheme gives collateral-free and guarantor-free education loans to students who win admission on merit to a notified quality higher education institution (QHEI). Loans up to Rs 7.5 lakh carry a 75 percent government credit guarantee for the bank, and students from families earning up to Rs 8 lakh can get interest support. The Union Cabinet approved it on 6 November 2024 with a budget of Rs 3,600 crore for 2024-25 to 2030-31.
Key takeaways
- PM Vidyalaxmi gives collateral-free and guarantor-free education loans for admission to notified quality higher education institutions.
- Loans up to Rs 7.5 lakh carry a 75 percent government credit guarantee for the bank.
- Students from families earning up to Rs 8 lakh can get interest support during the moratorium, which is the course period plus one year.
- The Union Cabinet approved the scheme on 6 November 2024 with a budget of Rs 3,600 crore.
PM Vidyalaxmi Scheme: benefits at a glance
| Family income | Technical or professional courses | Other courses |
|---|---|---|
| Up to Rs 4.5 lakh | Full interest subvention under the existing central scheme (PM-USP CSIS) | 3 percent interest subvention under PM-Vidyalaxmi |
| Rs 4.5 to 8 lakh | 3 percent interest subvention | 3 percent interest subvention |
| Any income | 75 percent credit guarantee on loans up to Rs 7.5 lakh | |
The interest support applies during the moratorium, which is the course period plus one year. Reports describe the 3 percent support as applying to loans up to Rs 10 lakh. Confirm the exact limits in the scheme guidelines before you apply.
Who can use it
- Students admitted on their own merit to an institution on the notified QHEI list. The list started with 860 institutions and had grown to 1,425 by mid-2026, so check the current list on the portal.
- Students whose loan is not under the management quota; management-quota loans are not eligible.
- Students not already getting interest subvention or a fee reimbursement from another scheme for the same purpose.
The institutions are chosen using NIRF rankings; see our guide to the NIRF ranking for how the list is built.
Other features that matter
- The loan covers the full tuition fee and course-related expenses as per the scheme.
- Repayment can run up to 15 years after the moratorium, in line with the standard Indian Banks’ Association education loan model.
- Banks can charge interest up to the external benchmark rate plus 0.5 percent, as described by the scheme summary.
- The credit guarantee and interest benefit can be used once for an undergraduate, postgraduate or integrated course.
- From the second year you need satisfactory academic progress to keep receiving interest benefits.
How to apply
- Check that your institution and course appear on the QHEI list.
- Register on the PM-Vidyalaxmi portal and fill the common education loan application.
- Choose the banks you want to apply to; the portal sends your application to them.
- Upload admission proof, fee structure, identity and income documents.
- The bank decides on sanction. The scheme helpline is 1800 1031 (toll free).
Questions to ask the bank
A credit guarantee protects the bank, not you. If you stop paying, the loan still goes against your record. Before you sign, ask the branch which fees the sanctioned amount covers, whether it is released to the college in stages, what the interest rate is and how it moves, what happens to the interest during the moratorium if you are not in an income band for full subvention, and whether there are processing charges. Ask for the repayment schedule in writing. Compare at least two banks on the portal instead of accepting the first sanction.
PM Vidyalaxmi Scheme: plan your repayment
A loan with no collateral still has to be repaid. Estimate the monthly instalment with our education loan EMI calculator before you accept an amount, and compare it with scholarships such as the post matric scholarship for SC students, which you may be able to use for part of the cost if you qualify and no overlapping benefit applies.
Rules, dates and amounts for PM Vidyalaxmi Scheme can change, so confirm the latest official notice before you act.
Frequently asked questions
What is the PM Vidyalaxmi scheme?
It is a central scheme offering collateral-free and guarantor-free education loans, with a credit guarantee and interest support, to students admitted to notified quality institutions.
How much is the credit guarantee?
The government provides a 75 percent credit guarantee on loans up to Rs 7.5 lakh, irrespective of family income.
Who gets full interest subvention?
Students with family income up to Rs 4.5 lakh in technical or professional courses get full interest subvention under the existing central scheme. Others get 3 percent support in the income bands the scheme sets.
Is the management quota covered?
No. Loans for management-quota admissions are not eligible.
Where do I apply?
On the PM-Vidyalaxmi portal, which sends your application to the banks you select.