How to Get an Education Loan with Low CIBIL Score: Tips, Banks, and Alternatives

If you’re worried that a low CIBIL score might stop you from securing an education loan, you’re not alone. Many students face this problem, especially when they or their parents have a less-than-perfect credit history. But don’t panic—there are still plenty of ways to secure an education loan, even with a low or no CIBIL score.

We'll explain everything you need to know about getting an education loan with low CIBIL score, including how much CIBIL score is required for education loans, banks that offer loans to students with low or no CIBIL scores, and alternatives you can explore.

‍

What is a CIBIL Score?

A CIBIL score is a three-digit number that represents your creditworthiness. It’s a key factor for banks when deciding whether to approve loans, including education loans. The score ranges from 300 to 900, with scores above 750 considered good for loan approvals.

But if your CIBIL score is low (below 750), don’t worry. You can still apply for an education loan with a low CIBIL score, though the loan terms might be different.

‍

Also Read: Axis Bank Education Loan 2024

‍

Get Education Loan for Any College in India. 100% Fees Financed- Propelld Education Loan

‍

How Much CIBIL Score is Required for an Education Loan?

Typically, banks prefer a CIBIL score of 750 or higher for education loans. However, this isn’t a strict rule. Some banks and financial institutions are willing to offer education loans to students with CIBIL scores below 750 or even no CIBIL score at all.

When banks see a low CIBIL score, they often compensate by:

1. Charging higher interest rates.
2. Asking for collateral (like property or fixed deposits).
3. Considering the financial history of a co-applicant (usually a parent or guardian).

Worried about funding your education? Propelld offers flexible loan options tailored for students like you. Get started with your application today!

‍

Can You Get an Education Loan with a Low CIBIL Score?

Yes, you can absolutely get an education loan with low CIBIL score, but there are a few things to keep in mind:

1. Interest Rates

 Lenders often compensate for the risk of a low CIBIL score by charging higher interest rates.

2. Collateral 

Some banks might ask you to pledge collateral such as a property, vehicle, or a fixed deposit to secure the loan.‍

3. Co-applicant’s CIBIL Score

If your CIBIL score is low, banks often rely on the co-applicant's financial history to make a decision. A co-applicant with a good score can boost your chances of approval.

4. Non-Banking Financial Companies (NBFCs)

 NBFCs like HDFC Credila, Avanse Financial Services, and InCred are often more lenient with CIBIL score requirements. They may even offer education loans without checking CIBIL scores.

Get upto 100% Education Fees Financed with Propelld. Simplified  Processing  Dedicated Support.

‍

How to Secure an Education Loan Without CIBIL Score?

To secure an education loan without a CIBIL score, there are several options. Here's how you can explore alternatives that don't rely heavily on credit scores:

1. NBFCs Can Be a Great Option

Non-banking financial institutions like HDFC Credila or Avanse Financial Services offer loans to students without CIBIL scores, though they might charge a slightly higher interest rate.

2. Explore Government Schemes

Many government-backed schemes don’t require you to have a CIBIL score at all. For example, the Vidya Lakshmi Portal offers education loans to students from economically weaker sections without heavy emphasis on CIBIL scores.

3. Check for Secured Loans

Banks and NBFCs may provide loans against collateral such as property, fixed deposits, or gold. In these cases, your credit score becomes less relevant, as the asset serves as security.

4. Get a Co-Signer or Guarantor

A family member with a strong credit score can act as a guarantor for your loan. The bank will evaluate their financial history instead of relying solely on your credit score.

5. Explore Education Loans from Small Finance Banks

Some small finance banks have more relaxed credit requirements and might focus more on your academic performance and potential rather than your credit history.

6. Get Education Loan on the Basis of Future Income

Some lenders, particularly fintech companies, may offer loans based on your potential to earn in the future. These loans evaluate the course you're pursuing and the potential salary in your chosen field.

7. Check for Peer-to-Peer Lending

Peer-to-peer lending platforms connect you with individual investors who might be willing to finance your education based on different criteria, including the potential of your degree.

‍

Also Read: How to Get an Education Loan for Abroad Studies in 2024?

Worried about funding your education? Propelld offers flexible loan options tailored for students like you. Get started with your application today!

‍Minimal Documentation. Higher Chances of Approval. Easy Online Processes. Check Your Eligibility. 

‍

Which Banks Give Loan for Low CIBIL Score?

Several banks in India understand the challenges of a low CIBIL score. If you’re wondering which bank give loan for low CIBIL score, here are your top options:

‍

‍

Propelld is here to support your academic journey with flexible education loans. Don’t let finances hold you back—apply now and take the first step towards success!

