Is CIBIL Score Required For Education Loan

Lenders will consider your CIBIL score when evaluating your application for education loans, just like they would with any other loan. To determine your ability to repay your student loan, lenders look at your creditworthiness.

Does Education Loan Require CIBIL Score?

The CIBIL score is one of the primary screening factors for lenders to check the applicant's creditworthiness. The importance of this score is higher in the case of an unsecured loan such as an education loan. 

This is because unsecured loans do not have any collaterals like secured loans and therefore, are riskier for lenders.

A high CIBIL score, while clearing other eligibility criteria set by the lender, can help a student get a loan with the following features:

What is The Minimum CIBIL Score Required for An Education Loan?

For education loans, parents or guardians often act as co-applicants and banks consider their credit scores along with the student’s to approve the education loan. 

In most cases, the student applying for the loan will not have any credit history or credit score. Hence, the credit score of the parent or guardian, who is the co-applicant, plays a significant role in education loan approval.

 The credit score required by banks and financial institutions for education loans varies from one lender to another. 

Usually, certain public sector banks require loan applicants to have a minimum credit score of 650 and above. Whereas private banks may 

require the applicants to have a credit score of 700 and above to be eligible for education loans.

Every lender, regardless of the sector, considers a credit score of 750 and above to be good and creditworthy. A higher credit score also guarantees the applicants an immediate and hassle-free education loan to pursue higher education.

Do Education Loans Impact CIBIL Scores?

Yes. Education loans are credit and they will have an impact on your credit score as well as the score of your co-applicant, just like any other loan. 

The consistency of your repayment and your repayment behavior will either improve or reduce your credit score. Additionally, just like other loans, student loans are reported to CIBIL and appear on your credit report. 

The only difference is, education loans offer a Moratorium period, so the student can start repaying the loan after completing his/her education and securing a job. Be aware of your Moratorium period, and start repaying your education loan to avoid extra charges on your loans. 

Conclusion

Banks and NBFCs consider CIBIL scores while approving education loans. In the case of education loans, the credit scores of the applicant(student), and the co-applicant(parent or guardian) matter. A good CIBIL score is required to get a higher education loan. And, repaying your education loan in time leads to a higher CIBIL score.

CIBIL Score for Education Loan - FAQs

The maximum loan amount that can be granted to any individual depends on the bank's policies and the eligibility requirements that the applicant has satisfied.

Yes. You can opt for a co-applicant with a good CIBIL to avail an education loan.

Education loans, similar to other loans, require a good CIBIL score of 700 and above. Some banks and NBFCs also provide education loans for low CIBIL scores.

Yes. Your education loan is a form of credit so your CIBIL score will be impacted based on your repayment behavior.

Was this information useful?

300 characters allowed (alphanumeric and special characters such as comma, full stop, @, ", &)

Thank you. Your feedback is important to us.

What’s my credit score?

+91

An OTP will be sent for verification