Why is CIBIL Score Important for an Overseas Education Loan?
Higher education from a renowned abroad institute is often considered an important steppingstone, leading the way to a successful career. However, the cost of education is increasing expeditiously. Though education loans for abroad studies seems like a great option for parents and students who may be short on funds. Given the strengthening of the dollar against the rupee, an education abroad has become phenomenally expensive as well. Just like in any other loan application, CIBIL score is taken into consideration while reviewing education loan applications. Lenders check your creditworthiness to assess your capability to repay the loan.
CIBIL or Credit Information Bureau (India) Ltd is the authorized agency that provides credit records and scores to banks and money lenders to help them assess if a borrower would be able to repay the loan. All your credit information is provided to CIBIL by banks or the lenders on a monthly basis. This includes information on your EMI and credit card payments (including any late or missed payments), balance outstanding, any change in your total credit limit, and all other details relevant to your credit profile. CIBIL makes a summary of all your credit history in the form of a three-digit number which ranges between 300-900. A high score indicates you are a less risky borrower which increases your chances of availing a loan whereas a low score decreases your probability of getting a loan. Its always better to keep a tab on your CIBIL Score by checking it on an yearly basis.
1. 0-1– If your score is 0 then it just means that you have no credit history created via a credit card or loans.
2. 300-600 – A score below 600 is considered very low. It means you have been defaulting on payments. Your chances of getting a loan with such a low score are next to impossible. Try to improve your credit score before applying to any bank as a bank rejection would further decrease the score.
3. 600-750 – A score less than 750 is not considered very good but you are on the right path. You will not face any problem while getting the loans or credit cards issued. Money lenders would easily sanction your loan. But it will be solely based on your repayment ability, such as your employment, salary, if you have any other loan going etc. Make sure you approach the right bank/NBFC to save yourself from a rejection
4. 750 and above – Congratulations! Your CIBIL score would create no hindrance in obtaining an education loan. Having a score higher than 750 means you have been good with finances. Now it’s the right time to approach the Best Bank for Overseas Education Loan and reap the fruit of regular payments.
There are other advantages of a having a high score:
• the approval process will be faster
• the interest rate could be negotiated since you are the customer no bank wants to lose
Avoid approaching public banks if your score is lower than 600. Each inquiry for availing a loan will influence your CIBIL score. The chances of getting a loan from a public bank with a less credit score is very less so there is no point in inquiring anyway. But don’t worry, there are certain NBFCs that can give you a loan with a credit score of 600-650. It would be better if you have a genuine reason to state to the lenders. It might help you in getting a slightly better rate of interest.
You should always check your CIBIL score before approaching any financial institute. Since each inquiry affects your score, going to multiple banks or NBFCs is not the best option, but how will you compare different banks and get the best ROI? Don’t worry just visit any Education Loan Consultants and avail complete assistance for overseas education loan process and make your dream to study abroad come true.
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