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.
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
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How Much Minimum 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:
- Charging higher interest rates.
- Asking for collateral (like property or fixed deposits).
- Considering the financial history of a co-applicant (usually a parent or guardian).
How is the CIBIL Score Calculated?
The CIBIL credit score is calculated by the CIBIL algorithm using the Credit Information Report (CIR) and six months of financial data, taking into account 258 different variables, each assigned a specific weight. There are four main factors that determine the CIBIL score:
CIBIL Score Ranges
CIBIL scores range from 300 to 900, where a score of 900 represents the best possible creditworthiness. A CIBIL score of 750 or higher is considered excellent, as it significantly improves your chances of being approved for loans and credit cards.
What is a Low or Bad Credit Score?
A bad credit score typically indicates that your score falls below a certain threshold, making it difficult to secure loans or credit with favorable terms. Generally, a score below 600 or 650 is considered poor.
Here are some common factors that can lead to a bad credit score
1. Late Payments
Consistently making late payments on credit cards, loans, or bills can significantly harm your score.
2. High Credit Card Balances
Utilizing a large portion of your available credit on credit cards, known as high credit utilization, can negatively impact your score.
3. Defaulting on Loans
Failing to repay loans or defaulting on financial obligations can severely damage your credit.
4. Bankruptcy
Filing for bankruptcy is a serious matter and can remain on your credit report for several years.
5. Foreclosure
Losing your home through foreclosure can greatly affect your credit score.
6. Collection Accounts
Having accounts sent to collections due to non-payment reflects poorly on your credit report.
7. Multiple Credit Applications
Frequently applying for credit in a short time frame can give the impression of financial instability, which can lower your score.
To improve your credit score, it's essential to address these issues and take proactive steps to manage your finances more effectively.
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Why Do You Need a Good Credit Score for an Education Loan?
When you have a good CIBIL score, banks consider you creditworthy, which increases your chances of getting a loan approved. Additionally, banks are likely to offer you more favorable interest rates on education loans.
Here’s why having a good CIBIL score is important for securing an education loan.
1. Shows that You’re Creditworthy
A high score means lenders see you as responsible with money, making them more likely to approve your loan.
2. Reduces the Paperwork in Your Application
With a good score, you’ll have to deal with less documentation, making the application process smoother and quicker.
3. Secure Lower Interest Rates
A strong score can help you get lower interest rates, which means you save money over time and have smaller monthly payments.
4. Better Negotiating Power
A good score gives you leverage to negotiate better terms with lenders, like interest rates and repayment plans.
5. Get Extra Perks
You might enjoy special offers and benefits, like discounts or quicker approvals, just for having a good score.
Don't worry if your CIBIL score for an education loan is low or poor. You can still secure a loan even with a low CIBIL score. Check out Propelld Education Loans.
How to Get an Education Loan with a Low CIBIL Score?
So, when asked, can I get an education loan with a low CIBIL Score, my answer would be, absolutely Yes! You can get an education loan with a low CIBIL score.
5 Ways to Get an Education Loan with a Low CIBIL Score
Here are 5 ways that can help you get an education loan with a low CIBIL Score:
1. Get a Secure Education Loan with Collateral
One of the most effective ways to get a loan with a low CIBIL score is to apply for a secured education loan. You can offer collateral such as property, Fixed Deposits (FDs), or other valuable assets. Since the bank’s risk is reduced with collateral, they are more likely to approve your loan even if your credit score isn’t perfect.
2. Apply with a Co-Applicant or Guarantor
If your CIBIL score is low, you can add a co-applicant or guarantor with a strong credit history — usually a parent or guardian. Their good credit profile can boost your chances of loan approval, as banks consider the financial background of the co-applicant too.
3. Use Government-Backed Education Loan Schemes
Banks participate in government schemes that support students from financially weaker backgrounds. For example, the Central Sector Interest Subsidy Scheme (CSIS) offers interest subsidies on education loans and does not heavily depend on credit scores, making it easier to get a loan approved.
4. Non-Banking Financial Companies (NBFCs)
NBFCs like HDFC Credila, Avanse Financial Services, and Propelld are often more lenient with CIBIL score requirements. You can check for your loan requirements with them.
5. Improve Your CIBIL Score Before Applying
If you still have some time before you apply, try to improve your CIBIL score:
- Pay off any existing loans or credit card dues on time.
- Avoid taking new loans or credit cards unnecessarily.
