Top Loan Schemes with Highest Subsidies in India 2025

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Jul 1st 2025

Personal Loan

If you want to maximise your savings on loans with the highest subsidy, then this article is for you. We will discuss in detail various government-backed loan schemes, especially with the higher subsidy amounts. Whether you are an aspiring entrepreneur, a first-time homebuyer or need financial support for education or agriculture, this article is your ultimate guide to securing the biggest loan subsidy in India.

Loan Subsidy Meaning in India

Subsidy loans (or loan subsidies) provide financial assistance by covering a portion of the loan interest or principal, thereby reducing the cost for the borrower. The following are the benefits of loan subsidies:

For low-income individuals, farmers, small businesses and students, getting loans is more accessible and affordable.
Also helps in promoting entrepreneurship and business growth, advancement in agriculture and other benefits

Top 20 Loans with the Highest Subsidies in India 2025

Presented below is the list of top loans with the highest subsidies in India

Scheme Name	Loan Amount	Subsidy	Eligibility	Key Features
Pradhan Mantri Mudra Yojana (PMMY)	Up to INR 10 Lakh	No collateral required	Micro and small businesses, startups, and self-employed individuals	• Collateral-free loans
				• Loans classified into Shishu (up to INR 50,000), Kishore (INR 50,001 to INR 5 Lakh), and Tarun (INR 5 Lakh to INR 10 Lakh) categories
				• 3% interest rate discount for women borrowers
Credit Linked Capital Subsidy Scheme (CLCSS)	Up to 15% of capital investment, max INR 15 Lakh	15% upfront capital subsidy	MSMEs looking to upgrade technology	• Encourages technology upgradation in MSMEs
				• Reduces capital investment costs
				• Improves product quality and productivity
Coir Udyami Yojana (CUY)	Up to INR 10 Lakh + working capital (max 25% of project cost)	40% subsidy, 55% loan, 5% beneficiary contribution	Individuals, NGOs, SHGs, registered societies, trusts, and JLGs in the coir industry	• Promotes sustainable development of the coir industry
				• Covers project cost for setting up coir manufacturing units
				• Collateral-free loans available
Stand Up India Scheme	INR 10 Lakh to INR 1 Crore	No explicit subsidy, but the loan is collateral-free	SC/ST and/or women entrepreneurs setting up greenfield enterprises	• Facilitates bank loans for setting up greenfield enterprises
				• Promotes entrepreneurship among underrepresented sections
				• Covers manufacturing, services, or the trading sector
Sustainable Finance Scheme by SIDBI	INR 10 Lakh to INR 25 Crore	No explicit subsidy, but concessional interest rates	MSMEs focusing on energy efficiency and cleaner production	• Provides financing for projects related to energy efficiency and cleaner production
				• Helps MSMEs adopt sustainable practices
				• Offers long-term financing up to 10 years
Pradhan Mantri Gramin Bhandaran Yojana (PMGBY)	Up to INR 2 Lakh	50% subsidy	Farmers, SHGs, and cooperatives	• Promotes farm-level storage facilities
				• Helps in reducing post-harvest losses
				• Provides interest-free loans for setting up storage facilities
Pradhan Mantri Kisan Sampada Yojana (PMKSY)	Up to INR 10 Lakh	50% subsidy	Farmers, SHGs, and cooperatives	• Focuses on post-harvest management and value addition
				• Supports infrastructure development for food processing
				• Enhances farmers' income through better value chains
Pradhan Mantri Fasal Bima Yojana (PMFBY)	Up to INR 4 Lakh	50% subsidy	Farmers	• Provides insurance coverage for crops against natural calamities
				• Reduces financial risks for farmers
				• Covers crops like paddy, wheat, sugarcane, cotton, and others
Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)	Up to INR 10 Lakh	50% subsidy	Farmers, SHGs, and cooperatives	• Focuses on irrigation and water conservation
				• Supports infrastructure development for water management
				• Enhances agricultural productivity and sustainability
Pradhan Mantri Matsya Sampada Yojana (PMMSY)	Up to INR 10 Lakh	50% subsidy	Fishermen, SHGs, and cooperatives	• Promotes sustainable fishing practices
				• Supports infrastructure development for the fishery sector
				• Enhances fish production and income for fishermen
Pradhan Mantri Awas Yojana (PMAY)	Up to INR 6 Lakh	Interest subsidy of up to 6.5%	Economically weaker sections and low-income groups	• Provides affordable housing for the urban poor
				• Reduces financial burden through interest subsidy
				• Promotes housing for all by 2022
Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)	Up to INR 1.5 Lakh	100% placement-linked skilling program	Rural youth from poor families	• Focuses on skill development and job placement
				• Provides free skill training and post-placement support
				• Empowers rural youth to secure sustainable livelihoods
Pradhan Mantri Rojgar Protsahan Yojana (PMRPY)	Not applicable	Employer's contribution to EPF (12% of wages)	Employers in the MSME sector	• Encourages job creation in the MSME sector
				• Reduces the financial burden on employers
				• Promotes formalization of the workforce
Pradhan Mantri Vaya Vandana Yojana (PMVVY)	Up to INR 15 Lakh	8% guaranteed return	Senior citizens aged 60 years and above	• Provides a guaranteed return on investment
				• Ensures regular income for senior citizens
				• Offers tax benefits on the investment
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)	Up to INR 2 Lakh	INR 330 annual premium subsidized by the government	Individuals aged 18-50 years	• Provides life insurance coverage at a nominal premium
				• Ensures financial security for the family in case of death
				• Promotes financial inclusion and risk mitigation
Pradhan Mantri Suraksha Bima Yojana (PMSBY)	Up to INR 2 Lakh	INR 12 annual premium subsidized by the government	Individuals aged 18-70 years	• Provides accidental death and disability coverage
				• Ensures financial security in case of unforeseen accidents
				• Promotes financial inclusion and risk mitigation
Pradhan Mantri Jan Dhan Yojana (PMJDY)	Not applicable	No explicit subsidy, but provides access to banking services	Individuals without a bank account	• Ensures access to basic banking services
				• Promotes financial inclusion and access to credit
				• Provides overdraft facility, accident insurance, and more
Pradhan Mantri Kisan Maan-Dhan Yojana (PM-KMY)	Not applicable	INR 2,000 per year pension contribution subsidized by the government	Small and marginal farmers aged 18-40 years	• Provides a minimum assured pension of INR 3,000 per month
				• Ensures financial security for small and marginal farmers
				• Encourages enrolment and participation in the scheme
Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM)	Not applicable	INR 1,000 per year pension contribution subsidized by the government	Unorganized sector workers aged 18-40 years	• Provides a minimum assured pension of INR 3,000 per month
				• Ensures financial security for unorganized sector workers
				• Promotes social security and welfare of the workforce
Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)	Not applicable	INR 6,000 per year direct cash transfer	Small and marginal farmers	• Provides income support to farmers
				• Helps in addressing agricultural distress
				• Enhances the purchasing power of farmers

