When you apply for any loan in India, your CIBIL Score is taken into consideration to determine if you are the right candidate or not. Just like any other loan that you apply, CIBIL Score is also considered for the personal loan for higher education.
Your CIBIL Score is the first parameter that a lender checks while reviewing your education loan application. CIBIL Score becomes even more important because the personal loan for higher education is unsecured. It means that you won’t need to submit any security for availing of the loan.
If you have a robust Credit Score along with a clean repayment and employment history, then you can get it easily. Hence, the significance of the Credit Score in the approval of the education loan becomes vital.
You can go through this post to unveil a quick guide to CIBIL Score for education loan. Continue reading!
Let’s begin with the understanding of what CIBIL is.
CIBIL or Credit Information Bureau (India) Limited is the authorized agency that provides CIBIL Scores and credit records to banks and other lenders.
It is done to help them analyze if a prospective borrower can repay the loan or not. The credit information of customers is provided to CIBIL on a monthly basis.
It has the information related to credit card payment and EMIs, which also includes missed and late payments, outstanding balance, credit limit change and other credit details.
CIBIL then summarizes all the mentioned details and releases a 3 digit number ranging between 300 and 900.
If you have a higher CIBIL Score, it is an indication that you are not a risky borrower, and lenders can rely on you to award loans.
On the other hand, if you have a poor Credit Score, then it lessens the probability of getting a personal loan for higher education approval.
Let’s have a look at the summary of creditworthiness for personal education loan and others based on your CIBIL Score:
- A Score Between 300-599 – If you have a Credit Score of 600 or below, then it is considered very low. You don’t have much of a chance in getting the education loan and any other loan approval with such a score. You will need to boost your CIBIL Score before applying to any lender as a rejection would further plunge it. You can do that by paying off your loan EMIs and credit card outstanding on time.
- A 600-749 Score – If you have a score lower than 750, then it is not considered good. But, some lenders who may indulge in taking risks may grant the loan approval. But, the personal loan interest rate charged by lenders may be on the higher side to cover the risks. You should ensure to approach the right bank and NBFC to avoid rejections.
- 750 and Above Score – It is the score that lenders consider fit to sanction the personal loan for higher education and any other at a lower rate. A CIBIL Score of 750 and more won’t be an issue in availing of an education loan easily. The approval process will be faster; you would be able to negotiate the personal loan interest rate because a bank won’t like to lose a customer like you.
You are now well-versed with the information on how can CIBIL Score impact your personal loan for higher education eligibility. You can check your Credit Score today and then apply for the personal education loan.
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