Announced in June 2006, Padho Pardesh scheme is a programme that offers financial aid to meritorious students from the minority community. It is undertaken by the National Commission for Minorities, offering interest subsidy for overseas studies to eligible students pursuing degrees like Masters, M. Phil, and Ph.D.
The PP programme was first implemented in 2014 when it saw substantial participation of approximately 546 students who secured interest subsidy on their education loan against property. Till FY17, approximately 2,115 students were awarded interest subsidy on a proportionate basis of 57%.
The primary objective of this scheme is to assist students hailing from minority communities in India and provide them better opportunities for higher education and employability. Applicants meeting the eligibility criteria for this scheme can even avail 100% subsidy on mortgage loans like education loan against property if they utilise the credit as a study loan abroad.
Ministry of Minority Affairs monitors the performance of this scheme via a web-enabled monitoring mechanism that ensures transparency throughout its different steps. The financial institution is responsible for furnishing quarterly progress report to the Ministry for evaluation and should maintain detailed information of the student’s institute, class, gender, and contact details.
Applicants will also enjoy a moratorium period, usually one year after the completion of their course or 6 months after getting a job (whichever is earlier).
Subsidy On Padho Pardesh Scheme
Students from the minority community who have secured admission in foreign colleges for Post-Graduate courses will be awarded the interest subsidy under the PP scheme. The amount of subsidy can be equivalent to 100% of the interest accumulated during the moratorium period.
However, the Ministry of Minority Affairs plans to introduce subsidy component only for loans of up to Rs. 20 Lakh under this scheme. The Government of India will only bear the subsidy till the fulfilment of the moratorium period, post which the borrower will be responsible to pay the principal instalments and interest in full.
Students applying for this scheme will have to fulfil both the eligibility criteria set by the programme and qualify for a loan against property by meeting the minimum requirements.
The subsidy will only be awarded to candidates who –
- Secured admission in foreign universities for courses approved by the programme. The courses should be of Masters, M. Phil, or Phd
- One has to apply for benefits under this scheme during the 1st year of the course itself. The ministry will not acknowledge any fresh applications received during 2nd or any subsequent years.
- 35% of all seats will be earmarked for girl students, non-availability of which will transfer those seats to boy students.
- The total income of the borrower/borrower’s family should not exceed Rs. 6 Lakh per annum. It will be calculated based on all income sources, including his or her parents/guardians and self. Applicants will have to submit copies of income certificate issued by the State/Union Territory to support the claim while applying for a student loan in India.
- Applicants who are covered under lower rates of interest by their financial institutions will be preferred while applying for this interest subsidy.
Padho Pardesh Scheme On Education Loan On Property
The above-mentioned regulations make an education loan on property ideal to apply for interest subsidy under the PP scheme. There are several reasons why a loan against property is a better way to finance overseas education; these credits are disbursed against mortgaged property, which lowers the interest rate and improves chances of securing these subsidies significantly.
Moreover, it does not come with any end-usage restriction, allowing a borrower to use the funds for associated expenses like tuitions, skill-building classes, etc.
Several financial institutions, including NBFCs, offer this type of loans for students in India. Their high loan amount, flexible tenor, and instant loan disbursal make it ideal for students who require financial assistance.
They also provide pre-approved offer that make availing such credits simple and time-saving. These offers are available on several financial products, including secured credits like home loans and unsecured loans like personal advances and business loans. You can check your pre-approved offers by sharing only your name and phone number online.
The significant benefit offered by the Padho Pardesh scheme process for merging with a loan against property for education to finance overseas studies. This scheme aims to promote higher education amongst the minority class and curb unemployment in the coming years.