Are you planning on taking an overseas education loan? Well, if your answer is a yes, then make sure that you have complete knowledge about the CIBIL score. The CIBIL Score is one of the important and required factors for taking any kind of loan, this includes education loans as well.
To have a smooth and easy loan processing, the loan applicant’s CIBIL score should be good. A high CIBIL score will get your overseas education loan approved and processed quickly. It will also grant you a loan at a low-interest rate.
So, without any further ado, let’s discuss the concept of the CIBIL score in detail. This article will come in handy for your education loan for higher studies abroad.
CIBIL Score Explained
The Credit Information Bureau (India) Limited (CIBIL) is a credit information company licensed by the Reserve Bank of India. This company summarises the credit history of the person in the form of a CIBIL report. The Credit or CIBIL Score is a three-digit numeric summary of your credit history. This score will be in the range of 0 to 900. Financial institutions will check your CIBIL score before approving your loan application. The higher your CIBIL score, the better your credit rating is.
CIBIL Score Ranges and their Meaning
CIBIL Score between 0 and -1: This score indicates that you have no credit history created by a credit card or loan.
CIBIL Score between 300 – 600: This is a poor credit score. It indicates that you have been defaulting on payments and the chances of getting loans or credit cards are minimal.
CIBIL Score between 600 - 750: This is a good credit score. It indicates that you have a good credit history and that you won’t have any problems getting loans.
CIBIL Score between 750 - 900: This is the highest range of credit scores. It indicates that you are regular with your loan EMIs and credit card payments. You might get good interest rates for this score range.
Factors Affecting CIBIL Score
Some of the common factors that affect your CIBIL scores are given below.
- Delayed Repayments
- Credit Repayment History
- Having No Loans
- Errors in the CIBIL Report
- Having Multiple Loans and Credit Cards
- Paying Only the Minimum Amount Due
Impact of Low CIBIL Score on Overseas Education Loans
The probability of getting an overseas education loan will depend on your CIBIL score. So, let us discuss the impacts of low CIBIL scores on unsecured or secured overseas education loans.
- Higher Rate of Interest
- Longer and Slow Approval for Loans and Credit Cards
- Credit Cards with Low Credit Limits
- No Discounts on Processing Fees and Other Charges for Loan Applications
- More Documentation
- Lower Loan Amount
- Limited Loan Tenure
As you can understand, your CIBIL score can become a deciding factor for your loan approval and sanction. Furthermore, the CIBIL score of the co-applicant is also an important consideration. An excellent CIBIL score will increase your chances of getting an education loan.
If you are still thinking about how to apply education loan for abroad studies, well you can reach out to the best overseas education loan consultancy and get overseas education loan assistance.
Good luck!