‍

Government Schemes for Students with Low or No CIBIL Score

The Indian government has launched multiple schemes to ensure that students with low or no CIBIL score can still get education loans:

‍

Education Loan with Low CIBIL Score: Eligibility

‍

Also Read: Apply for a Student Loan in India for UG Program.

Unlock your academic potential with Propelld’s education loans. Designed for students, our loans offer easy terms and quick approval. Learn more and apply today!

‍

Get your Loan Disbursed 10 times Faster than Banks. Apply Now.

‍

Pros and Cons of Education Loans with Low CIBIL Score

Here are some benefits and cons for an education loan with low cibil score or without a cibil score.

‍

Also Read:  Bank of Maharashtra Education Loan: Eligibility and Interest Rates

‍

‍

Getting an education loan with a low CIBIL score may seem like an uphill task, but with the right approach, you can secure the funds you need. Whether you opt for public sector banks, NBFCs, or government schemes, there are plenty of options available.

Make sure to compare interest rates, terms, and conditions before making a final decision. And remember, even if your CIBIL score is low, there’s always a way forward.

Take control of your education finances with Propelld! Our student-friendly loans offer quick approvals, flexible repayments, no collateral up to 50 lakhs, and a lot more!

‍

Why Propelld?

‍

‍Invest in your education and apply with Propelld today!

‍

FAQ on Education Loan With Low Cibil Score

Can I get an education loan with a low CIBIL score?‍

Yes, you can get an education loan with a low CIBIL score, but it may come with higher interest rates or collateral requirements. Banks and NBFCs often provide loans to applicants with low credit scores.

Which bank offers education loans for low CIBIL score applicants?

‍Banks like State Bank of India (SBI), Bank of Baroda, and Punjab National Bank offer education loans to applicants with low CIBIL scores. NBFCs like HDFC Credila and Avanse Financial Services are also more flexible.

What is the minimum CIBIL score required for an education loan?‍

Most banks prefer a CIBIL score of 750 or above for education loans, but some may consider lower scores if a co-applicant with a strong credit profile is involved or if collateral is provided.

Can I apply for an education loan without a CIBIL score?‍

Yes, you can apply for an education loan without a CIBIL score, especially if you're a first-time borrower. Banks often evaluate the co-applicant’s financial history in such cases.

How can I get an education loan if my CIBIL score is below 750?‍

If your CIBIL score is below 750, you can improve your chances by applying with a co-applicant who has a good credit score, providing collateral, or approaching NBFCs with more flexible conditions.

Are there government schemes for students with low CIBIL scores?‍

Yes, government schemes like the Central Scheme for Interest Subsidy (CSIS) and Pradhan Mantri Vidya Lakshmi Karyakram offer loans to students from economically weaker sections without strict CIBIL score checks.

What are the options for getting an education loan without a co-applicant?‍

Some NBFCs may offer education loans based on factors like your future earning potential or the reputation of the institution, though you might face higher interest rates.

Can I get an education loan if I don’t have any credit history?‍

Yes, students without credit history can apply for education loans. Banks will often assess the co-applicant’s credit profile or you can approach NBFCs that don’t rely heavily on credit history.

Which banks give loans to students with no CIBIL score?‍

Banks such as State Bank of India (SBI), Bank of Baroda, and private lenders like ICICI Bank often provide loans to students without a CIBIL score, relying on the co-applicant’s financial profile or collateral.

What factors influence my education loan approval with a low CIBIL score?‍

For students with a low CIBIL score, banks consider the co-applicant’s financial history, collateral offered, the institution you’ve been accepted to, and your future earning potential.

How do NBFCs offer education loans with no CIBIL score?‍

NBFCs like HDFC Credila and Avanse Financial Services offer education loans based on factors like future career prospects, the institution’s ranking, and sometimes collateral, rather than focusing solely on your CIBIL score.

What are the interest rates for education loans with low CIBIL scores?‍

Interest rates for education loans with low CIBIL scores are usually higher. Public sector banks may charge 9-12%, while NBFCs could charge 11-14%, depending on the risk assessment.

What is the role of a co-applicant in securing an education loan with low CIBIL score?‍

A co-applicant with a high credit score can greatly improve your chances of securing an education loan with a low CIBIL score, as their income and credit profile act as additional guarantees for the lender.

Are there alternatives to education loans for students with low CIBIL scores?‍

Yes, alternatives include scholarships or grants, crowdfunding platforms for education, NBFCs with flexible credit requirements, and government-backed schemes offering interest-free loans during the study period.