The Padho Pardesh Scheme is a government initiative that aims to encourage students from minority communities to take admission to foreign educational institutes, increasing employment prospects. Launched in June 2006, this scheme extends interest subsidies on education loans to all minority students pursuing their studies abroad. The IBA and Ministry of Minority Affairs, Government of India, operate this scheme.
Individuals first need to acquire a study loan from a financial institution and then apply for Padho Pardesh Scheme.
Rate of interest subsidy
Under the Padho Pardesh scheme, the Government will pay interest on behalf of students during the moratorium period (course time and six months or one year after securing a job). After this period, applicants will pay the remaining interest amount and principal amount.
However, applicants must fulfil certain eligibility parameters to avail the benefits offered under the scheme.
Steps to opt for education loan subsidy under Padho Pardesh scheme
Illustrated below are the steps to opt for interest subsidy on an education loan under Padho Pardesh Scheme:
1: Compare multiple lending institutions and choose one that extends the most suitable education loan.
2: Visit the official website of the chosen financial institution and fill out the online loan application form by entering all required details. Representatives from the lending institution will get in touch with the applicant after they receive the loan application. After eligibility and documentation checks and the loan amount will also be disbursed to the applicant’s account.
3: Inform the financial institution that you want to opt for interest subsidy under Padho Pardesh scheme. The lending institution will update the loan details and the loan term on Padho Pardesh portal if you meet all eligibility criteria for this scheme.
Eligibility criteria of Padho Pardesh scheme
Loan applicants must fulfil the below-mentioned eligibility parameters of the Padho Pardesh scheme to save on the payable interest of an education loan for abroad studies:
- Household income of a beneficiary’s family must not be more than Rs.6 lakh.
- Should not give up the citizenship of India during the subsidy period or course duration
- A beneficiary must possess proof of belonging from minority communities as mentioned under Section 2(c) of the National Commission for Minorities Act, 1992
- Applicant must belong from the EWS category with a gross family income of Rs.6 lakh.
- Moreover, one must present his/her income certificate verified by the State Government to avail of the benefits of this scheme.
- Applicants must take admission in a prestigious and recognised institutional education overseas. However, they must be pursuing courses at Masters, PH. D and M.Phil. levels.
Besides this, individuals must note that the minority education loan scheme is only available on M.Phil., PhD, and Masters abroad courses.
Individuals can acquire an education loan on property if they are seeking a substantial loan amount.
This credit instrument is a type of loan against property, and individuals must ensure that they choose a renowned financial institution to acquire it. This will allow them to benefit from several offers. This includes several pre-approved offers extended on secured and unsecured financial products. These offers help simplify and accelerate the lending process. Applicants can check their pre-approved offers by providing a few details, such as name and contact number.
Benefits of a loan against property
Individuals acquiring a loan against property to fund the high-ticket educational expenses will receive several benefits. However, they must ensure that they fulfil the loan against property eligibility criteria prior to applying. The various benefits of this credit instrument are:
Comes with zero end-use restrictions
This credit instrument provides zero restrictions to the usage of loan proceeds. Hence, it can be used to fund the educational expenses of a student.
Helps acquire a substantial loan amount
Applicants need to pledge their property as collateral to acquire a LAP. The concerned lender sanctions the loan amount based on the pledged property’s current market value. This amount is usually more than that acquired from an unsecured credit instrument.
Comes at a lower interest rate
A lender’s risk is low for a LAP because it is a secured credit instrument and that is why they extend a nominal rate of interest on this credit instrument. A lower interest rate reduces the interest outgo, thereby decreasing the total loan cost for a borrower.
Credit can be repaid over an extended tenor
A LAP comes with an extended tenor. This eases the repayment for a borrower as the equated monthly instalments are spread out, thus lowering the pressure on his/her budget. An extended tenor and a low-interest rate make this credit instrument an affordable option to opt for.
Thus, individuals must keep in mind the above-mentioned details related to Padho Pardesh Scheme.