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Haven’t loans made our life easier? Indeed, they have. They provide us with financial leverage that extends beyond our earnings, be it home loan, car loan, personal loan or education loan. More and more people have an option of good and quality education, which he/she may not able to afford without having to borrow money. And currently, in India, the process of taking education loan is simple and hassle-free. Most of the banks provide you with feasible interest rates on education loans provided you have a good CIBIL (credit score) rating. A person with low CIBIL score will find it difficult to avail loan for education from his/her bank.
A good CIBIL score is essential to get any loan from the bank and obtaining a loan with a low score would be a difficult task. The below-mentioned tips can help you to get a loan with low/bad CIBIL score.
Yes, your education loan can have a great effect on your CIBIL score as they are just like any loan and have to be repaid to keep up a good CIBIL score. However, the only difference here could be that it can be paid once he/she completes the course (education) and gets employment.
Also, just like other loans, education loan is also reported to CIBIL and gets reflected on your credit report. This can have a positive or a negative impact on your credit score hugely depending on your re-payment behavior. Besides, non-repayment of education loan will adversely affect your credit score.
Let us take various scenarios for CIBIL scored required to obtain an education loan.
Following are some of the other reasons for rejection of education loan:
I want to apply for an education loan but I do not have a co-signer. What do I do?
In case you do not have a co-signer, you may borrow a loan from the other resources as there are some lenders who may provide loan who do not have a co-signer.
What is the eligibility for education loan?
What are the expenses covered by education loan?
It can be used for paying the following:
Who can be my co-borrowers?
Parents/ Guardians can be co-borrowers for an applicant. Also, if the applicant is married his/her spouse can be a co-borrower.
Is there a maximum limit on an education loan that a lender can disburse?
Most of the lenders will have a limit of INR 10 – 15 lakhs for studies within India and the maximum limit can range anywhere between INR 20 -30 lakhs for foreign countries.
Does education loan reflect in the CIBIL report?
Yes, and defaulters might have to face the brunt as defaults on repayments of education loans would reflect in the borrower's CIBIL Report. This, in turn, may negatively impact his/her CIBIL score.