Looking for an education loan to finance your technical education?

Look no further. This page summarises all the information you will need on SIB’s Skill Loan Scheme for technical courses

South Indian Bank Skill Loan

This loan helps students who have gained admission into technical courses offered by Industrial training Institutes (ITIs), polytechnics and other recognised institutions to pay for their course fees. The loan amount starts from Rs. 5,000 and can go up to Rs. 1.5 lakh depending on the duration of the course. This loan scheme is modelled on the Pradhan Mantri Kaushal Vikas Yojana (PMKVY). Let’s look at its features:

Features of SIB Skill Loan Scheme for Technical Courses

Why this Loan?

  • The loan is meant for you if you have gained admission into a technical course offered by a polytechnic, training institute (ITI), etc. in India
  • The bank disburses the South Indian Bank Skill Loan as a series of payments over the required number of terms or years to pay the course fees or other approved charges

Loan Amount

  • The minimum loan amount starts from Rs. 5,000 and the maximum amount can go up to Rs. 1.5 lakh depending on the duration of the course


  • The interest rate for this loan is the sum of the Repo Rate which as of November 2020 stands at 4.00% and a spread that ranges from 7.05% to 7.30%. This makes the effective interest rate range from 11.05% to 11.30% as of November 2020
  • Earlier in October 2020, the interest rate for this loan was the sum of Repo Rate + 6.90%. As of October 2020, Repo Rate was 4.00% which made the effective interest for this loan 10.90%
  • Simple interest is charged monthly during the repayment moratorium period
  • SIB offers a 1% concession in the rate if interest is serviced during the moratorium period or if the interest is funded during the moratorium, then for prompt payment of EMI


  • Repayment period for this loan is in the range of 3 years to 7 years after course completion
  • The repayment moratorium for courses of less than 1 year is for the course duration and an additional grace period of 6 months after course is completed
  • The repayment moratorium for courses of over 1 year duration is for the course duration and an additional grace period of 12 months after course is completed

Security Needed

  • South Indian Bank does not ask for any security or third party guarantee. However, the parents have to sign the loan documents with the student as guarantors
  • If the child is a minor, then parents can take the loan on her behalf


  • The borrower should be an Indian national
  • The student must have secured admission into a technical course offered by a recognised institute in the country

Eligible Courses

  • Students of courses offered by Industrial Training Institutes (ITIs), polytechnics, schools recognised for the same by the central or state education board or college affiliated to a recognised university are eligible for the loan
  • Even students pursuing a certificate, diploma or degree course from training centres that are affiliated to professional skill augmentation bodies such as National Skill Development Corporation (NSDC), sector skill councils, state skill missions, state skill corporations and who operate under the National Skill Qualification Framework (NSQF) are eligible to apply for the loan
  • The bank allows its State Level Bankers committee (SLBC) or State level Co-ordination Committee (SLCC) to add state-specific skill development courses that offer good employability opportunities for course students
  • There is no minimum course duration

Borrower Contribution to Total Cost (Margin Money)

  • The borrower must pay 10% of the total loan amount as margin money

Note: Margin money refers to the amount the borrower contributes to the overall amount required.

Processing and Other Charges

  • There are no processing charges for this loan

Uses of the Loan

  • The loan amount can be used to pay any fees or other charges that are a part of the standard tuition cost
  • The loan can also be met to cover examination, library and laboratory fees
  • It also covers any caution deposit fees
  • It can also be used to buy books or equipment or instrument needed for the course

Other Features to Know

  • It is mandatory to go for the SIB EDUGUARD insurance scheme when you opt for this loan
  • Top-up loans are allowed within the overall eligibility and within the moratorium period of the first course or within 3 years after repayment of the first loan
  • The student’s progress report may have to be submitted with the bank at regular intervals
  • The loan is disbursed directly to the college, bookseller or publisher, computer seller, and so on and not to the applicant(s)
  • Borrowers can avail tax benefit under Section 80E of the Income Tax Act, 1961 for the interest paid on this loan, if eligible

Documents Needed

  • Application Form duly filled and signed by applicant and/or guarantor along with details of applicant and/or guarantor and family
  • Two Passport Size Photographs of student, applicant and/or guarantor
  • Personal Identification Proofs (Any One) of the Student and Co-borrower: Electoral I-Card, Passport, Driving License, PAN Card or Aadhaar Card
  • Residential Address Proof (Any One) of the Student and Co-borrower: Electricity Bill, Landline Telephone Bill, Electoral or Voter ID Card or Passport
  • Admission Letter, Course Details and Prospectus
  • Statement of the cost of study and Fee Details with Demand of Fee by the Institution
  • All Proofs of Past Academic Record including Mark Sheets and Certificates
  • Copy of Passport is mandatory
  • Proof of Income of the Co-borrower (Salaried): Salary Slip of last 3 months, Copy of Form 16 of last 2 years and Bank Account Statement of last 6 months
  • Proof of Income of the Co-borrower (Self-employed): Business Address Proof, IT return of last 2 years, TDS Certificate, Bank Account Statement of last 6 months andCertificate of Qualification if Doctor, CA, etc.

Reference Facts

  • South Indian Bank Website: www.southindianbank.com
  • Headquarters: Thrissur, Kerala
  • Call Centre Number: 1800 425 1809, 1800 102 9408; +91 484 2388 555 (NRIs)

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