Is BSCC Loan Interest-Free?
No, the loan under BSCC Credit Card Scheme is not completely interest-free. However, the interest is not the same for all the categories. Here is more.
The BSCC Loan is not interest-free. However, the Bihar Student Credit Card (BSCC) does provide loans at very low interest rates to PWDs (Persons with Disabilities), females and transgender people. The interest under this initiative is with a baseline of 4% per annum and varies from 1% to 4%. Students do not have to repay the loan while they are pursuing the Bihar Student Credit Card Courses. They can repay it after one year of course completion or five years from the date of loan disbursement, whichever comes early. Scroll down and explore more!
Interest Rates Under BSCC Loan Scheme
The interest rates applied within the BSCC Loan vary based on the gender and the classification of the applicant. The Bihar government has presented a subsidized interest rate model, lightening the financial burden for particular groups of students. Here is a clearer explanation:
- Interest Rates for Female Students
Under the BSCC initiative, female students benefit from a lower interest rate of 1% annually due to the government's commitment to progress in women’s education. These subsidized rates improve the chances of women pursuing higher education.
- Interest Rates for Male Students
Male students pay a regular interest rate of 4% annually on their BSCC loans. Nevertheless, this interest rate is much lower than that of typical educational loans provided by banks or private lenders, as this government scheme provides subsidies in interest rates to enhance the affordability of higher education.
- Interest Rates for Differently-abled Students
Students with disability are categorized under persons with Disabilities (PwDs) also receive a subsidized interest rate of 1% annually, making education more accessible. The lower interest rates for them are notably advantageous, reducing the financial strain on PwD students.
- Interest Rates for Transgender Students
Transgender students are also equipped for lower interest rates of 1% annually within the BSCC scheme. The BSCC program aims to promote opportunities for higher education for transgender people, fostering inclusivity and equality of opportunity for them in the educational field.
Also Read: Loan Amount & Repayment Terms for BSCC
Why is the BSCC Loan Not Completely Interest-free?
Several students mistakenly suppose that the loan under BSCC is entirely interest-free, but that is not true. Although the Bihar government offers significant subsidies and very low interest rates, the applicant must know that the loan is not interest-free due to several reasons:
- To sustain the initiative;
The government must ensure that the scheme remains financially viable for future participants. Charging the minimum possible interest rate helps them maintain the scheme’s long-term sustainability.
- Administrative and Processing Costs
Banks seek expenses related to loan disbursement, processing, and management. A small amount from interest rates helps them cover these expenses.
- To encourage responsible re-payment of the loan
By imposing some interest, the government ensures that students are reliable and taking their repayment seriously, preventing defaults and helping maintain the integrity of the program.
Also Read: How to Submit BSCC Application?
The lower interest rates may encourage more women to pursue higher education. Students with disabilities typically face additional educational expenses due to their accessibility needs, such as assistive devices, medical assistance, transportation support, etc. The government’s motive behind lowering interest by 1% annually for differently-abled students is to help them complete their studies without getting burdened financially. In our societies, transgender students are more likely to face discrimination or economic hardships. Lower interest rates of 1% annually act as an aid to help them finish their education without financial pressures.
By introducing the Bihar Student Credit Card (BSCC) scheme, the Bihar government has taken a remarkable step toward increasing educational prospects for the youth of Bihar and increasing their chances of securing better employment and living a bright future. Through this program, students can obtain academic financial assistance via loans of up to 4 lakh INR at lowered interest rates. Although these loans provided to the applicants are not completely interest-free, they still get it at a very discounted rate of interest, which makes it way easier for Bihar’s youth to obtain higher education, manage education costs, and avail educational resources with loans at minimum interest rates. There are further relaxations for certain disadvantaged categories for their upliftment. Loan repayment is not made interest-free so that the government can sustain the scheme for longer duration; it also helps them incur bank charges and, lastly and most importantly, encourages students to be responsible and serious about the scheme.
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FAQs
Can a student repay the BSCC loan before the due period to reduce interest costs?
Yes, students can repay their BSCC loans before the scheduled repayment period without any prepayment penalty. In fact, repaying the loan early can help reduce the overall interest burden.
How does the BSCC loan compare to private bank education loans in terms of interest rates?
BSCC loans are significantly lower than traditional bank loans. Most private banks offer education loans with interest rates ranging from 8% to 12% per annum, and even government banks usually charge around 6% to 9% per annum. In contrast, BSCC loans have a fixed simple interest rate of just 4% for general students and 1% for specific categories, making them a much more affordable option.
When does the interest start accruing on the BSCC loan?
The interest on the BSCC loan starts accruing only after the student completes their course and secures a job. This means students do not have to worry about paying interest while studying.
Is the Bihar Student Credit Card (BSCC) loan completely interest-free?
No, the Bihar Student Credit Card (BSCC) loan is not completely interest-free. However, the scheme offers loans at highly subsidized interest rates.