Friends In this post, we will talk about education loan subsidies for the economically weaker section. The subsidy is given by the government at the interest rate. The interest rate accumulates during the moratorium period that is paid by the government.
So in this post, we will understand this whole process how it works, and how you can claim a subsidy
So you must read this post till the end Let’s go straight. First of all, let us understand the education loan subsidy.
What is this scheme?
The Central Government has approved this scheme, the Ministry of Human Development launched this scheme in 2009-10 it was launched in the academic year 2009-10.
Its full name is Central scheme to provide interest subsidy and it is an education loan scheme of Indian Bank association Interest subsidy is given within this scheme in the moratorium period.
What is the moratorium period in education loan?
Whenever you take an education loan it includes a course period. The period for which your degree course is running in addition of some relaxation is provided to you until you get a job.
So suppose you got a job after 3 months so after 3 months, you get an extra 6 months. After that, you can start repayment of your loan, but this maximum period can be extended up to 1 year.
So whatever is your course duration?
The moratorium period is up to 1 year after that. So after 1 year or 6 months after the job whichever is earlier is the moratorium period.
What happens in the moratorium period?
You do not have to repay the interest plus principal for the moratorium period. No repayment. I write here clearly. There is no repayment of any kind during the moratorium period.
You have to repay the loan after the moratorium period. You are taking an education loan during the course period because your repayment capacity is not that good and when you get the job you will be able to repay the loan easily hence the moratorium period is given as a relaxation period.
What is the eligibility for an education loan subsidy? Who can avail of this?
So only economically weaker sections people can avail themselves it. Whose parental income is less than 4.5 lakh per annum?
Your total family income from all sources. After adding all, if its total amount is below 4.5 lakhs per annum then only you are eligible. And it is available only for technical and professional courses in India. This is not applicable if you go outside India to study.
A student can avail of interest subsidy only once you can avail of this subsidy only once either when you graduate When you pursue your undergraduate degree. Or when you do a postgraduate degree or diploma. So you can claim a subsidy in either of the two.
Suppose if you take education for both so you will get a subsidy for either of the two. Along with this, there are many institutes for integrated courses.
In which Bachelors and Master’s courses are conducted by combining so you can definitely get a subsidy for that for the entire course.
And such students who leave their course in the middle or are fired for disciplinary or academic grounds so they too cannot claim this interest subsidy.
So we just now discussed eligibility.
How the education loan interest subsidy is processed?
Canara Bank has been made a nodal bank. Canara Bank has been appointed as the Central nodal agency by the HR Ministry. And Canara Bank does the complete process of subsidy. You can take a loan from any bank. Whichever bank it is, it will send a request for the subsidy to Canara Bank. And Canara Bank releases the subsidy amount to them. And Canara Bank gets this amount directly from the Ministry of Human resource development
So you don’t need to go to Canara Bank you can apply for an education loan at any bank as a student. And you also have to apply for a subsidy in your bank. You don’t need to go to Canara Bank
I have given you this extra information. I also want to clarify one thing. Many people get confused that they will have to claim the subsidy separately and they will have to go to Canara Bank.
You do not have to go anywhere from whichever bank you have taken an education loan to claim subsidy, you have to fill in only one form there. And in a way, the loan agreement is signed through which your subsidy process is done.
Now if we talk about the indicative list for which courses do you get this subsidy?
I have taken out the list of an Indian Bank There they have given an indicative list. so you can see.
Undergraduate and postgraduate in engineering.
Courses of engineering and architecture
An indicative list of medical and paramedical courses is given Like, MBBS, MD, nursing degree
Pharmacy, physiotherapy, MOI, Siddha, Ayurveda, Homoeopathy, naturopathy All these medicine degrees.
Agriculture, veterinary law, dental, management, computer. All these technical and professional courses. For these, you get the subsidiary of all interest loans. There are also many postgraduate diplomas
For example, a diploma is also available in IIMS. So in such an institute you also get a subsidy on interest loans.
Then which course is not eligible to let’s see that too
If you do any such course which you do before passing 12th then you are not eligible for that. If you go abroad to study in any foreign country and take an education loan for that, you will not get an interest subsidy on that.
Then for non-professional and non-technical courses for undergraduates and postgraduate such as BA, MA, BSC, MSC in Arts Commerce, sociology, music all the bachelor’s and master’s courses in music. Or diploma courses, teacher training courses, skill development, or vocational training courses
You will not get an interest subsidy in these courses. For the technical or professional course, you can get an interest subsidy Now let’s talk about what kind of income proof you will have to give.
To get into EWS You have to give an income certificate from the designated authority where do you get it
A list of this has also been prepared; you will find it on the website of Canara Bank.
Here the authority of every state has been given from where you will get this income certificate. You have to give this certificate to prove the economically weaker section
Apart from this, you can also get additional interest concessions of 1%. Additional interest concession is applicable when the Government of India starts paying your interest subsidy amount within the moratorium period on a half-yearly or yearly basis. Whichever bank has taken your education loan. If they start getting a subsidy amount during the moratorium period. So this additional interest concession of 1% is applicable.
If you also take a normal education loan. So the bank gives you a concession. If you start your repayment within the moratorium period. When you will claim for interest subsidy in any bank
You have to sign an agreement. This agreement is signed between the student, student’s parent or guardian, and the bank branch in which you have claimed the loan.
And based on this agreement any bank branch applies to Canara Bank.
What do you require?
In whatever bank you will apply for an education loan. So you only need two things first income certificate and second, you have to sign an agreement for interest subsidy.
That’s all you don’t need to go anywhere else. Neither you don’t need to go to Canara Bank nor do you need to go to any ministry. So I hope you have got the idea of how to claim education loan subsidies.
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