5 things you need to know before applying for a Vidyalakshmi education loan

5 Things You Need to Know Before Applying for a Vidyalakshmi Education Loan

Are you planning to pursue higher education in India but struggling with the financial aspect? An education loan could be the solution to your problem. The Government of India’s Vidyalakshmi education loan scheme provides financial assistance to students who wish to pursue higher education domestically or abroad. In this article, we will discuss five things you need to know before applying for a Vidyalakshmi education loan.

1. Eligibility Criteria

Before applying for a Vidyalakshmi education loan, you need to check if you meet the eligibility criteria. The eligibility criteria for a Vidyalakshmi education loan include:

– The applicant must be an Indian citizen
– The applicant must have secured admission into a recognized educational institution in India or abroad
– The applicant must have a good academic record
– The co-applicant must have a steady source of income to repay the loan
– The co-applicant must have a good credit score
– The applicant must not have any default history with any bank or financial institution.

2. Loan Amount

The loan amount that you can apply for under the Vidyalakshmi education loan scheme depends on the type of course you wish to pursue, the institute you choose, and the government’s guidelines. The maximum loan limit to pursue education in India under this scheme is Rs. 10 lakhs, and for education abroad, it is Rs. 20 lakhs. However, the loan amount can vary based on the course and institute’s specifics. It is advisable to research your chosen course and university/college thoroughly before applying for a loan.

3. Interest Rate and Repayment

Vidyalakshmi education loans are provided by multiple banks and financial institutions that are registered under this scheme. The interest rates on Vidyalakshmi education loans vary from bank to bank and can range from 8% to 15%. It is crucial to research and compare the different interest rates and repayment terms offered by various banks before choosing a loan provider.

The repayment period of a Vidyalakshmi education loan can vary, ranging from 5-15 years. The repayment can be through equated monthly installments (EMIs) once the moratorium period is over, which lasts typically for 6-12 months after the course completion. Also, the banks have different policies regarding collateral requirements, repayment terms of the loan, and pre-payment penalties. Be sure to read the loan documents carefully before signing them.

4. Documents Required

To apply for a Vidyalakshmi education loan, you will need to submit various documents, including:

– Proof of identity and address
– Admission letter from the educational institution
– Fee structure and course duration
– Income proof of co-applicant
– Academic records
– Any other documents that the bank or financial institution may require.

5. Benefits of Vidyalakshmi Education Loan

The Vidyalakshmi education loan scheme offers several benefits to students, including:

– Lower interest rates compared to regular personal loans
– Provision of collateral-free loans up to a certain limit
– Easy online application process
– Quicker loan approval process
– Loan disbursal within a short period.


In conclusion, Vidyalakshmi education loans can be a great option for students seeking financial assistance for higher education. Before applying for a loan, it is essential to understand the eligibility criteria, loan amount, interest rate, and repayment terms. It is also crucial to research and compare loan providers to get the best deal. With proper planning and execution, Vidyalakshmi education loans can fulfill your dreams of pursuing higher education in India or abroad.

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