Federal Special Vidya Loan

About the Federal Special Vidya Loan

The Federal Special Vidya Loan is an education loan that supports Indian students pursuing professional and technical courses in India or abroad. It covers key expenses like tuition, exams, books, accommodation, and travel for overseas studies. The admission has to be through entrance tests or merit. The loan offers flexible terms and features that align with long-term child investment plans, making it a smart financial move for parents and students alike. 

Federal Special Vidya Loan – Rate of Interest

The interest rate for the Federal Career Solutions Loan varies based on your choice of a floating or fixed option.

• Floating Interest Rate: 11.75% onwards

• Fixed Interest Rate: 15.00%

Note: The rates are updated as per Federal Bank’s latest terms as of 19 June 2025. These may change based on RBI Repo Rate movements or updates to the bank’s lending policies.

Features of the Federal Special Vidya Loan

Some of the key highlights of the Federal Special Vidya Loan include:

• Covers Higher Studies in India & Abroad: Applicable for higher education (excluding vocational training and skill development courses).

• Minimal Paperwork: a simplified documentation process makes applying stress-free and convenient.

• Flexible Repayment: No repayment is required during the moratorium; repayment begins later in easy EMIs.

• Child Education Allowance: Applicants can claim a child education allowance along with the loan for added tax benefits.

• Speedy Loan Approval: Quick processing ensures timely access to funds for your education journey, whether you apply by visiting the nearest branch, calling the contact centre, or through the PM Vidya Lakshmi Portal.

Investment

Secure

Secure your child’s future with or without you

Start Investing

₹10,000/Month

& Get

₹1 Crore^*

VIEW PLANS

*Standard T & C Apply

Eligibility for the Federal Special Vidya Loan

To apply for the Federal Special Vidya Loan, the student must meet the following criteria:

• Nationality: The applicant should be an Indian National.

• Admission: Must have secured admission to professional or technical courses through an entrance test or selection process.

• Course & Institution: The course and institution must have the necessary approval or recognition.

• Certification: The course certificate should be issued by a University, Government Department, or a body established by an Act of Parliament.

Documents Required for Federal Special Vidya Loan

Ensure the following documents are ready when applying for the Federal Special Vidya Loan:

• Proof of Identity: Passport, Voter ID card, Driving License, or PAN Card

• Admission Letter: Offer letter or admission confirmation from the educational institution

• Academic Records: Basic qualification certificates and mark sheets

• Address Proof: Ration card, utility bills (telephone/electricity), rental agreement, passport, trade license, or sales tax registration certificate.

• Fee Structure: Proof of the course fee structure issued by the institution

Most Important Terms and Conditions of Federal Special Vidya Loan

Here are the key terms and conditions of the Federal Special Vidya Loan that applicants and co-borrowers should be aware of before applying:

• Quantum of Finance: The loan amount is determined by the repayment capacity of the student and the parent. Continued disbursement requires satisfactory academic performance.

• Margin Requirements: The margin requirement is nil for loans up to ₹4 lakhs, 5% for higher studies in India, and 15% for studies abroad.

• Loan Tenure: The repayment term is a moratorium period + 15 years. Moratorium includes the course duration plus one year.

• Co-Obligants: Both the student and a parent or guardian must apply as joint borrowers, sharing the responsibility for repayment. 

• Security Requirements: No security is required for loans up to ₹4 lakhs, while loans up to ₹7.5 lakhs may require a third-party guarantee or collateral; loans above ₹7.5 lakhs must be backed by collateral security with the stipulated margin.