AI SummarySkill Loan Scheme is open right now for students and working professionals who want to build job-ready skills. The government raised the loan limit to ₹7.5 lakh in 2024, so people can now pay for longer and costlier training courses without worrying about money.
Ministry of Skill Development and Entrepreneurship runs this scheme. It gives collateral-free credit for courses that match the National Skill Qualification Framework and for many other skill programmes approved by the government.
Skill Loan Scheme 2026
Skill Loan Scheme first started in 2015. In July 2024, the government revamped it as the Model Skill Loan Scheme under the Union Budget 2024-25. The main change was the loan cap, which moved up from ₹1.5 lakh to ₹7.5 lakh. This step will help about 25,000 students every year who could not afford high-end skill courses earlier.
The older version saw low use because the ticket size was small. As course fees went up over the years, many good programmes stayed out of reach. The revamped scheme fixes this by giving a much larger loan and by bringing more lenders into the fold.
You do not need to pledge any collateral or gold to get this loan. To protect the lender, the Credit Guarantee Fund for Skill Development gives a cover of 70% to 75% of the amount that goes into default. The fund is run by the National Credit Guarantee Trustee Company.
At first, only banks under the Indian Banks Association could give these loans. Now the lender list also includes NBFCs, small finance banks, NBFC-MFIs and regional rural banks. This wider network makes it easier to apply from a town or village near you.
Key Information
| Detail | Information |
|---|---|
| Scheme Name | Skill Loan Scheme (revamped as Model Skill Loan Scheme) |
| Launch Date | 15 July 2015 (revamped July 2024) |
| Launched By | Ministry of Skill Development and Entrepreneurship |
| Loan Amount | ₹5,000 to ₹7,50,000 |
| Interest Rate | Up to 1.5% over EBLR for banks; up to 21% per year for NBFCs |
| Collateral | Not required |
| Guarantee Cover | 70% to 75% of the default amount |
| Application Mode | Online through Vidya Kaushal portal or at a bank or NBFC |
| Official Website | msde.gov.in |
Benefits
You can get institutional credit from ₹5,000 up to ₹7,50,000 to pay for course fees and related costs like study material, exam fees and assessment charges. The loan is collateral-free, and lenders do not charge any processing fee.
Interest for bank loans is kept at the external benchmark lending rate plus a small add-on of up to 1.5%. For NBFCs the rate can go up to 21% per year, so it is worth comparing before you sign. You also get a moratorium equal to your course duration, which means no EMI during study time.
| Loan Amount | Repayment Period |
| Up to ₹50,000 | Up to 3 years |
| ₹50,000 to ₹1 lakh | Up to 5 years |
| Above ₹1 lakh | Up to 7 years |
Eligibility
Any Indian national who has secured admission in a skill course can apply. The course should be run by an Industrial Training Institute, a polytechnic, a school recognised by a Central or State education board, or a college tied to a recognised university.
You can also apply if you join a training partner linked with the National Skill Development Corporation, a Sector Skill Council, a State Skill Mission or the Skill India Digital Hub. Courses that match the National Skill Qualification Framework are covered, along with many non-NSQF courses listed on the government platform. If you plan to study under Pradhan Mantri Kaushal Vikas Yojana, this loan can help pay the course fee.
Application Process
The easiest way is to apply through the Vidya Kaushal portal run by NSDC. You can also walk into a registered bank or NBFC and tell them you want a Skill Loan under the Credit Guarantee Fund for Skill Development scheme. The steps below cover the online route.
STEP 1 - Go to the official Vidya Kaushal portal and click on the register option to create your student account.
STEP 2 - Keep your identity proof, address proof and income proof ready, then fill in your basic details on the form.
STEP 3 - Pick your sector, job role and training centre from the list shown on the portal.
STEP 4 - Visit the chosen training centre for counselling so the team can check your course fit.
STEP 5 - Raise your loan request through the centre after counselling is done.
STEP 6 - Review the loan offer sent by the bank and accept the terms that suit you.
STEP 7 - Get the money disbursed straight to the training centre account once the loan is approved.
Documents
Keep these papers ready before you start, as the lender will ask for them during checking.
- Valid proof of identity such as Aadhaar or PAN.
- Valid proof of address like a ration card or utility bill.
- Proof of income of yours or your parent or guardian.
References
FAQ's
What is the maximum loan amount available under this scheme?
You can get a loan of up to ₹7,50,000 for your skill development course. The floor is ₹5,000, and the exact amount depends on the course fee and the lender's check.
What does the interest rate look like for banks and NBFCs?
For bank loans, the rate is the external benchmark lending rate plus a small add-on of up to 1.5%. For NBFCs, the rate can go up to 21% per year. Compare both before you choose.
Is any collateral or guarantor needed for this loan?
No collateral is needed. Your parent or guardian acts as a co-borrower. The government stands behind the loan through the Credit Guarantee Fund for Skill Development, which covers 70% to 75% of the default amount.
What is the moratorium period for this loan?
The moratorium matches your course duration. During this time you do not pay any EMI. Repayment starts after the course ends, and the full period can go up to 7 years based on the loan size.
Which lenders can give this loan now?
Member banks of the Indian Banks Association, NBFCs, small finance banks, NBFC-MFIs and regional rural banks can all give this loan after the 2024 revamp.