CGFSEL Education Loan Scheme

The Credit Guarantee Fund Scheme for Education Loans (CGFSEL) is managed by the National Credit Guarantee Trustee Company Ltd. (NCGTC), established under the Department of Financial Services, Ministry of Finance, Government of India.
This initiative enables students to avail of education loans up to ₹7.5 lakh without the need for collateral or a third-party guarantor. The maximum interest rate chargeable under this scheme is 2% above the bank’s base rate.

Note: The base rate is the minimum lending rate fixed by the RBI, and banks calculate their loan interest rates by adding a margin to this base rate.

Eligibility

The scheme is always open, and students must meet the following requirements:

Must be an Indian citizen.
Should have passed Higher Secondary Education (Class 12 or equivalent).
Must have secured admission to a recognized institution in India or abroad for higher education.
Admission should be based on merit or an entrance exam after Class 12.
For postgraduate or research programs, eligibility may depend on entrance exams or selection processes, not just qualifying marks.

Financial Eligibility:

The student’s loan account should have no overdue payments at the time of application.
For loans up to ₹4 lakh, no margin is required.
For loans above ₹4 lakh, a 5% margin applies for studies in India and 15% margin for studies abroad.

Courses Covered

In India:

Graduate, postgraduate, and diploma programs recognized by UGC, Government, AICTE, ICMR, etc.
Professional programs like CA, ICWA, CFA.
Courses at reputed institutes such as IITs, IIMs, IISc, XLRI, NIFT, NID, etc.
Specialized training like pilot training, aeronautics, shipping, nursing, approved by relevant regulatory bodies.
Programs in India offered by reputed foreign universities.

Abroad:

Graduate-level professional/technical courses at reputed foreign universities.
Postgraduate degrees such as MBA, MS, MCA, etc.
Courses offered by recognized professional bodies like CPA (USA), CIMA (UK).
Technical/professional diploma/degree courses acknowledged by competent regulatory authorities.

Benefits of the Scheme

75% of the defaulted loan amount is guaranteed by NCGTC, reducing risk for banks.
Interest rates are capped at 2% above the base rate.
No margin is required for loans up to ₹4 lakh.
For higher amounts: 5% margin (India) and 15% margin (abroad).

Expenses Covered:

Tuition, exam, hostel, library, and laboratory fees.
Travel expenses for overseas study.
Insurance premiums for the student.
Refundable deposits (with receipts).
Books, instruments, computers (if essential), uniforms.
Project work, study tours, thesis expenses.
Off-campus lodging and boarding.

Security Requirements

Up to ₹4 lakh: Parents as joint borrowers, no collateral/guarantor needed.
₹4 lakh – ₹7.5 lakh: Parents as joint borrowers + third-party guarantee (waivable in special cases).
Above ₹7.5 lakh: Parents as joint borrowers + tangible collateral.

Collateral may include property, government securities, LIC policies, mutual funds, gold, or other acceptable assets.

Repayment Rules

Moratorium period: Course duration + 1 year or 6 months after job placement.
Extension: Up to 2 years if course completion is delayed.
If course is discontinued: Bank will decide repayment terms with student & parent.
Repayment tenure:
- Up to 10 years (for loans ≤ ₹7.5 lakh).
- Up to 15 years (for loans above ₹7.5 lakh).
Prepayment: Allowed without penalty.
Concession: 1% interest rebate if interest is serviced during study + moratorium period.

Documents Required

Duly filled loan application form.
Supporting documents as per the lending bank’s requirement.
Partner banks include leading public, private, and regional banks under the Indian Banks’ Association (IBA).

Application Process

Visit the online application portal and click Apply Now.
Register with basic details (or log in if already registered).
Navigate to the Apply Now section on the dashboard.
Complete and submit the application form.
Log in via Student Login with email, password, and captcha.
Fill in details including personal, academic, and required documents.
Submit the application and download a copy for reference.

Frequently Asked Questions (FAQs)

Q1. What is the CGFSEL Education Loan Scheme?
The Credit Guarantee Fund Scheme for Education Loans (CGFSEL) is a government-backed initiative that allows students to get education loans up to ₹7.5 lakh without providing collateral or a third-party guarantor.

Q2. Who manages the scheme?
It is implemented by the National Credit Guarantee Trustee Company Ltd. (NCGTC) under the Ministry of Finance, Government of India.

Q3. What is the maximum loan amount I can get under CGFSEL?
Students can avail of loans up to ₹7.5 lakh.

Q4. Is collateral security required?

For loans up to ₹4 lakh: No collateral or guarantor required.
For loans ₹4 lakh – ₹7.5 lakh: Third-party guarantee may be needed.
For loans above ₹7.5 lakh: Tangible collateral is required.

Q5. What is the interest rate under this scheme?
The interest rate is capped at 2% above the bank’s base rate.

Q6. Which courses are covered under CGFSEL?

Graduate, postgraduate, and diploma programs in India recognized by UGC/AICTE/Government.
Professional courses like CA, ICWA, CFA.
Programs at reputed institutes (IIT, IIM, IISc, XLRI, NIFT, NID, etc.).
Overseas graduate and postgraduate professional/technical courses (MBA, MS, MCA, etc.).
Courses by recognized professional bodies (CIMA, CPA, etc.).

Q7. What expenses are covered under the loan?
The loan covers tuition fees, exam/hostel/library/lab fees, travel (for abroad studies), insurance, books, computers (if required), project/thesis costs, and lodging/boarding expenses.

Q8. What is the repayment period?

Up to ₹7.5 lakh: Maximum 10 years.
Above ₹7.5 lakh: Maximum 15 years.
Repayment starts after the moratorium period (course duration + 1 year or 6 months after employment).

Q9. Do students get any concession on interest?
Yes. A 1% concession on interest is available if students pay the interest during their course period and moratorium.

Q10. How can I apply for CGFSEL?
You can apply online by registering on the loan portal, filling in your details, uploading documents, and submitting the application. After submission, download a copy for reference.