PNB cuts education loan interest rate by 20 bps under PM Vidyalakshmi scheme

State-owned Punjab National Bank (PNB) on Tuesday said it has reduced interest rates on education loans offered under the PM Vidyalakshmi scheme by 20 basis points.

With the revision, education loans will now start from 7.5%, depending on the institution, the bank said in a statement.

The scheme provides financial assistance to students securing merit-based admission in 860 identified Quality Higher Education Institutions (QHEIs) across the country.

This initiative further strengthens the bank's commitment to enhance education accessibility, PNB said.

Under PM Vidyalaxmi, any student who secures admission in quality higher educational institutions (QHEIs) will be eligible for collateral-free, guarantor-free loans. The scheme will cover more than 860 institutions, including those ranked within the top 100 in the National Institutional Ranking Framework (NIRF) in overall, category-specific and domain-specific rankings. The scheme will also apply to the state government-run higher educational institutes ranked between 101 and 200 as well as all central government-run institutions.

According to the Ministry of Education, over 22 lakh students stand to benefit from PM Vidyalaxmi scheme.

Students can borrow up to ₹7.5 lakh without collateral or guarantor. For such loans, the government will cover 75% of any unpaid amount if the borrower is unable to repay.

Students from families with annual incomes up to ₹8 lakh, who are not receiving any other scholarship, will be eligible for a 3% interest subsidy on loans up to ₹10 lakh during the moratorium period. This interest subvention support will be available to one lakh students annually.

"This will support banks in making education loans more accessible under the scheme," the ministry had said.