Why is CIBIL Score Important to Get an Education Loan
Having a good CIBIL score is crucial when applying for an education loan because it shows your creditworthiness to lenders. A high CIBIL score indicates responsible financial behaviour and gives lenders confidence in your ability to repay the loan on time. With a strong credit score, you are more likely to be approved for a higher loan amount and at a lower interest rate, ultimately making your educational aspirations more affordable.
Minimum CIBIL Score Required for an Education Loan
The minimum CIBIL score required to secure an education loan is 750 or above. Maintaining a score of 750 or higher shows lenders that you are a reliable borrower and increases your chances of getting approved for the loan.
Things You Should Keep in Mind Before Applying for an Education Loan
1. Estimate Your Funding Requirement
The very first step in applying for an education loan is to assess your funding requirement. Determine how much you need to borrow to cover your tuition fees, living expenses, and any other educational costs. By having a clear understanding of your financial needs, you can avoid borrowing more than necessary and minimise your debt burden in the long run.
2. Minimum and Maximum Funding Available
Different lenders have varying minimum and maximum loan limits for education loans. It is essential to check the funding options available from different lenders and choose one that meets your financial requirements. Ensure that the loan amount you are eligible for is sufficient to cover all your educational expenses without leaving you underfunded.
3. Rate of Interest
It is crucial to compare the interest rates offered by different lenders and choose a loan with the most competitive rate. Remember, a lower interest rate translates to lower monthly repayments and reduced interest payments over the life of the loan.
4. Requirement of Collateral
Before applying for a loan, check if the lender requires any form of security and assess if you are comfortable meeting the collateral requirements. Be sure to understand the consequences of defaulting on the loan and the potential risk to your assets.
5. Pre-payment or Foreclosure Charges
In case you want to foreclose your loan, it is essential to understand the terms and conditions related to pre-payment and foreclosure charges and factor them into your repayment strategy.
6. Repayment Tenure
When selecting an education loan, consider the repayment tenure offered by the lender. Opt for a flexible repayment schedule that aligns with your financial goals and repayment capacity.
How to Check CIBIL Score While Applying for an Education Loan
You can check your CIBIL score in 3 easy steps:
Step 1: Visit Poonawalla Fincorp’s official website.
Step 2: Click on the ‘Free CIBIL Check’ button.
Step 3: Fill in the required details and submit.
Your CIBIL score will be visible on your screen. Your CIBIL report will also be sent to your registered mobile number and email ID.
Happy Customers, Happy Us
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Frequently Asked Questions
It is a three-digit number calculated based on credit utilisation, payment history, credit history length, types of accounts, and recent credit inquiries.
Lenders prefer a credit score above 750 for education loans.
It's challenging with a low score but improving it and exploring alternative lenders are options.
Check annually and before applying for accuracy.
Improving your score takes time and discipline. There are no instant fixes, but responsible credit management can lead to gradual improvement.