Interest Free Loans up to ₹5 Lakh: Schemes in India

A brief informational overview to introduce you to key interest-free loan schemes offering up to ₹5 lakh in India.

CM Yuva Udyami Scheme (Uttar Pradesh)

The Mukhyamantri Yuva Udyami Vikas Abhiyan, popularly known as the CM Yuva scheme. The main objective of the scheme is to promote entrepreneurship and self-employment among individuals from all categories in the state.

Under this component, financial assistance of up to ₹10,00,000/- is provided to male applicants from the General Category and Backwards Class for establishing and operating business ventures, thereby fostering economic growth and empowerment in the state.

Receive up to ₹10,00,000/- for setting up a business (50% of the total financial assistance (up to ₹5,00,000/-) is provided as a non-repayable grant. The remaining 50% (up to ₹5,00,000/-) is offered as an interest-free loan, with a nominal 1% interest under specific sub-schemes.)

Interest Free Education Loan Scheme (IFEL)

The Interest Free Education Loan Scheme is designed to provide financial assistance to the youth of Goa, enabling them to pursue higher and technical education in approved degree and diploma courses at undergraduate and postgraduate levels, either in India or abroad. 

Under this scheme, eligible candidates are exempt from paying interest charges, provided they strictly adhere to the repayment schedule. The primary objective is to ensure that economic conditions or financial constraints do not hinder educational aspirations.

The table below outlines the maximum loan amounts available to a candidate each year:

Note: Entitled fees include tuition fees, laboratory fees, development fees, hostel fees, and any other fees charged by the institution.

Interest Free Loan Scheme – Chandigarh Building and Other Construction Workers Welfare Board

The Interest Free Loan Scheme was launched by the Chandigarh Building and Other Construction Workers Welfare Board (CBOCWWB) under the Labour Department, Chandigarh. Under this initiative, interest-free loans are provided to registered construction workers of the Board for the purchase of specified items such as refrigerators, televisions or LCDs, motor cycles or scooters, coolers, fans, and bicycles.

The loan instalments are recovered from the workers’ salaries by their employer. The recovered amount must be deposited through a payee account cheque in favour of the Chandigarh Labour Welfare Board by the principal employer. Repayment of the interest-free loan is made in equal monthly instalments, in accordance with the prescribed rules.

Large Sized Multi Purpose Cooperative Society for Interest Free Loan – Tamil Nadu

The Large Sized Multi Purpose Cooperative Society for Interest-Free Loan scheme, launched by the Co-operation, Food and Consumer Protection Department of Tamil Nadu, aims to provide financial support to citizens through an interest-free loan facility. 

Under this initiative, eligible individuals can access financial assistance of up to ₹45,000 without incurring any interest charges. The scheme is designed to ease financial burdens and promote economic empowerment among beneficiaries.

Large Sized Multi Purpose Cooperative Society: Jewel Loan (Interest Free) – Tamil Nadu

The Large Sized Multi Purpose Cooperative Society: Jewel Loan (Interest Free) scheme, introduced by the Co-operation, Food and Consumer Protection Department of Tamil Nadu, provides interest-free loans of up to ₹1,00,000 through cooperative societies against pledged jewellery. 

The objective of this initiative is to offer financial relief without charging any interest on jewel loans, thereby assisting citizens in meeting expenses or addressing urgent financial requirements.

Read More: Indian Mutual Fund Industry Crosses ₹74 Lakh Crore in AUM! 

Conclusion 

Interest-free loan schemes in India play a vital role in reducing financial strain and supporting livelihoods. These initiatives empower individuals to pursue goals without the added burden of interest repayments.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.