How to Get Education Loan with Low CIBIL Score?

    Updated on: 10 Oct 2023 13 min read

    Securing loans for education abroad has been labeled as the most difficult part of the process by students, primarily due to a lack of knowledge, awareness, and exposure in the financial aspect. While students are well-prepared in areas like scores, letters of recommendation, and statements of purpose, they often lack guidance when it comes to the financial aspects. This leads to uncertainty and mistakes in loan applications, resulting in rejections. To avoid this, thorough research is crucial before applying for a loan.

     

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    Frequently asked questions

    How long is a CIBIL score report valid?

    The Credit Information Report (CIR) containing an individual’s credits and defaults is kept for a minimum of 7 years from the date of the first late report.

    What does ‘NH’ or ‘NA’ mean in the CIBIL score?

    ‘NH’ and ‘NA’ mean:

    That you do not have any credit history, that is you are new to the system.

    • You do not have any credit activity in the last couple of years.
    • You have all add-on credit cards and have no credit exposure.

    What is the credit utilization ratio?

    It is a ratio that represents your spending to your income. For example, you utilize only Rs. 1000 of your credit limit of Rs. 2000. This means that your credit utilization is 50%. It is better to keep a low credit utilization ratio.

    Does a loan rejection affect the CIBIL score?

    Every lender checks the CIBIL score when a loan application is submitted. When a credit institution or a bank makes an inquiry, it is called a hard inquiry. A hard inquiry is bound to lower your CIBIL score and that is why you should avoid submitting multiple loan applications.

    Does checking CIBIL score affect CIBIL score?

    No, checking the CIBIL score after the CIBIL score does not affect your CIBIL score. 

    Checking your own CIBIL score, known as a "soft inquiry," does not have a negative impact on your credit score. However, when a lender or credit card issuer requests CIBIL to review your credit report, typically during loan or credit card applications, it is considered a "hard inquiry" and may affect your credit score.

    How much CIBIL score is required for an education loan?

    A minimum of 650 CIBIL score is required for an education loan.

    Can CIBIL change or delete my records?

    The credit score reflected on your CIR cannot be changed or deleted by any institution.



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Written by Ananya Ghai

A post-graduate with over three years of expertise in the education abroad industry, Ananya has a knack for writing blogs. Previously, she has worked as an IELTS trainer and SOP writer. A passionate writer and a literature geek, describe her perfectly.


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Reviewed by Aman Jain

Aman Jain graduated from IIT Kanpur, and currently functions as the CMO at GyanDhan. He is deeply passionate about creating equality in higher education and has directly interacted with 2 Lakh students in his 8-year-long journey.


Specializes in:
Education loan , Study Abroad Admissions


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GyanDhan is India's first education financing marketplace.



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