PM Vidyalaxmi Scheme is similar to Education Loa in a way, but still it is different from traditional education loan in many ways. Understand the difference between them in 5 points here.
These days PM Vidyalaxmi Scheme is much talked about. This scheme, launched some time ago, has been designed keeping in mind those students who need financial help for higher education. This scheme is also similar to Education Loan in a way, but still it is different from traditional education loan in many ways. Let us know what is the difference between PM Vidyalaxmi Scheme and Education Loan.
What is PM Vidyalaxmi Yojana?
Pradhan Mantri Vidyalaxmi Yojana is an initiative of the Government of India, which aims to provide easy financial assistance to students for higher education. PM Vidyalaxmi Yojana not only provides loans to students but also scholarships. Along with education, students also get other financial services under this scheme, such as bank loans, scholarships and concessions on loans. This scheme gives Indian students the opportunity to get the necessary financial assistance for higher education abroad and also domestically.
What is an education loan?
An education loan is a loan given by banks or other financial institutions to students for their higher education. This loan is provided to cover tuition fees, books, accommodation, travel and other expenses related to all educational institutions. This loan usually has to be returned with interest within a fixed time period. There is no provision for scholarship in education loan.
Understand the difference between the two from these 5 points
- Under the PM Vidyalakshmi Yojana, students can get special concessional interest rates, as it is funded by the government. The objective of this scheme is to provide loans to the students at low interest rates, so that they can easily complete their education. At the same time, the interest rates in education loan are decided by the bank or financial institution. Although there may be some concessions on the loan provided by the government, but usually the interest rate is high.
- In the PM Vidyalakshmi Yojana, students get an opportunity to apply for all loans and scholarships at one place. For this, a centralized online portal has been arranged, from where students can apply for loans and scholarships of various institutions. At the same time, the application process for education loan varies from bank to bank. In this, most banks have their own specific eligibility conditions and application process. Students have to follow the terms and conditions of a certain bank to get a loan from it.
- PM Vidyalakshmi Yojana provides financial assistance to students for various expenses of education, which also includes tuition fees, living expenses, travel expenses, books, and other requirements like laptop / computer. At the same time, in education loan, banks mainly cover tuition fees, coaching fees, book expenses, hostel fees, and other related expenses to the students. Loans are also provided by some banks for laptops and other equipment, but it depends only on the policies of some banks.
- The loan repayment process under the PM Vidyalakshmi Yojana is simple and flexible. Along with this, students get the ease of repaying the loan after completing their education, or in some cases during education. Some schemes offer concessions and the loan repayment period can be longer. On the other hand, the loan repayment process under the education loan usually starts after the student completes his education. In this, a ‘cooling period’ is given to the student by some banks, but it comes with strict rules for repaying the loan. Along with this, interest rates also apply.
- The loan amount under the PM Vidyalakshmi Yojana is determined according to the educational institution and course of the students. This scheme provides sufficient amount to meet most educational needs. However, the loan amount in education loan is decided by the bank, and this amount is usually according to the educational needs of the students. In some cases, students can get higher loan amount for higher education.
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