What are the Different Types of Loan Subsidies Available in India?

The following are the different types of loan subsidies available in India. Each of these loan subsidies are available for various sectors and categories of borrowers:

Credit-Linked Subsidy Scheme (CLCSS)

This scheme helps small businesses get loans at lower interest rates. The aim is to support SMEs in upgrading their technology and improving productivity. The subsidy amount is linked to your loan, thus making borrowing cheaper.

Capital Subsidy Schemes

These are one-time financial aids to help start or grow a business. They can cover setup costs, equipment, or technology. The following are some of the examples:

Stand-Up India: Loans from INR 10 lakh to INR 1 crore for women and SC/ST entrepreneurs.
Coir Udyami Yojana: Helps set up coir-based units with support up to INR 10 lakh.

Interest Subsidy Schemes

These reduce the interest rate on loans, making borrowing more affordable. The following is one of the example:

Capital and Interest Subsidy for MSMEs: For businesses in manufacturing and services.

Rent Subsidy Schemes

As the name describes, these subsidy schemes help you with rent costs for your business premises.

Margin Money Schemes

These schemes help cover the initial investment needed to start a business. The following is an example of margin money scheme:

Seed Money Scheme: Offers funds to unemployed individuals to start their own ventures.

Credit Guarantee Schemes

These schemes give a loan guarantee to banks, so they feel safer lending to small businesses, even those with no collateral (unsecured loans)

Marketing Assistance Schemes

These schemes help businesses promote their products or services. The following is an example of marketing assistance scheme:

NSIC Subsidy: Offers support for marketing, tech upgrades, buying raw materials, and more.

Employment Subsidy Schemes

These help businesses that create jobs, especially in labour-heavy sectors.

Education Subsidies

These provide financial help to students pursuing higher education. Support is available through scholarships, education loans, and grants.

Export Subsidies

Exporters can get financial support through schemes that make it easier to manage business costs and help in international sales.

Why Is It Important to Choose the Right Loan with the Highest Subsidy?

The following are the main reasons why the highest subsidy for a loan is important for your financials:

Direct Impact on Repayment: Subsidies have a direct impact on loan repayment by decreasing the interest owed, resulting in lower monthly payments and a reduced overall repayment amount throughout the loan term.
Long-Term Financial Benefits: With subsidies, the long-term financial benefits are immense for large loans, as savings are substantially increased.
Faster Debt Clearance: With part of your debt being absorbed by the government, there is a reduction in your EMIs tenure, and thus, you can repay your debt faster.
Increased Financial Flexibility: With substantial savings from subsidies, you can make extra lump sum payments, thus giving you greater financial flexibility.
Reduced Interest Burden: Paying off your loan early can lead to considerable savings in interest payments over your loan tenure. It is a smart financial move that can help you free up more money for other important expenses or investments.
Access to Benefits: Many governments provide various subsidies and incentives for specific loan types, such as home loans and education loans. If you meet their eligibility criteria, then you can save a lot.

Conclusion

When you are planning to take a loan, always explore various government subsidies available, as they can help immensely benefit you. The first and most important reason is long term savings, as government subsidy schemes absorb a considerable amount of your debt, and thus relieving your financial pressure. However, there are certain terms and conditions associated with these schemes and we recommend that you go through with these terms and conditions before applying for subsidy. In case you want to know more or have any queries, we at InvestKraft can help you.