How Much Education Loan Can I Get
How Much Education Loan Can I Get
Blog Article
Does the approved loan amount depend on your CIBIL score?
Introduction
How Much Education Loan Can I Get? In India, the majority of students concentrate on their academic records and acceptance letters while submitting an application for an education loan. The CIBIL score, particularly that of the co-applicant (often a parent or guardian), is an important but frequently disregarded component. The credit history of students may be lacking, but banks and NBFCs heavily rely on the CIBIL score of the co-borrower to determine not just loan approval, but also the amount they are willing to sanction.
What Is a CIBIL Score?
CIBIL (Credit Information Bureau India Limited) How Much Education Loan Can I Get score is a three-digit number between 300 and 900 that indicates a person’s creditworthiness. It is based on their repayment history for loans, credit cards, and other financial commitments.
- 750 and above: Excellent
- 700–749: Good
- 650–699: Average
- Below 650: Poor
Banks consider a high CIBIL score as low risk, which means higher chances of loan approval and better loan terms.
How CIBIL Score Affects Education Loan Amount
| CIBIL Score Range (Co-applicant) | Impact on Loan Sanction |
| 750+ | Eligible for higher loan amounts, better interest rates, and minimal documentation |
| 700–749 | Good approval chances, moderate loan limit |
| 650–699 | Limited approval, lower loan amount, higher interest |
| Below 650 | High rejection risk; strict collateral required |
Key Points:
- Unless the co-applicant has a solid credit history, public sector institutions such as SBI and Canara Bank often do not approve unsecured loans over ₹7.5 lakh.
- Loans for mediocre ratings may still be approved by NBFCs like HDFC Credila and Avanse, but only under more stringent conditions or with more supporting documents.
- Poor credit might lower the amount of a loan that is eligible or cause processing to be delayed, even in cases when security is provided.
Why Credit Scores Are Important to Lenders
- Trust and the ability to repay are the only criteria for education loans, particularly those without collateral.
- Lenders are reassured by a high credit score that the co-applicant is responsible with money and would make timely repayments of EMIs following the moratorium period.
- Additionally, past defaults, missed EMIs, or excessively leveraged financial profiles are indicators of trouble for loan officers and are reflected in credit history.
How to Increase Your Prospects
- Prior to applying, find out your co-applicant's CIBIL score.
- Pay off outstanding debts or EMIs to raise your credit score.
- Reach out to NBFCs that consider future earnings potential in addition to credit history.
Example of a Real Scenario
- The father of Student A makes ₹70,000 a month and has a CIBIL score of 780.
Can easily obtain a loan from a major bank for ₹20–₹30 lakh without collateral.
- The parent of student B earns a comparable amount of money and has a CIBIL score of 620.
The bank requires complete collateral coverage or limits the loan to ₹5–₹7 lakh. It might be necessary to contact NBFCs with accommodating underwriting guidelines.
Conclusion
How Much Education Loan Can I Getin 2025? The CIBIL score is still a key determinant of whether an education loan is approved or denied.loan amount, terms of repayment, and interest rate. Banks use the co-applicant's credit background to gauge financial risk, even if students may not have a score. Report this page