CIBIL Scores for Education Loan: Know Everything
Why is CIBIL Score Important for Education Loans?
- Loan eligibility: A minimum CIBIL score of 700 is required for education loan approval, especially for studying abroad.
- Interest rates: Higher CIBIL scores lead to lower interest rates, while lower scores increase interest rates.
- Future credit benefits: A good CIBIL score helps in getting higher credit limits and future loans.
Minimum CIBIL Score for Education Loans
For both domestic and international education loans, a cosigner should have a minimum CIBIL score of 700. Students without financial history can still apply with eligible cosigners.
How Does CIBIL Score Impact Education Loans?
| CIBIL Score Range | Education Loan Availability |
|---|---|
| 300 – 650 | Poor CIBIL score. Difficult to get an education loan. |
| 651 – 750 | Eligible for an education loan. |
| 750 – 900 | Excellent CIBIL score. Easy to get an education loan. |
Does Education Loan Debt Affect Your CIBIL Score?
Yes, repayment impacts your CIBIL score. Timely payments increase it, while missed payments decrease it, affecting future financial transactions.
CIBIL Score of the Parents VS Education Loans
- Cosigners with a low CIBIL score may face rejection.
- Students without a CIBIL score can apply with a cosigner having a minimum score of 700.
How to Improve Low CIBIL Scores?
- Limited credit card use: Keep usage between 30%-50%.
- Manage repayments: Pay existing EMIs on time.
- Avoid frequent loan applications: Every rejection lowers your score.
Tips to Get an Education Loan with Low CIBIL Scores
- Pay bills on time.
- Consider a secured loan with collateral.
- Provide proof of income.
- Check and correct credit report errors.
- Show academic merit for better loan terms.
Conclusion
CIBIL scores play a crucial role in education loans. Ensure your cosigner has a good score for a smooth loan process.
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