What is the Credit Guarantee Fund Scheme for Education Loans?

The Credit Guarantee Fund Scheme for Education Loans was started by the government to offer unsecured education loans to students for higher education in India or abroad. Under CGFSEL, students can get up to 7.5 lacs of unsecured education loans.

Member lending institutions that consist of private and public banks provide CGFSEL in line with the instructions provided by the government under the IBA education loan model.

Public and private banks offer unsecured education loans of up to 7.5 lacs under CGFSEL to study abroad. Learn about all the other education loan parameters in the below table.

Eligible Courses for Abroad under CGFSEL

• Graduation: Technical and Professional job-oriented courses offered by reputed foreign universities.
• Post-graduation: MS, MBA, MCA, etc.
• Courses offered by CIMA-London, CPA in the USA, etc.
• Diploma/Degree courses such as pilot training, aeronautical, shipping, etc recognized by competent regulatory bodies

Students can attain an education loan of up to 7.5 lacs without pledging any security to study in India.

Eligible Courses to study in India under CGFSEL

• Graduate/Post-graduate degree and PG diploma courses conducted by recognized universities
• Courses such as CA, ICWA, CFA, etc
• Courses offered by IIMs, IITs, IISC, and XLRI. NIFT, NID, etc
• Degree/Diploma courses such as pilot training, aeronautical, shipping, nursing, or any other discipline conducted by institutes that are approved by a regulatory body
• Courses offered in India by reputed foreign universities

Students planning for CGFSEL education loans must meet the following eligibility criteria.

• The student applying for the scheme must be an Indian national
• The student must have secured admission into a higher institute in India or abroad through merit or by writing an entrance examination.

Students will have to arrange a certain percentage of their expenses by themselves from the loan amount called loan margin. The loan margin for loans of up to 4 lacs under CGFSEL is NIL. Students will have a loan margin of 5% to study in India and 15% to study abroad for loans above 4 lacs.

CGFSEL stresses interest rates charged to be a maximum of up to 2% above the base rate. The member lending institution should abide by this condition to avail of education loans under the CGFSEL scheme.

The government of India has launched different education loan interest subsidy schemes for students who are dreaming of quality higher education. Students applying for the CGFSEL scheme should definitely be aware of these schemes.

Dr. Ambedkar Central sector scheme

The scheme is for students from OBC and EBC categories who have availed an education loan for their studies abroad. The Dr. Ambedkar central sector scheme provides interest subsidies for the interest accumulated during the moratorium period.

Eligibility:

• The family income of the OBC students applying for the scheme should be less than 8 lacs per annum.
• The family income of the EBC students applying for the scheme should be less than 5 lacs per annum.

Central Scheme for Interest Subsidy for Economically Weaker Sections

CSIS provides an interest subsidy for the moratorium period. Students belonging to EWS categories, who have taken an education loan to pursue higher education in India are eligible for CSIS. The annual income of the student’s family applying for the scheme should be less than 4.5 lacs per annum.

Reach out to WeMakeScholars by filling out a common application form on the website. Keep the following documents ready to process your education loan further.

Documents of the applicant:

• PAN card, Aadhar card, as proof of your identity
• Latest address proof in the form of a Voter ID card, Aadhar card, or electricity bill

Co- applicant's documents:

• 6 month’s payslip if salaried
• Business transactions of 1 year if self-employed

Applicant’s academic documents:

• 10th, 12th, and degree mark sheets
• Admit card reflecting the course duration
• Fee structure
• Language proficiency tests and other test scorecards
• Ranking of the university

Financial co-applicant documents:

• If salaried
  • Pay slip for the last 3 months
  • Form 16 of last 2 years
  • ID card of the employer
  • Last 2 year’s ITR
• If self-employed
  • Last 3 years ITR
  • A balance sheet of the last 3 years
  • Address proof of the business

Other documents

• A letter that states that the leftover expenses will be borne by your financial co-applicant
• Notarised joint affidavit of the student with the co-applicant, the format of which will be provided by the WeMakeScholars financial officer.

Additional documents

• Receipts of payments made to the university, if any.
• Statement of any pending loans
• If you have had any gap in your studies, explain that in a 100 Rs stamp paper.

Students wanting to avail an unsecured education loan of up to 7.5 lacs can apply for CGFSEL through the Vidya Lakshmi portal or through VidyaLoans, which is a more convenient process.

Apply for CGFSEL through Vidya Loans

Vidya Loans was established with the aim of processing 7.5 lacs unsecured education loan hassle-free. Here is how you can process your education loan of 7.5 lacs through VidyaLoans.

• Visit the VidyaLoans official website and click on the ‘apply’ button
• Fill out your details like name, email ID, mobile number, city, loan amount, and college/university name, and then click on submit.
• You will receive a callback from the VidyaLoans Loan officer who will process your education loan within 15 working days post submission of all the documents.