6% Interest Subsidy on Vehicle Purchase Loans in Gujarat

Overview

The Gujarat government provides a 6% interest subsidy on loans taken from banks for vehicle purchase by eligible individuals. This scheme makes owning a vehicle more affordable for marginalised communities who depend on vehicles for their livelihood or self-employment.

Objective

The scheme reduces the effective cost of borrowing for vehicle purchases, enabling more people from lower-income groups to access transport for earning a living. It supports financial inclusion and self-employment in the transport sector.

Benefits

• 6% interest subsidy on eligible vehicle purchase loans
• Applicable to loans from scheduled commercial banks and cooperative banks
• Reduces the effective EMI burden on the borrower
• Subsidy credited directly to the loan account

Eligibility

• Must be a permanent resident of Gujarat
• Must belong to an eligible community as specified by the implementing corporation
• Vehicle must be purchased for self-employment or livelihood purposes
• Loan must be sanctioned by an approved bank
• Annual family income must be within the prescribed limit

Exclusions

• Vehicles purchased for purely personal use are not covered
• Loan accounts that are in default or classified as non-performing assets
• Applicants who have already received an interest subsidy under another government scheme for the same vehicle
• Vehicle loans from non-approved or informal lenders

Application Process

1. Take a vehicle purchase loan from an approved bank
2. Collect the loan sanction letter and vehicle registration documents
3. Apply to the relevant state corporation with the subsidy application form
4. Submit the form along with bank loan and vehicle documents
5. The corporation verifies the application and transfers the subsidy
6. Subsidy is credited annually to the loan account until the loan is repaid

Documents Required

• Loan sanction letter from the bank
• Vehicle registration certificate
• Aadhaar card and Gujarat domicile certificate
• Community or caste certificate if applicable
• Income certificate
• Bank account passbook copy