The trend of vocational education is increasing in India and so is the demand of the nation. A government report showed that India needs 10-15 million skilled workers every year to support its development processes. So, in order to ensure that no one is discouraged from pursuing vocational education, the government along with the Indian Bank’s Association (IBA) has introduced many education loan schemes.
Under this initiative, many private and public sector banks are offering attractive education loan schemes to financially support students willing to pursue such courses. These include courses from various ITIs, ITCs, and Polytechnics. PNB offers Kaamgar Loan Scheme while many private banks like Canara Bank have their own Vocational Education and Training Loan Scheme.
These schemes are an extension to the already existing Model Education Loan Scheme for Higher Studies in India and Abroad. The original scheme launched in 2001 by the IBA failed to incorporate the vocational courses. However, as more and more students started inclining towards them, IBA introduced the Model Education Loan Scheme for Vocational Courses a few years back.
Vocational Education is meant to make students equipped with various technical skills in their respective fields. The courses prepare them as skilled labours and give them opportunities to impart skills and abilities in their work.
Traditionally, most of the vocational courses were conducted in classrooms and job sites, but lately, many online learning platforms have also emerged.
Some of the other popular banks offering education loan schemes for vocational courses are:
|State Bank of India (SBI)||Vocational Education and Training Loan Scheme|
|Allahabad Bank||Allahabad Vocational Course Loan Scheme|
|Syndicate Bank||Synd Vocational Course Loan Scheme|
|Federal Bank||Federal Career Solutions Loan Scheme|
|Tamilnad Mercantile Bank||Skill Development Loan Scheme|
This scheme considers vocational and skill-oriented courses offered by:
Industrial Training Institutes (ITIs)
Schools recognized by Central and State education boards.
Training Partners affiliated to National Skill Development Corporation (NSDC)
State skill missions and corporations
The student is allowed to pursue a course of duration ranging from 2 months-3 years. Apart from the courses offered by the above institutes, the State Level Bankers Committee can add any other course if it has good employability.
As per the regulations, the following are the expense slabs made by the association:
|Course Duration||Loan Limit|
|Up to 3 months||INR 10,000|
|3-6 months||INR 25,000|
|Up to 1 year||INR 50,000|
|Above 1 year||INR 1,50,000|
However, the loans do not have a strict upper cap. If the banks want to, they can give education loans up to INR 2 Lakh.
These vocational education loan schemes are offered at very low-interest rates and without any margin requirement or processing fee. Moreover, there is not even any age limit for the applicants. If the student is a minor, the parents can execute the documents for them.
The best part is that there is no collateral or security needed for education loan under these schemes. Still, if they want, banks can apply to the National Credit Guarantee Trust Company Ltd. (NCGTC) for credit guarantee against defaults.
These schemes are giving a boost to the vocational education in India and serving as a wave for skill development in India. Also including optional insurance for the applicant students, vocational course education loans are a great relief for those who don’t want to pursue full degree courses.