PM Vidyalaxmi

Collateral-free, guarantor-free loans for students admitted on merit to listed Quality Higher Education Institutions, with an income-linked interest subvention on top.

Ministry of Education, Government of India · India

Why this one matters

It removes the two things that stop most families borrowing: property to pledge and a relative willing to guarantee. But the loan and the subsidy are two separate things with different rules, and families routinely assume qualifying for one means getting the other.

What it covers

tuition, hostel, books, equipment. Levels funded: undergraduate, postgraduate.

The terms

• Collateral-free and guarantor-free, with no family income limit for the loan itself
• 75% credit guarantee to the bank on loans up to Rs 7.5 lakh
• 3% interest subvention during the moratorium on loans up to Rs 10 lakh, for family income up to Rs 8 lakh
• Moratorium runs for the course period plus one year
• Loan disbursed to the institution in stages, not to you

Who can apply

• You must be a citizen of India
• Family income must be under Rs 8 lakh a year
  This ceiling applies only to the 3% interest subvention. The collateral-free loan itself has no income limit at all.

Where applications fail

Most rejected applications are not ineligible students. They are eligible students who missed a step.

• The subvention is capped at one lakh students a year and allocated by a sequential method when applications exceed that. Being eligible is not the same as receiving it, and this is the single most misunderstood part of the scheme.
• Management quota and NRI quota admissions are excluded. Admission must be through merit or a recognised entrance exam.
• Your institution must be on the QHEI list. Sources report that list as 860, 1051 and 1425 institutions, so check the current list on the portal rather than assuming your college is included.
• The subvention is available once per student, covering either the undergraduate, postgraduate or integrated programme, and requires good academic standing from year two onwards.
• It is a scheme for study in India. Foreign study is not covered here, which surprises families who apply expecting it to fund an overseas degree.

If this one is not for you

Being ruled out of a scheme is not the same as having no options. Here is what is still open.

• Admitted through management or NRI quota? CGFSEL has no merit-admission condition. A collateral-free loan up to Rs 7.5 lakh is still open to you at any IBA member bank.
• Studying overseas? CGFSEL covers foreign study, and several banks run premier-institution lists with much larger collateral-free limits. Check whether your university is on your bank's list before pledging anything.
• College not on the QHEI list? The IBA model scheme still applies at every public sector bank, with no collateral required up to Rs 4 lakh.
• Family income above Rs 8 lakh? You lose the subvention, not the loan. The collateral-free structure has no income limit at all.

Record status: partially_verified. Last checked: 2026-09-13. Scheme structure confirmed against the published Department of Higher Education guidelines. The QHEI count is reported inconsistently across sources and is not confirmed here. Source: https://www.pmvidyalaxmi.co.in/

Check whether you qualify