Skill Loan Scheme 2026: Collateral-Free Loans up to ₹1.5 Lakh, Eligibility & Application
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Quick answer
The Skill Loan Scheme provides institutional credit between ₹5,000 and ₹1,50,000 without requiring any collateral to students pursuing NSQF-aligned vocational courses. Individuals admitted to eligible ITIs, polytechnics, recognised colleges, or NSDC-affiliated training centres can access funds for course fees and study materials. Candidates can apply online through participating member banks of the Indian Banks' Association.
At a glance
| Main benefit | Collateral-free loan up to ₹1.5 lakh |
| Ministry / department | Ministry Of Skill Development And Entrepreneurship |
| Level | Central Government |
| Application mode | Online |
About the scheme
Introduced by the Ministry of Skill Development and Entrepreneurship, the Skill Loan Scheme enables individuals to take up technical and skill development programmes without financial constraints. Delivered through member banks of the Indian Banks' Association (IBA) and RBI-notified financial institutions, the initiative funds courses aligned with National Skill Qualification Framework (NSQF) standards. It covers tuition paid directly to training institutes along with associated assessment and study material expenses, supported by credit guarantees through the National Credit Guarantee Trust Company (NCGTC).
Benefits
- Institutional loan assistance between ₹5,000 and ₹1,50,000 for skill development courses.
- Zero collateral security required from the applicant.
- Direct payment of course fees to the training institute, along with funding for assessment, examinations, and study material.
- Concessional interest rate calculated as base rate (MCLR) plus an add-on typically up to 1.5%.
- Moratorium period provided covering the full duration of the course.
- Repayment duration between 3 and 7 years based on loan quantum: up to 3 years for loans up to ₹50,000, up to 5 years for ₹50,000 to ₹1,00,000, and up to 7 years for loans above ₹1,00,000.
Who can apply (eligibility)
- Applicant must have secured admission in a course aligned with the National Skill Qualification Framework (NSQF).
- Course must be conducted by Industrial Training Institutes (ITIs), Polytechnics, or schools recognised by Central or State education Boards.
- Courses delivered by colleges affiliated to a recognised university are eligible.
- Programmes run by training partners affiliated with the National Skill Development Corporation (NSDC), Sector Skill Councils, State Skill Missions, or State Skill Corporations qualify.
- There is no restriction on minimum course duration.
Who cannot apply
- Courses that do not align with National Occupations Standards, Qualification Packs, or the NSQF framework are not covered.
- Institutions or training providers not affiliated with recognised education boards, universities, NSDC, Sector Skill Councils, or State Skill Corporations are not supported.
Documents required
- Proof of admission to an eligible NSQF-aligned course.
- Official fee schedule and expenditure breakdown issued by the training institute.
- Valid identity proof and address proof as per bank norms.
- Prior academic marksheets or certificates requested by the lender.
How to apply
- 1Secure formal admission in an eligible NSQF-aligned course at a recognised ITI, polytechnic, college, or NSDC partner centre.
- 2Collect the admission slip and detailed fee breakdown from the training institute.
- 3Visit the official portal of any member bank of the Indian Banks' Association (IBA) offering the Skill Loan Scheme.
- 4Fill in the online skill loan application form with your personal, academic, and training course details.
- 5Upload the required identity, admission, and fee documents to submit the application for sanction.
Frequently asked questions
What is the maximum loan amount under the Skill Loan Scheme?+
Eligible candidates can receive a loan amount ranging from ₹5,000 up to a maximum limit of ₹1,50,000.
Is collateral or security required to get this loan?+
No, the scheme guidelines explicitly state that banks cannot charge or demand collateral from the borrower.
What is the repayment tenure for the loan?+
The loan must be repaid within 3 to 7 years based on the amount: up to 3 years for loans up to ₹50,000, up to 5 years for ₹50,000 to ₹1 lakh, and up to 7 years for loans exceeding ₹1 lakh.
What does the moratorium period mean under this scheme?+
The moratorium period is the course duration during which the candidate does not have to pay loan instalments.
How is the interest rate calculated?+
The rate of interest is based on the lending bank's Marginal Cost of Funds Based Lending Rate (MCLR) plus an add-on typically up to 1.5%.
Which training institutes are covered under the scheme?+
Eligible institutes include ITIs, polytechnics, schools recognised by Central or State boards, colleges under recognised universities, and training partners affiliated with NSDC, Sector Skill Councils, or State Skill Missions.
NaukriZila is not a government website. Apply only on the official portal; never pay anyone to apply for a government scheme. Source: myScheme (Government of India)