Understanding Interest Rates and Repayment Options for Skill Development Loans

Jun 2, 2024
 |  1 min read

Introduction

Skill development loans are the best way for you to enhance your skills and improve your employability. These allow you to do specialized courses and training programs. So, it is important to know what are interest rates for skill development loans.

Let us learn about how do interest rates for skill development loans compare to other types of loans. Given below is a detailed information regarding the same.

What are the Interest Rates for Skill Development Loans?

Skill development loans support your pursuit of vocational training. These loans can be accessed with minimal collateral requirements. The interest rates of these loans can vary depending on the loan amount, the applicant's profile and the repayment tenure.

How are Interest Rates for Skill Development Loans as Compared to Other Types of Loans?

When you compare skill development loan interest with other loan interest, they are generally offered at lower interest rates. Here is how does interest rates for skill development loans as compared to other types of loans:

  • Skill Development Loans: Designed to help you upskill yourself.
  • Personal Loans: Not backed by any kind of collateral.
  • Home Loans: Secured by the property you are purchasing.

What are the Benefits of Skill Development Loans?

Lack of funds can hinder your ability to learn. But there are many loan schemes like skill development loans that can improve your career graph and speed up your personal development as well as your career.

If you are curious to know what are the benefits of skill development loan, here are a few pointers for you:

  • Get your loan approval and your money disbursed into your account within minutes.
  • Several financial services tie up with institutions that tend to offer no-cost loan options.
  • Get adequate finances to enhance your career.
  • No processing and documentation fees will be needed.
  • There is no need for security.
  • It can boost your professional self-esteem.
  • Upskilling often leads you to connect with other professionals in the field.

What are the Eligibility Criteria for a Skill Development Loan?

After understanding the benefits, you would like to understand what are the eligibility criteria for a skill development loan. It includes the following key points:

  • The minimum age of the applicant must be 18 years.
  • The applicant must be an Indian citizen or a permanent resident.
  • Minimum educational qualification, such as passing the 10th standard or equivalent.
  • Course or training programs should be recognised by the government.
  • Institutions offering the course should be accredited or recognized by the relevant authorities.
  • Documentation like identity proof, address proof, educational certificates, proof of admission, and course fee structure.

What is the Duration of the Skill Development Loan?

The total duration of your skill development loan will vary depending on the length of the course you have applied.

After your course is completed, the repayment period will start with a moratorium period of up to 6 months, allowing graduates the necessary time to find employment.

How to Apply for the Loan?

Once you understand the requirements for the skill development loan, here is how to apply for the loan.

  • Step 1: Identify the skill development course.
  • Step 2: Check if the bank you picked is providing the scheme.
  • Step 3: Gather all the crucial documents.
  • Step 4: Fill out the application form with all the details.
  • Step 5: Once the application is successful, the bank is willing to sanction the loan amount.
  • Step 6: No repayments are needed during the moratorium period. You can repay it as per the agreed-upon schedule.

Conclusion

The government has created a skill development loan to make it easier for students to upgrade themselves and grow their careers without any financial strain. They are available in both financial and non-financial institutions, thus helping students achieve much-needed academic independence without any hassle.

mPokket is a go-to application for any type of financial solution, like how to boost credit score or to understand what are the standard repayment periods for skill development loans. They have both short-duration and long-duration quick cash online solutions for college and school students. They offer practical solutions to those who require urgent cash to build their careers.

Gaurav Jalan

Gaurav Jalan is the Founder and CEO of mPokket, a digital lending platform serving underserved Indian youth. He leverages technology and experience to deliver cost-effective credit to marginalized populations. In his role, he provides strategic direction and oversees execution to fulfill mPokket's mission.