The collateral free loan most customers never hear about

A homeowner hears Rs 1,80,000 and stops listening. The same homeowner hears Rs 1,200 a month against an electricity bill of Rs 2,400 and starts asking questions.

Both describe the same 3 kW system. One of them closes.

The financing under PM Surya Ghar is genuinely good, it has been available for two years, and a surprising share of residential enquiries still get quoted as a lump sum with the loan mentioned as an afterthought at the end of the conversation.

What the loan actually offers

The terms are standardised across public sector banks, so you can learn them once. Taking Canara Bank's published product as a representative example:

• No collateral. The security is hypothecation of the solar equipment itself.
• Up to Rs 2 lakh including the government subsidy, for systems up to 3 kW. Above that, up to Rs 6 lakh on different terms.
• Repayment up to ten years.
• A repayment holiday of up to six months from first disbursement, which covers installation, commissioning and the wait for the subsidy.
• Margin of 10 percent of project cost for loans up to Rs 2 lakh, and 20 percent above it.
• Applicant aged 18 to 75, with a credit score around 680 or above.

That six month holiday is the part worth understanding. It exists so the borrower does not pay an instalment on a system that is not yet generating. Used properly, the customer's first EMI arrives after the first reduced bill.

Why you should not quote an interest rate

Rates on this product are linked to the banks' repo based lending rates and have moved several times. Reported figures in 2026 have ranged from around 5.75 percent at the scheme's reference level to well over 7 percent at individual banks, and rates above Rs 2 lakh are higher again.

So do not print a rate on your proposal. Print the mechanism and the range, then show the EMI at the rate the customer's own bank is quoting this week. An EPC caught quoting a stale rate loses the argument about everything else on the page.

For scale, on a ten year tenure:

• Rs 1.5 lakh at 5.75 percent is about Rs 1,650 a month. At 7 percent it is about Rs 1,740.
• Rs 2 lakh at 5.75 percent is about Rs 2,200 a month. At 7 percent it is about Rs 2,320.

The subsidy prepayment nobody explains

Here is the move that turns a good EMI into a very good one, and most customers have never had it explained.

The central subsidy lands in the customer's bank account after commissioning. If it goes straight into the loan as a part prepayment, the outstanding principal drops sharply and the instalment falls with it.

Take a 3 kW system at Rs 1.8 lakh financed in full. Once a Rs 78,000 subsidy is prepaid, the balance is about Rs 1.02 lakh, and the instalment over the remaining tenure is roughly Rs 1,120 a month at 5.75 percent or Rs 1,184 at 7 percent.

Against a household bill of Rs 2,000 to Rs 2,500, that is the entire sale, and it is a sale you can only make if you walk the customer through the sequence: loan, install, commission, subsidy, prepay, lower EMI.

What actually stalls the file

Four things, in rough order of how often they happen:

1. The electricity bill is not in the applicant's name. It is in a parent's name, or a deceased relative's. This is the single most common stall and it is solvable, but not in the week the customer wants to install.
2. Rooftop rights are unclear, usually in a jointly owned family property or an apartment.
3. Credit score below the bank's floor, where the answer may be a co-applicant.
4. Income documentation for the larger loans above Rs 2 lakh, where most banks apply an income criterion that the smaller loan does not.

Ask about the first two at the site visit, not at the bank. It costs one question and saves a fortnight.

Who this is wrong for

Financing is not automatically the right pitch. A customer with the cash and an aversion to debt should simply be quoted the system. A household consuming under about 150 units a month may struggle to make either the loan or the system worthwhile, and telling them so honestly earns more referrals than a forced sale does.

There is also a queue worth knowing about: as of the August 2026 figures, loans had been sanctioned to 21.87 lakh applicants while 17.5 lakh installations were complete. Roughly four lakh households have arranged money and no system. More on where that demand sits in 50 lakh homes done, and the subsidy mechanics themselves in the subsidy maths every EPC should know.

The short version

• Loans up to Rs 2 lakh under PM Surya Ghar need no collateral, run up to ten years and carry a repayment holiday of up to six months.
• Margin is 10 percent up to Rs 2 lakh and 20 percent above it. Applicants are 18 to 75, typically needing a credit score near 680.
• Do not print an interest rate. Rates are repo linked and have moved. Show the EMI at the customer's own bank's current rate.
• Prepaying the subsidy after commissioning cuts the instalment sharply. Walk the customer through that sequence.
• Ask whose name the electricity bill is in at the site visit. It is the most common reason a file stalls.

Sources

• PM Surya Ghar Muft Bijli Yojana solar loan product, Canara Bank
• PM Surya Ghar: Muft Bijli Yojana national portal, Government of India
• PM Surya Ghar Scheme crosses 50 lakh rooftop solar installations, DD India