PM Vidyalaxmi is a central government scheme that gives collateral-free and guarantor-free education loans to students admitted to 1,425 listed higher education institutions. There is no upper loan limit for eligible courses. Students with family income up to Rs 8 lakh can also get 3% interest subvention on loans up to Rs 10 lakh.
The Union Cabinet approved the scheme in November 2024 with an outlay of Rs 3,600 crore for 2024-25 to 2030-31. In its second full year, it has become one of the main routes for middle-class families to fund college fees without pledging property. Here is how it works, who qualifies and how to apply.
PM Vidyalaxmi scheme at a glance
| Feature | Details |
|---|---|
| Loan type | Collateral-free, guarantor-free education loan |
| Who can apply | Students admitted on merit to a Quality Higher Educational Institution (QHEI) |
| Number of QHEIs | 1,425 (as per PIB, July 2026) |
| Loan limit | No cap for eligible programmes; covers tuition and course costs |
| Credit guarantee | 75% government guarantee on loans up to Rs 7.5 lakh |
| Interest rate ceiling | External Benchmark Lending Rate (EBLR) plus 0.5% |
| Interest subvention | 3% during moratorium on loans up to Rs 10 lakh, family income up to Rs 8 lakh |
| Repayment period | Up to 15 years after course period and one-year moratorium |
| Portal | PM Vidyalaxmi portal (pmvidyalaxmi.co.in) |
Which colleges are covered
The scheme does not apply to every college. It covers what the government calls Quality Higher Educational Institutions. According to the Cabinet decision and the Ministry of Education, these include:
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- Government and private institutions in the top 100 of the NIRF rankings, in the overall, category-specific or domain-specific lists
- State government institutions ranked in the top 200 by NIRF
- All central government higher education institutions, such as IITs, IIMs, NITs and central universities
The list is updated every year based on the latest NIRF rankings. When the scheme started, 860 institutions were covered. A PIB note in July 2026 put the number at 1,425. Students should check whether their specific college is on the current list on the portal before applying.
One important exclusion: admissions under management quota or NRI quota are not eligible. The scheme is meant for students who get admission on merit.
How the loan and subsidy work
Loan without collateral
The biggest benefit is that banks do not ask for property, fixed deposits or a guarantor. To make banks comfortable lending without security, the government gives a 75% credit guarantee on loans up to Rs 7.5 lakh. The loan can cover full tuition fees and other costs related to the course.
Capped interest rate
As per the PIB note reported in July 2026, banks can charge a maximum of their External Benchmark Lending Rate plus 0.5%. Since each bank’s EBLR is different, the actual rate will vary. Compare the rate offered by two or three banks on the portal before choosing.
Interest subvention for lower and middle income families
Students whose annual family income is up to Rs 8 lakh, and who do not get any other government scholarship or interest subvention, can get 3% interest subvention during the moratorium period on loans up to Rs 10 lakh. The moratorium covers the course period plus one year.
Students from families with income up to Rs 4.5 lakh already get full interest subvention during the moratorium under a separate scheme, PM-USP Central Sector Interest Subsidy (CSIS). The subvention benefit is available only once, for one undergraduate, postgraduate or integrated programme.
How many students have used it
According to figures from a PIB note reported on 30 July 2026, the PM Vidyalaxmi portal received 6,45,514 education loan applications across all schemes in 2025-26. Of these, 1,10,667 were under PM Vidyalaxmi itself. Banks sanctioned 70,852 loans and disbursed 67,728 under the scheme in that year.
The government expects about 7 lakh fresh students to benefit from the interest subvention over the scheme period, with around 1 lakh students a year. Preference goes to students in government institutions and those in technical or professional courses.
How to apply on the PM Vidyalaxmi portal
The Department of Higher Education runs a single portal where students can apply for education loans and interest subvention. The general process is:
- Register on the PM Vidyalaxmi portal with your basic details and mobile number.
- Fill the common education loan application form with academic, admission and family details.
- Choose banks and submit the application. Scheduled commercial banks, regional rural banks and cooperative banks lend under the scheme.
- Upload documents the bank asks for. Banks usually ask for the admission letter, fee structure, identity and address proof, mark sheets and income proof.
- Track your application on the portal. You can also raise grievances there if there is a delay.
- Claim subvention through the portal if you qualify. Payments are made through e-vouchers and a CBDC wallet linked to the scheme.
Apply soon after you get your admission letter. Bank processing takes time, and fee deadlines at most institutes do not wait.
Points to check before you borrow
- Confirm your college is a QHEI for the current year, since the list changes with NIRF rankings.
- Borrow only what you need. No cap does not mean you should take the maximum. Interest builds during the course period.
- Keep income documents ready if you want the 3% subvention, as income will be verified.
- Do not stack benefits. If you already get a government scholarship or another subvention, you may not qualify for the 3% benefit.
- Read the repayment schedule. Know the EMI amount and start date after the moratorium ends.
For more on budgeting, loans and savings, see the Finance section. Students choosing courses and colleges can find admission guides in our Education section.
Frequently asked questions
Is there a maximum loan amount under PM Vidyalaxmi?
No. As per the PIB note, there is no upper cap for eligible programmes. The 75% government guarantee, however, applies to loans up to Rs 7.5 lakh.
Who gets the 3% interest subvention?
Students with annual family income up to Rs 8 lakh who do not receive other government scholarships or subvention, on loans up to Rs 10 lakh, during the moratorium period.
Can management quota students apply?
No. Admissions under management quota and NRI quota are excluded from the scheme.
Do I need a guarantor or collateral?
No. Loans under PM Vidyalaxmi are collateral-free and guarantor-free for students admitted to eligible institutions.
Sources: PM Vidyalaxmi portal, Ministry of Education, Cabinet approval note, Drishti IAS summary of the July 2026 PIB note.
