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Complete information on education loans for vocational courses in India.

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Education Loan for Vocational Courses

Vocational Education, also termed as Vocational Education and Training (VET), helps prepare you for specific trades, careers at various levels like crafts, technician and also fetches you professional positions in fields of medicine, nursing, accountancy, engineering, law, pharmacy etc.

To be more specific, these courses form a part of non-academic courses and are particularly attached to specific trade or occupation. In these courses you are able to develop expertise in a specific technology, vocation or set of procedures of your choice. There are places wherein vocational education is also known as technical education and you are able to attain expertise in your chosen field of techniques.

Vocational Education has gained a lot of momentum in recent years yet it has not been able to grab its share in the traditional definition of higher education. However, vocational education can be attained at secondary or post-secondary levels.

Keeping pace with the fast changing scenario, vocational education has diversified itself in the fields of information technology, tourism, retail, tailoring, beauty care, library assistant, electrical technician, mobile repairing, repairing of electronic appliances, cottage industries, cosmetics, funeral services etc.
Vocational Trainings Courses are imparted at Industrial Training Institutes (ITIs) and Industrial Training Centers (ITCs), polytechnic institutes and a number of other technical bodies. These are operated by government agencies or by private institutions.

Government Statistics reveal that in recent years lack of funds forced approximately 50 percent of students who had enrolled in these courses to withdraw their training in the middle of their education and training. In order to curb such a situation, Indian Banks Association put forth a Model Loan Scheme for students aspiring to take up Vocational Courses.

Education Loans for Vocational Courses

– In order to be eligible to obtain education loan for vocational courses you need to fulfill the following eligibility.
  • The first criteria for obtaining education loan for vocational courses is that you should be enrolled in a course that has received recognition by state government or central government and your course should pave way for a certificate, degree or diploma. The course should be such that would lead to employment after the tenure.
  • You need to be an Indian National who has cleared the 10th standard examination.
  • The tenure of the course may be of 2-3 months to 3 years.
Expenses Covered – The expenses that get covered within the frame of education loan for vocational courses are as follows –
  • Tuition fees or Course Fees
  • Charges for the purchase of books, equipments and instruments
  • Examination fees
  • Laboratory fees
  • Caution money
  • Library fees
  • Any other expenses that are required to complete the course.
Loan Amount/Quantum of Finance – The loan amount that can be sanctioned to you under the head of education loan for vocational courses varies from bank to bank and course to course. Banks, however, are willing to lend an amount ranging from Rs 50,000 to Rs 1,50,000.
  • Courses up to 3 months – Rs 20,000
  • Courses ranging from 3 months to 6 months – Rs 50,000
  • Courses ranging from 6 months to 1 year – Rs 75,000
  • Courses above 1 year duration – Rs 1,50,000
The sanctioned amount may vary from bank to bank - banks like State Bank of Patiala sanctions Rs 50,000 education loan for vocational course for a course whose duration is up to 1 year and courses with duration more then 1 year qualify for a loan of Rs 1, 50,000.

Age Criterion
– If you wish to apply for education loan for vocational courses there is no age restriction as such. In the case where the student is minor the documentation for loan is executed by the parents/guardian and a letter of ratification is obtained by the bank once the student attains majority.

Interest Rates
– The interest rates for education loan for vocational courses also vary from bank to bank. Majority banks charge interest rates falling in the slab of 12 percent to 13.75 percent.
Security Requirement – While you opt for an education loan for vocational course you need to provide a collateral security or a guarantor. Banks, however, prefer the parents/guardians to be the co-borrower.

Moratorium Period
– This is the period post completion of the course after which the repayment of the loan amount would begin.
  • Courses up to 1 year – 6 months from the completion of course
  • Courses above 1 year – 12 months from the completion of the course.
Repayment of Loan – Majority of the banks and financial institutions prefer to give education loan for vocational courses to be repaid on Equated Monthly Installments (EMIs). For course whose tenure is up to 1 year, the repayment needs to be made within a maximum of 3-5 years after completion of the course. For courses that have tenure of more than 1 year, the repayment needs to be made within a maximum of 5-7 years.

Processing Fees
– There is no processing fee charged to you for vocational education loan.

– This is left to the requirement of the borrower.

Prepayment of Loan
– You are entitled to repay the loan immediately after the commencement of repayment and you will not have to pay any prepayment charges.

Banks Offering Education Loan for Vocational Courses in India

Following are the banks that provide you with educational loan for vocational courses
Bank Name
Scheme Name
Corporation Bank
CorpVidya scheme for vocational & skill development courses.
United Bank of India
United Education Loan Scheme for Vocational Education and Training
State Bank of India
Loan Scheme for Vocational Education and Training
Punjab National Bank
PNB Kaamgar
Oriental Bank of Commerce
Oriental Education Loan Scheme for Vocational Courses
Bank of Baroda
Baroda Education Loan for Vocational Education & Training
Andhra Bank
Model Scheme on Educational Loans for pursuing Vocational Courses
Abhyudaya Co-operative Bank Ltd.
Scheme for Education Loan for Vocational Courses