Government Skill Development Loan Scheme for Student

Government Skill Developments Loan for Student

Are you a Student? Do You wish to pursue a Skill Development Course and don't have money?

Then read the below article about the Skill Development Loan, You can get the loan from your nearest Bank Branch !

Given a huge thrust on skill development in recent years, a need has been felt to provide institutional credit to individuals for taking skill development courses aligned to National Occupations Standards and Qualification Packs and leading to a Certificate/Diploma/Degree by the Training Institutes as per National Skill Qualification Framework (NSQF).

Skill Loan Scheme aims at providing a loan facility to individuals who intend to take up skill development courses. The Scheme provides an opportunity to economically poor students who aspire to enhance their skills by undergoing skill development courses so that they can gain confidence in venturing into gainful activities.

Accordingly, “Skill Loan Scheme” has been developed to support the national initiatives for skill development & communicated by the Ministry for implementation

Student Eligibility for Skill Development Loan:

• The student should be an Indian National.

• Any individual who has secured admission in a course run by Industrial Training Institutes (ITIs), Polytechnics or in a school recognized by Central or State Education Boards or in a college affiliated to recognized University, Training partners affiliated to National Skill Development Corporation (NSDC)/Sector Skill Councils, State Skill Mission, State Skill Corporation, preferably leading to a Certificate /Diploma / Degree issued by such organization as per National Skill Qualification

• Framework (NSQF).

• The Government of India / State Governments may, from time to time, notify institutes/organizations for the purpose.

• There is no specific restriction with regard to the age of the student to be eligible for skilling loan. However, if the student is a minor, while the parent executes documents for the loan, the bank will obtain a letter of acceptance/ratification from him / her upon attaining majority.

• Minimum Qualification: As required by the enrolling institutions/organizations as per NSQF.

Course Eligibility for Skill Development Loan?

Training Institutes: Courses run by Industrial Training Institutes (ITIs), Polytechnics or in a school recognized by Central or State Education Boards or in a college affiliated to recognized University, training partners affiliated to National Skill Development Corporation (NSDC)/Sector Skill Councils, State Skill Mission, State Skill Corporation, preferably leading to a Certificate / Diploma / Degree issued by such organization as per National Skill Qualification Framework (NSQF) is eligible for

a Skilling Loan.The Government of India / State Governments may, from time to time, notify

institutes/organizations for the purpose.

Training Courses: Courses run by above mentioned Training Institutes aligned to National Skill Qualification Framework (NSQF) shall be covered by the Skill Loan.

There is no minimum course duration.

List of approved training institutes is available in the website of National Skill Development Corporation at the following link: http://www.nsdcindia.org/affilates-centers

Eligible expenses for Skill Development Loan?

Tuition / course fee. Banks shall pay such tuition / course fee directly to the Training Institute.

Any other reasonable expenditure found necessary for completion of the course including but not limited to assessment fee, Examination fee, Library charges, Laboratory fee, Caution deposit, purchase of books, equipment’s and instruments (As such courses are localized, boarding, lodging may not be necessary based on the cost of living in the particular area. However, wherever it has been found necessary, the same could be considered on merit

Quantum of Finance for Skill Development Loan?

Loans will be in the range of Rs. 5,000/- to Rs. 150,000/-. The estimated per month fees, based on sector & NSQF level, will be available with the NSDC. Skill loan could be availed by beneficiaries of other grant/reward based Government schemes for skill training to cover the cost of such skill training not covered under such grant/reward.

[ i.e If the student has availed grant /reward etc., from State Government to meet part of cost of study, in such cases, for the balance amount, student may avail loan under this scheme]

Margin amount in Skill Development Loan ?

- NIL

Interest Rate for Skill Development Loan ?

As per the Latest Rate of Interest of the Bank.

Simple interest will be charged during the initial repayment holiday period.1% interest concession is available during repayment holiday period & subsequent moratorium period, if any, if the interest is serviced as and when debited, but not later than 30 days of debit.

Concession in rate of interest at 25 bps below the applicable card rate is extended to SC/ST/Women.

Concession in rate of interest at 50 bps (inclusive of 25 bps available for SC/ST/Women) below the applicable card rate for girl students for new loans.

Interest concession of 0.50% is extended to Physically Challenged students .

Processing Charges for skill Development Loan ?

- NIL

Prepayment Charges of Skill Development Loan?

The borrower can repay the loan any time without having to pay any prepayment charges. In case a student is not able to complete the course because of accident/death/disability the bank can seek a pro-rata reimbursement of the unfinished portion of the course amount from the training institute. This will reduce the loan burden on the student.

Security for Skill Development Loan?

Co-obligation of Parent/s, Grand Parent/s ( if parents are deceased) .

No other collateral security.

Moratorium Period in Skill Development Loan?

[Initial repayment holiday]

Courses of duration up to 1 year :Course period + 6 months

Courses of duration above 1 year :Course period +12 months

Repayment Tenor of Skill Development Loan?

Loan up to Rs.50000/-:Repayment period [after moratorium] Up to 3 years

Loan above Rs.50000/-& up to Rs.1 lakh: Repayment period [after moratorium] Up to 5years

Loan above Rs. 1 lakh: Repayment period [after moratorium] Up to 7 years

Servicing of the interest debited during initial repayment holiday period is optional.However, the borrower may service such interest to lessen the burden of EMI. Otherwise, the accumulated interest will be added to the principal at the beginning of the repayment period to arrive at EMI.

Repayment : Repayment of loan in Step- Up EMI /Balloon payment:

The education loans shall be repaid in EMI to be re-set in the following order:

For the first three years from the date of commencement of repayment : EMI will be at a minimum of 50% of net income of the student borrower.

For the next three years: : EMI will be at a minimum of 60% of net income of the student borrower , prevailing as on date of commencement of fourth year.

For remaining years: EMI shall be fixed based on the balance outstanding at the beginning of seventh year so that the entire loan will be closed within the balance repayment period. Wherever, student borrower has higher repayment capacity, in such cases, higher EMI shall be fixed.

Where the student discontinues the course midway, appropriate repayment schedule will be worked out in consultation with the student/parents.

Other Guidelines in Skill Development Loan?

Loan should be availed preferably from the Bank/ Branch situated near to the place of domicile of the parents.

Reimbursement of fees only for the first year of the course is permitted