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Many students need financial support to study abroad, and education loans often become essential. One key factor in getting an education loan is your CIBIL score. Understanding how much CIBIL score is required for an education loan abroad can make or break your loan application.
In this blog, you’ll know the answer to how much CIBIL score is required for an education loan abroad, why CIBIL scores matter, the minimum score you need, and simple tips to boost your chances of getting the loan.
This Blog Includes:
- What Is a CIBIL Score In Education Loans and Why Does It Matter?
- How Much CIBIL Score Is Required for an Education Loan Abroad?
- How CIBIL Score Affects Loan Terms and Approval?
- Tips to Secure an Education Loan Abroad with a Low CIBIL Score
- How to Improve Your CIBIL Score Before Applying Education Loan Abroad?
- FAQ
What Is a CIBIL Score In Education Loans and Why Does It Matter?
A CIBIL score is a three-digit number ranging from 300 to 900 that reflects your creditworthiness. It’s based on your past loan repayments, credit card usage, and overall financial behaviour. This score plays a crucial role in determining whether your education loan application gets approved.
For those seeking an education loan to study abroad, lenders use the CIBIL score to assess the risk of lending. Knowing how much a CIBIL score is required for an education loan to study abroad helps you prepare for the application process and secure favourable loan terms.
Significance of a CIBIL Score In Education Loan Abroad
By understanding the Importance of a good credit score, you can take proactive steps to meet lender expectations and strengthen your loan application. Here are a few of it:
- Importance of Loans: A higher score signals reliability, increasing the likelihood of loan approval and better interest rates.
- Relevance for Education Loans: Lenders often evaluate the co-applicant’s (e.g., parent or guardian) CIBIL score, as most students lack a credit history.
Also Read:
- Eligibility to Get an Education Loan Without Collateral in India
- Top Ways to Fix Common Education Loan Rejection Reasons
How Much CIBIL Score Is Required for an Education Loan Abroad?
When applying for an education loan to study abroad, lenders set specific CIBIL score thresholds to determine eligibility. Knowing how much a CIBIL score is required for an education loan abroad varies by lender, but general benchmarks exist to guide applicants.
These requirements often apply to the co-applicant, as students typically have no credit history.
| CIBIL Score Range | Loan Approval Likelihood | Notes |
| 750 and above | High | Qualifies for lower interest rates and higher loan amounts. |
| 700–749 | Moderate | Eligible, but may face higher education loan interest rate or stricter terms. |
| 650–699 | Low | Approval is challenging; collateral or a strong co-applicant may be required. |
| Below 650 | Very Low | High risk for lenders; rejection on education loans without co-signer. |
Other things to consider:
- General Requirement: Most lenders, including private banks and NBFCs, prefer a CIBIL score of 700 or higher for education loans abroad. Some, like HDFC Bank, may require a score of 750+ for optimal terms.
- No Credit History: If you or your co-applicant has no CIBIL score (e.g., -1 or 0), lenders may still approve the loan based on other factors like collateral or income proof.
- Lender Variations: Government banks may show flexibility with scores below 700, while NBFCs like Incred or Auxilo consider scores as low as 650 for postgraduate or professional courses.
Meeting the minimum CIBIL score threshold enhances your chances of securing an education loan with favourable terms.
Why Co-Applicant’s CIBIL Score Matters for Education Loan Abroad?
Since most students lack a credit history, lenders often evaluate the co-applicant’s CIBIL score. Understanding how much CIBIL score is required for an education loan abroad for co-applicants is crucial, as their financial profile significantly influences loan approval.
- Role of Co-Applicant: Parents, guardians, or spouses typically act as co-applicants, and their credit score determines the loan’s approval and terms.
- Impact of Low Score: A co-applicant’s score below 700 may lead to higher interest rates or the need for collateral.
- Strengthening Applications: A co-applicant with a score of 750+ can secure better loan terms, such as lower interest rates or higher loan amounts.
Choosing a co-applicant with a strong CIBIL score can significantly boost your loan application’s success.
How CIBIL Score Affects Loan Terms and Approval?
Your CIBIL score not only determines loan approval but also influences the terms of the loan. Understanding how much CIBIL score is required for an education loan abroad helps you anticipate the interest rates, loan amounts, and repayment terms you may qualify for.
- Interest Rates: A score above 750 often secures lower interest rates, reducing the overall cost of the loan.
- Loan Amount: Higher scores (750+) may qualify for loans up to INR 20–30 lakhs for international studies, while lower scores may limit amounts to INR 10–15 lakhs.
