IDBI Central Interest Subsidy Scheme on Education Loan

About the IDBI Central Interest Subsidy Scheme

The IDBI Central Interest Subsidy Scheme on education loan is available to Indian students from EWS backgrounds having annual parental income not exceeding ₹4.5 lakh. It supports professional and technical courses in India. The scheme perfectly complements a child investment plan, allowing parents to support their child’s future without stressing about loan interest during the study period. Students and parents can also claim tax benefits under Section 80E of the Income Tax Act.

IDBI Central Interest Subsidy Scheme Interest Rates

The rate of interest for all variants of education loans under the IDBI Education Loan Scheme is fixed at 11.50% for the first 5 years. After this fixed period, the rate may be revised per the bank’s applicable terms. The interest rates under this scheme are linked to the bank’s base rate. They may vary based on the loan amount, academic institution, and borrower profile.

Note: The interest rates are based on IDBI Bank’s prevailing terms as of 18 June 2025. These are subject to revision depending on RBI Repo Rate changes and internal bank policy updates.

Features of the IDBI Central Interest Subsidy Scheme

Here’s what makes the IDBI Central Interest Subsidy Scheme attractive for students:

• 100% Interest Subsidy: The government pays the full interest amount during the moratorium period.

• Loan Limit for Subsidy: Interest subsidy is available for loan amounts up to ₹7.5 lakhs.

• No Collateral Required: Students don’t need to provide any security or collateral for loan amounts up to ₹7.5 lakh.

• Supports Long-Term Planning: This works well for those planning a child education allowance or looking to structure long-term funding for higher education.

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Eligibility for IDBI Central Interest Subsidy Scheme

To apply for this scheme under IDBI Bank, students must meet these basic requirements:

• Citizenship & Income: Indian citizens from EWS with parental income less than ₹4.5 lakh (certified by DLCC authority).

• Course & Institution: Must be enrolled in approved technical/professional courses after Class 12 in recognised Indian institutions.

• Loan Type: The Loan must be sanctioned under the IBA Model Education Loan Scheme.

• Subsidy Period: Interest subsidy applies only during the moratorium (course period + 1 year or 6 months after job).

Documents Required for IDBI Central Interest Subsidy Scheme

Here are the typical documents you need to apply for the IDBI Central Interest Subsidy Scheme:

• An income certificate issued by a competent authority.

• An admission letter from a recognised Indian institution.

• KYC documents (PAN, Aadhaar, etc.) for both the applicant and co-applicant.

• Proof of course fees and structure.

• Education certificates from Class 10 onward.

Most Important Terms and Conditions

Here’s a brief overview of the key terms and conditions of the IDBI Central Interest Subsidy Scheme:

• Single Use Only: The subsidy is offered only once for bachelor’s, master's or integrated courses. So it is important to plan carefully, especially if it is part of a child education plan.

• Loan Tenure: Repayment starts after the moratorium period ends, giving you breathing room during studies. The total loan tenure, including this period, can extend to 15 years.

• Moratorium Benefit: The government pays the full interest during your course and for one year after it ends, which eases the repayment burden early on.

• Course Discontinuation Clause: No subsidy is granted if the course is dropped midway or the student is expelled, except in genuine medical cases backed by proper documents.

• Disbursement Timeline: Only education loans disbursed on or after April 1, 2012, qualify for this subsidy. Loans given before this date are not covered.