Sarkari Rojgar Kendra Logo Sarkari Rojgar Kendra
Central Government Scheme

Skill Loan Scheme: A Practical Guide to Funding Skill Training in India

Apply online, check eligibility, required documents, benefits, application process, beneficiary list and all important details about Skill Loan Scheme: A Practical Guide to Funding Skill Training in India.

Last Updated: 07 Feb 2026 By Mehul Panchal Read Time: 6 min

Quick Overview

Scheme Name
Skill Loan Scheme
Launched By
Ministry of Skill Development and Entrepreneurship (MSDE), Government of India
Benefit
Collateral-Free Loan Rs. 5,000 to Rs. 7,50,000 for Skill Training
Target Beneficiaries
Indian Nationals Pursuing NSQF-Aligned Skill Development Courses
Application Mode
Direct Application to Participating Banks
Current Status
Active
Processing Fee
NIL
Collateral
Not Required (Covered under CGFSSD)

Overview of Skill Loan Scheme

Skill Loan Scheme is a Central Government scheme launched in 2015 under the Ministry of Skill Development and Entrepreneurship (MSDE). The scheme provides affordable institutional credit to individuals pursuing skill development and vocational training courses aligned with the National Skill Qualification Framework (NSQF) and/or Non-NSQF aligned courses by training entities onboarded on the MSDE's Skill India Digital Hub (SIDH) platform.

The scheme operates through scheduled banks (Public Sector Banks, Private Sector Banks, Foreign Banks, Small Finance Banks) and NBFCs/NBFC-MFIs registered with the National Credit Guarantee Trustee Company (NCGTC). Loans are fully covered under the Credit Guarantee Fund Scheme for Skill Development (CGFSSD), eliminating the need for collateral or third-party guarantees.

The objective is to facilitate easy and affordable access to financial assistance for individuals seeking to enhance their skills through vocational training and skill development courses, thereby improving employability and contributing to economic growth.

Benefits of Skill Loan Scheme

Loan AmountRs. 5,000 to Rs. 7,50,000
CollateralNot Required (CGFSSD guarantee covers full amount)
Processing FeeNIL
MarginNIL (100% financing)
Interest RateEBLR + 1.5% p.a. (scheduled banks) | Max 21% p.a. (NBFCs)
Moratorium Period6 months (course ≤1 year) | 12 months (course >1 year)
RepaymentUp to 3 years (≤Rs. 50K) | Up to 5 years (Rs. 50K-1L) | Up to 7 years (>Rs. 1L)
Interest ServicingOptional during study period and moratorium (concession if serviced)
Loan DisposalMaximum 6 working days from complete application
Covered ExpensesTuition fees, exam fees, equipment costs, learning materials, other course-related costs

Eligibility Criteria for Skill Loan

NationalityIndian National
CourseNSQF-aligned courses and/or Non-NSQF aligned courses on MSDE's SIDH platform
InstitutionITIs, Polytechnics, NSDC-affiliated training partners, State Skill Missions, recognized schools/colleges
AgeNo specific age restriction (minor: parent executes documents, student ratifies at majority)
Minimum QualificationAs required by the enrolling institution
Course DurationNo minimum course duration required
Co-borrowerParent/Guardian (married person: spouse or parent(s)-in-law also acceptable)
Credit HistoryNot required (student assumed creditworthy)
KYCAadhaar number accepted as valid proof

Who Cannot Apply

  • Non-Indian nationals
  • Students not enrolled in NSQF-aligned or SIDH-onboarded Non-NSQF courses
  • Courses at unrecognized institutions not affiliated to NSDC/SSCs/State Skill Missions
  • Purely academic degree courses without vocational skill components
  • Training courses not recognized by relevant regulatory bodies

Documents Required for Skill Loan

  • Aadhaar Card (valid KYC proof)
  • Identity Proof (PAN/Passport/Voter ID/Driver's License)
  • Address Proof (Utility Bill/Ration Card)
  • Passport-sized photographs
  • Admission/Offer Letter from training institution with complete fee breakdown
  • Course fee schedule on institutional letterhead
  • Previous academic mark sheets (10th, 12th, graduation if applicable)
  • Bank account details (savings account)
  • Income proof of co-applicant/guardian (salary slip or ITR)
  • Gap certificate (if applicable)

Application Fee

There is no processing fee or upfront charges. The loan has NIL margin — 100% of course costs are financed.

How to Apply for Skill Loan

The Skill Loan is applied directly through participating banks. There is no central online portal:

Step 1: Select Course and Institution

  1. Research NSQF-aligned courses or Non-NSQF courses on MSDE's Skill India Digital Hub (SIDH) platform
  2. Verify institution recognition (ITI, Polytechnic, NSDC-affiliated, State Skill Mission, etc.)
  3. Obtain admission/offer letter with complete fee breakdown

Step 2: Approach Participating Bank

  1. Visit branches of Public Sector Banks (SBI, PNB, Bank of Baroda, etc.) or Private Sector Banks (ICICI, HDFC, Axis, etc.)
  2. Compare interest rates, moratorium provisions, and repayment terms across banks
  3. Submit loan application with all required documents

Step 3: Loan Processing and Disbursement

  1. Bank verifies documents and institutional recognition (maximum 6 working days)
  2. Loan amount disbursed directly to training institution (not to borrower)
  3. Repayment begins after moratorium period (6-12 months from course completion)

Repayment Structure

Loan up to Rs. 50,000Up to 3 years
Loan Rs. 50,001 to Rs. 1,00,000Up to 5 years
Loan above Rs. 1,00,000Up to 7 years
Moratorium (Course ≤1 Year)6 months from course completion
Moratorium (Course >1 Year)12 months from course completion

Important Links

Skill India Digital Hubskillindiadigital.gov.in
MSDE Official Websitemsde.gov.in
NCGTC (Credit Guarantee)ncgtc.in
NSDCnsdcindia.org
Disclaimer: The information provided on this page is for general purposes only. Please visit the official website for more details.
New Posts
Related Schemes

Mehul Panchal

Content Writer (New Government Yojna & Scheme Updates)

With over a decade of expertise, I am a dedicated content writer and the founder of Sarkari Rojgar Kendra. Holding a BA in English, I specialize in delivering clear, "zero-error" recruitment updates. My mission is to bridge the gap between job seekers and their career goals through high-quality, reliable information. Contact : Email : helperr777@gmail.com Whatsapp : 92228317067

View All Posts