- Repayment Tenure: A strong CIBIL score can lead to flexible repayment options, including longer tenures or moratorium periods.
A higher CIBIL score opens doors to better loan terms, making your education abroad more affordable.
Tips to Secure an Education Loan Abroad with a Low CIBIL Score
A low CIBIL score can pose challenges, but it doesn’t make securing an education loan impossible. By exploring alternative strategies, you can improve your chances of approval despite a lower score.
Knowing how much a CIBIL score is required for an education loan abroad is just the starting point; these tips can help you navigate the process.
- Opt for a Secured Loan: Offer collateral like property, fixed deposits, or gold to reduce the lender’s risk and bypass strict CIBIL score requirements.
- Choose a Strong Co-Applicant: A co-applicant with a CIBIL score of 750+ can strengthen your application and improve approval chances.
- Explore Government Schemes: Programs like the Central Sector Interest Subsidy Scheme (CSIS) have relaxed credit score requirements, making loans more accessible.
- Consider NBFCs or Fintech Lenders: Lenders like Incred, Auxilo, or MPower Financing offer loans to those with scores as low as 650, focusing on factors like future earning potential.
- Provide Proof of Income: Demonstrating stable income (e.g., co-applicant’s salary) can offset a low CIBIL score by proving repayment capacity.
By leveraging these strategies, you can overcome a low CIBIL score and secure the funding needed for your international education.
How to Improve Your CIBIL Score Before Applying Education Loan Abroad?
Improving your CIBIL score can enhance your loan eligibility and secure better terms. If your score is below the threshold for much CIBIL score required for an education loan abroad, taking proactive steps can make a significant difference over time.
- Pay Bills on Time: Timely payment of credit card bills, EMIs, and utility bills boosts your score by demonstrating financial responsibility.
- Reduce Credit Utilisation: Keep credit card usage below 30% of the available limit to maintain a healthy credit utilisation ratio.
- Check Credit Report for Errors: Regularly review your CIBIL report for inaccuracies and dispute errors promptly to avoid negative impacts.
- Avoid Multiple Loan Applications: Limit hard inquiries by applying only to lenders where you meet eligibility criteria, as multiple inquiries can lower your score.
- Maintain a Healthy Credit Mix: A balanced mix of secured (e.g., home loans) and unsecured (e.g., credit cards) credit can positively influence your score.
Consistent efforts to improve your CIBIL score can lead to better loan approval odds and more favourable terms.
Also Read:
- Education Loan Process: Steps, Eligibility Criteria, & Repayment
- How Can You Get an Education Loan After 12th?
Securing an education loan to study abroad requires careful planning, and your CIBIL score plays a central role in the process. By understanding how much a CIBIL score is required for an education loan abroad. Typically CIBIL score of 700 or higher for co-applicants. You can take steps to meet lender expectations.
FAQ
Most lenders require a CIBIL score of 700 or higher for education loans to study abroad, with scores above 750 increasing approval chances and securing better interest rates. Co-applicants, such as parents, typically need this score since students often lack a credit history.
Yes, if you or your co-applicant has no CIBIL score (e.g., -1 or 0), lenders may approve the loan based on collateral, income proof, or future earning potential, especially with NBFCs or fintech lenders like Incred or MPower Financing.
A co-applicant’s CIBIL score, ideally 750 or higher, significantly boosts loan approval odds and secures favourable terms like lower interest rates or higher loan amounts, as lenders rely on their creditworthiness.
Offer collateral like property or fixed deposits, choose a co-applicant with a strong credit score, or apply to NBFCs with relaxed criteria. Improving your score by paying bills on time also helps.
Government banks, like SBI, often show flexibility with CIBIL scores below 700, especially under schemes like the Central Sector Interest Subsidy Scheme, compared to private banks that prefer scores of 750+.
Yes, a CIBIL score below 700 may lead to higher interest rates, as lenders perceive greater risk. Scores above 750 typically secure lower rates, reducing the overall loan cost.
NBFCs like Incred or Auxilo often approve education loans for scores as low as 650, focusing on factors like course type, institution reputation, or co-applicant’s income, unlike stricter bank criteria.
Visit the official CIBIL website or use platforms like Paisabazaar to check your score. Regularly reviewing your credit report for errors ensures accuracy before applying.
Collateral isn’t always mandatory, but is often required for CIBIL scores below 650 to mitigate lender risk. Secured loans may also offer higher amounts or better terms.
Improving a CIBIL score to meet the 700+ threshold can take 6–12 months with consistent actions like timely bill payments, reducing credit utilisation, and correcting report errors.
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