Pradhan Mantri Vidyalaxmi Scheme: Collateral-Free Education Loans for Meritorious Students, Eligibility, Benefits and How to Apply

The Pradhan Mantri Vidyalaxmi (PM-Vidyalaxmi) Scheme is a flagship initiative of the Government of India aimed at ensuring that no deserving student is denied higher education due to financial constraints. Launched by the Department of Higher Education, Ministry of Education, the scheme focuses on providing easy, transparent, and fully digital education loans to meritorious students admitted to top-quality institutions across the country.

Implemented in coordination with Canara Bank as the nodal bank, PM-Vidyalaxmi is designed to simplify access to education loans while offering interest support and government-backed credit guarantees.

What Is the PM-Vidyalaxmi Scheme?

PM-Vidyalaxmi is a collateral-free and guarantor-free education loan scheme for students who secure admission on their own merit to designated Quality Higher Educational Institutions (QHEIs) in India. The core objective is to promote inclusive education by removing financial barriers for talented students.

The entire process—from application to tracking and grievance redressal—is conducted online, making the scheme student-friendly and transparent.

Key Benefits of PM-Vidyalaxmi Scheme

The scheme offers several financial advantages that make higher education more accessible:

• No collateral or guarantor required for education loans

• Loan amount based on actual course fees and related expenses, including hostel, mess, laptop, living costs, and other academic requirements

• No upper limit on loan amount, subject to course requirements

• 75% credit guarantee by the Government of India for loans up to ₹7.5 lakh, irrespective of family income

• 3% interest subvention on loans up to ₹10 lakh for students from families with annual income up to ₹8 lakh during the moratorium period

• Existing full interest subvention continues for eligible students under PM-USP CSIS

• Interest rate capped at EBLR + 0.5% of the respective bank

• Additional 1% interest concession if interest is serviced during the study and moratorium period

• Repayment period of up to 15 years, excluding the moratorium period

A unique feature of the scheme is that the interest subvention amount is credited to the PM-Vidyalaxmi Digital Rupee App (CBDC Wallet). Once redeemed by the student, the amount is transferred directly to the loan account.

Eligibility Criteria for Students

To qualify for PM-Vidyalaxmi, applicants must meet the following conditions:

• Must be an Indian citizen

• Must secure merit-based admission to one of the 860 notified QHEIs in India

• Admission should not be through management quota or similar routes

• Annual family income should be up to ₹8 lakh to avail the 3% interest subvention

• Should not be availing any other Central or State Government scholarship, interest subvention, or fee reimbursement

• Must not discontinue the course or be expelled for academic or disciplinary reasons

• Satisfactory academic performance is mandatory from the second year onwards

• Interest subvention and credit guarantee benefits can be availed only once, for either UG, PG, or an integrated course

Eligible Institutions (QHEIs)

The scheme covers only high-quality institutions, including:

• Top 100 institutions in overall or category/domain-specific rankings under the latest NIRF

• Top 200 State/UT government-run institutions listed in NIRF

• All remaining institutions under the Government of India

Foreign universities, their Indian campuses, and overseas campuses of Indian institutions are not covered.

How to Apply for PM-Vidyalaxmi Scheme

Registration Process

1. Visit the official PM-Vidyalaxmi portal

2. Click on Student Login and select Create an Account

3. Register using Aadhaar authentication

4. Verify mobile number and email ID via OTP

5. Create a secure password and complete registration

Loan Application Steps

1. Log in using registered credentials

2. Select Apply for Education Loan

3. Fill in all mandatory details and upload required documents

4. Choose preferred bank and branch

5. Review details and submit the application

6. Receive confirmation via SMS, email, or WhatsApp

Students can also track their loan application status online and download the submitted application form.

Applying for Interest Subvention

After loan sanction and disbursement:

• Log in to the portal

• Select Apply for Interest Subvention

• Upload income certificate or institutional declaration

• Submit the claim and receive confirmation

Documents Required

• Aadhaar Card

• PAN Card

• Address Proof

• Previous qualifying exam mark sheets

• Entrance exam results

• Admission offer letter with fee structure

• Income certificate issued by competent authority

Why PM-Vidyalaxmi Matters

With rising education costs, PM-Vidyalaxmi plays a crucial role in bridging the gap between talent and opportunity. By offering affordable credit, interest relief, and government-backed security, the scheme empowers students to focus on learning rather than financial stress.

The Pradhan Mantri Vidyalaxmi Scheme stands out as a major step toward inclusive, merit-based higher education, ensuring that financial limitations do not stand in the way of India’s youth achieving their academic and career aspirations.