Top Loan Schemes with Highest Subsidies in India 2026

If you are planning to apply for a government-backed loan and want to maximize your savings through the highest subsidy schemes in India, this updated 2026 guide is for you.

Whether you are an entrepreneur, a farmer, a student, or a first-time homebuyer, the right subsidy loan can significantly reduce your financial burden.

This article covers:

• Meaning of subsidy loans
• Top 10 highest subsidy schemes in India 2026
• Updated scheme details with tables
• Examples for clarity
• Eligibility and benefits
• Keyword-rich yet natural SEO structure

Let’s dive in.

What is a Loan Subsidy in India?

A loan subsidy is financial assistance where the government pays a portion of:

• the interest,
• the principal, or
• provides a capital subsidy on the project cost.

This makes borrowing affordable and encourages entrepreneurship, agriculture, housing, education, and small business development.

Benefits of Subsidized Loans

• Lower EMIs
• Reduced total repayment
• Faster loan clearance
• Increased financial flexibility
• Access to government incentives
• Helps MSMEs, farmers, women entrepreneurs, and low-income families

These schemes are often searched as subsidy loan, loan with subsidy, highest subsidy scheme in India, government subsidy schemes, etc.

Top 10 Highest Subsidy Loan Schemes in India 2026

Below is the curated 2026 list of best subsidy loans, updated with latest guidelines.

1. PMEGP – Prime Minister’s Employment Generation Programme (Highest Subsidy Up to 35%)

A flagship scheme to promote self-employment by funding new micro enterprises. It offers margin money subsidy up to 35 percent for manufacturing and service units. Great for first-time entrepreneurs who don’t have collateral.

Example: If your project cost is ₹20 lakh and you are from a rural area: You get 35% subsidy = ₹7 lakh. You only repay the remaining ₹13 lakh.

2. PMAY 2.0 – Pradhan Mantri Awas Yojana (Interest Subsidy Up to 6.5%)

A housing scheme that provides subsidies on home loans to economically weaker and middle-income groups. Beneficiaries get interest subsidies to make home ownership affordable. Urban and rural versions both exist.

Example: For a ₹6 lakh loan at 9 percent interest, PMAY reduces the effective rate to around 2.5–3 percent.

3. PM Kisan Credit Card (KCC) Subsidy

KCC provides farmers with low-interest credit for cultivation and allied activities. Interest subvention and subsidy reduce effective borrowing cost to as low as 4 percent. Helps farmers manage seasonal cash needs easily.

Example: If the bank rate is 9 percent, farmers pay only 4 percent, remaining covered by Govt interest subsidy.

4. AIF – Agriculture Infrastructure Fund (Interest Subsidy Up to 3%)

A long-term financing facility offering interest subvention and credit guarantee support for agri-infrastructure projects. Supports warehouses, cold storages, processing units, etc. Designed to boost post-harvest value and reduce wastage.

Example: An FPO builds a cold storage facility with AIF support to store vegetables.

5. NLM Scheme – National Livestock Mission (Capital Subsidy Up to 50%)

A scheme promoting livestock development in areas like goatery, sheep farming, poultry, and feed production. Offers capital subsidies up to 50–60 percent. Helps rural entrepreneurs start profitable animal husbandry units.

Example: For a ₹10 lakh goat farming project, you get ₹5 lakh subsidy.

6. NHB – National Horticulture Board Subsidy (Up to 40–50%)

Provides subsidies for horticulture projects like cold storages, greenhouses, and high-value fruit plantations. Capital subsidy usually ranges from 35–50 percent. Encourages modern, technology-based horticulture.

Example: A farmer sets up a greenhouse for cultivating exotic vegetables with NHB subsidy.

7. PMMSY – Matsya Sampada Yojana (Fisheries, Up to 60% Subsidy)

A fisheries sector scheme supporting fish farming, cold chain, hatcheries, and processing. Offers subsidies up to 40–60 percent depending on beneficiary category. Aims to boost the Blue Economy and double fisher incomes.

Example: A fisher installs an ice plant and receives 40 percent subsidy under PMMSY.

8. PMFME Scheme (Credit Linked Subsidy 35%)

Focused on micro food processing units, especially individuals and FPOs. Provides 35 percent capital subsidy for upgrading or setting up food manufacturing units. Helps small food businesses become organized and profitable.

Example: A home-based pickle maker expands into a small packaging unit using PMFME support.

9. Mudra Loan (Shishu, Kishore, Tarun)

A collateral-free loan scheme for small businesses under Shishu, Kishor, and Tarun categories (up to ₹10 lakh). Ideal for traders, manufacturers, and service providers. Comes with low interest rates and simplified processing.

Example: A mobile repair shop owner takes a ₹2 lakh Mudra loan to buy new equipment.

Women borrowers get 3 percent concession.

10. Stand Up India (Up to ₹1 Cr, 100 percent Collateral-Free)

A loan scheme for SC/ST and women entrepreneurs to start greenfield enterprises. Offers loans between ₹10 lakh to ₹1 crore with credit guarantee support. Encourages inclusivity and first-time business ownership.

Example: A woman entrepreneur opens a small manufacturing unit using a ₹25 lakh Stand Up India loan.

Types of Loan Subsidies in India 2026

Why Choosing the Highest Subsidy Loan Matters

• Reduces long-term financial burden
• Lowers EMI
• Helps start a business with minimum investment
• Faster loan repayment
• Improved cash flow
• Ideal for first-generation entrepreneurs

Conclusion

Government subsidy schemes can significantly lower your financial pressure by reducing the loan’s principal or interest. However, each scheme has its own eligibility, documentation, and rules. Before applying, carefully evaluate the scheme, loan amount, repayment terms, and the subsidy percentage.

If you need guidance on selecting the best loan subsidy scheme for your business or financial goals, InvestKraft can help you with expert support.

FAQs

1. Which subsidy loan is highest in India?

PMEGP and NLM offer up to 35–50 percent subsidy, making them among the highest.

2. What is the best subsidy loan for business?

PMEGP, AIF, PMFME, NHB, and NLM are top choices.

3. Can I get multiple subsidy loans simultaneously?

No. Most schemes allow only one subsidy per borrower per project.

4. What is a subsidized loan?

A loan where the government pays part of interest or principal.

5. Is there subsidy on home loans in 2026?

Yes, under PMAY 2.0.

Author: Diwakar Kumar Singh

Diwakar Kumar Singh is a certified SEO content writer and finance specialist with 7+ years of experience in the BFSI industry. He has written 1,000+ finance articles, published books across seven countries and authored research papers.

In 2018, he was awarded a Gold Medal in Marketing and Finance from IMT Hyderabad. He combines analytical strength with clear communication. Diwakar simplifies complex financial concepts, decodes unlisted shares, analyses IPOs, ratios and company profiles and delivers evidence-backed insights that help investors make informed decisions. communication.

 

Beyond finance, Diwakar is a dedicated fitness enthusiast and the founder of TheFitnessJournal. He also holds a nutrition certification from ISSA, USA, and writes about health, nutrition and science-backed wellness in a simple and approachable style. His ability to excel in two demanding fields makes him a versatile creator committed to clarity, accuracy and meaningful impact.