- Keep your credit usage low.
Check out our detailed guide on how to improve your CIBIL score to boost your chances of loan approval. With the right strategy and preparation, your academic goals can still be within reach.
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How to Secure an Education Loan Without CIBIL Score?
To secure an education loan without a CIBIL score, there are several options similar to the ones that we discussed for a low CIBIL score. 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?
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Does a Parent’s CIBIL Affect a Student's Education Loan?
Yes, the credit score of parents is important in student education loan approvals. Since most students are young and may not have a good credit history, banks primarily assess the financial credibility of the parent or guardian, who typically acts as a co-applicant or guarantor.
Lenders give importance to individuals with a strong credit profile—those who have demonstrated responsible financial behaviour, such as timely repayment of EMIs and proper management of existing credit. A good parental credit score significantly increases the chances of the loan being approved.
Understand who can be a co-applicant for an education loan. This knowledge can significantly impact the approval process and the terms of the loan.
My Father’s CIBIL Score is Low, Can I Get an Education Loan?
Yes, if your father's CIBIL score is low, you can still secure an education loan by exploring multiple options, including secured loans (with collateral), government-backed education loan schemes, Non-Banking Financial Companies (NBFCs), or involving a co-applicant or guarantor (parent or Guardian). Alternatively, if you have time before applying, consider improving your father’s CIBIL score for Loan approval.
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:

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How Can I Get an Abroad Education Loan with a Low CIBIL Score?
Getting an education loan abroad with a low CIBIL score can be challenging, but it's not impossible. Here are some steps you can take to improve your chances
1. Understanding CIBIL Score
CIBIL (Credit Information Bureau India Limited) score ranges from 300 to 900, with a higher score indicating better creditworthiness. A score below 650 is generally considered low, which can lead to loan rejections.
2. Strong Academics
A solid academic record significantly boosts your chances of getting your loans approved.
3. Institution’s Reputation
Loans for studies at reputable and prestigious institutions are viewed more favorably than those from lesser-known schools.
4. Course Category
Loans for professional courses that lead to high-demand jobs, such as an MBA, are more likely to be approved.
5. Borrower Evaluation
Lenders will assess your income and financial stability to determine your repayment capability.
6. Research Lenders
Look for lenders who specialize in education loans for students with low credit scores. Some banks and financial institutions have specific programs for this purpose.
7. Co-applicant
Consider applying for the loan with a co-applicant who has a good credit score. This can significantly improve your chances of getting approved, as the lender will see the co-applicant's creditworthiness.
8. Collateral
Offering collateral can also help in securing a loan despite a low CIBIL score. If you have assets like property or fixed deposits, you can use them to back your loan application.
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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.
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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
How to Improve Your Credit Score for an Education Loan?
7 Ways to Improve Your Credit Score for an Education Loan
1. Timely Repayment of Current Bills
Maintaining a history of on-time payments for your current bills, including credit cards, EMIs, and utility bills, is essential for building a strong credit score, which can significantly aid in securing loan approval. Therefore, before you apply for a student loan, make sure all your current bills are paid on time.
2. Showing Proof of Income
Demonstrating a solid income can reassure lenders that you have the means to repay the loan. Even if your credit score is less than ideal, proof of income indicates that you are financially stable enough to handle the loan repayments.
3. Apply for an Education Loan from NBFCs
Unlike banks, which often conduct thorough examinations of loan applications, NBFCs may be more lenient with their policies if the student’s profile is impressive.
4. Apply for a Secured Education Loan
With a secured education loan, your credit score takes a backseat. The value of the collateral you provide is what truly matters. Even if you have a poor credit score, you can still be approved for a loan by offering suitable collateral.
5. Resolve Credit Report Errors
To prevent your bad credit score from hindering your loan application, it’s crucial to address any errors in your credit report. Mistakes can happen, so it’s wise to review your credit report every six months to catch and correct any discrepancies.
6. Maintain a Low Credit Utilization Ratio
Credit utilization ratio refers to the percentage of available credit you are currently using. To improve your score, aim to keep your credit utilization below 40% of your total credit limit. High utilization indicates a higher risk of default.
7. Demonstrate Stability
Lenders value stability, so it’s important to have a consistent credit history. Try not to close accounts or transfer balances too often, since that can look like financial instability. Keeping your oldest credit accounts active shows that you manage credit responsibly over time.
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.
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