The Central Government’s Skill Loan Scheme is for young people who want to take skill training but cannot arrange money for the fees. It was launched by the Ministry of Skill Development and Entrepreneurship (MSDE) in July 2015. Under this scheme, banks give a collateral-free loan — that is, no property has to be pledged for the loan. In July 2024, the scheme was revised in a big way: the maximum loan limit was raised from ₹1.5 lakh to ₹7.5 lakh.
How much loan is given
Under this scheme, a loan of ₹5,000 to ₹7.5 lakh is given. The loan covers the tuition or course fee — the bank pays this fee directly to the training institute. In addition, assessment fees, examination charges and study material costs can also be included in the loan. No collateral or guarantor has to be given for the loan; all skill loans are covered under the Credit Guarantee Fund for Skill Development (CGFSSD), run by the National Credit Guarantee Trustee Company (NCGTC), which guarantees up to 75% of the outstanding amount.
Interest and repayment
The interest rate is the bank’s RLLR or MCLR plus an add-on of up to 1.5% — the exact rate depends on the lending bank. The repayment period depends on the loan amount: up to 3 years for loans up to ₹50,000, up to 5 years for loans between ₹50,000 and ₹1 lakh, and up to 7 years for loans above ₹1 lakh. Servicing the interest during the study period and the moratorium period is optional.
Which courses and institutions are eligible
The loan is given for courses aligned with the National Skills Qualifications Framework (NSQF) or run by training entities listed on the Skill India Digital Hub (SIDH). Eligible institutions are — Industrial Training Institutes (ITIs), Polytechnics, schools recognised by Central or State Education Boards, colleges affiliated to a recognised university, and training partners affiliated to the NSDC, Sector Skill Councils, State Skill Missions or State Skill Corporations. There is no minimum course duration.
How to apply
Applications can be made at any participating bank branch — the bank completes the loan process. Applications can also be made through the Skill India Digital Hub (skillindiadigital.gov.in) and the Vidya Kaushal portal. The applicant has to submit admission proof, course details, identity and address proof, and bank account details. Do not pay anyone for applying — this facility is free.
Frequently Asked Questions
Q1: How much loan does the Skill Loan Scheme give?
A: ₹5,000 to ₹7.5 lakh — the limit was raised from ₹1.5 lakh to ₹7.5 lakh in July 2024.
Q2: Does the loan need collateral?
A: No — it is a fully collateral-free loan; all loans are covered under the Credit Guarantee Fund (CGFSSD).
Q3: For which courses is the loan given?
A: For NSQF-aligned courses or courses listed on the Skill India Digital Hub — including ITI, Polytechnic and NSDC partner courses.
Q4: Where do I apply?
A: At any participating bank branch or on the Skill India Digital Hub (skillindiadigital.gov.in).
Useful links
- Skill India Digital Hub: https://www.skillindiadigital.gov.in/
- Skill Loan Scheme on MyScheme: https://www.myscheme.gov.in/schemes/sl
- Next Action: see all 726 Central Government schemes — /english/kendra-sarkar-ki-yojnayen-2/
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