Why CIBIL Score Matters for Your Education Loan?

One of the most common — and often confusing — questions students and parents ask us is:

“Does a CIBIL score impact my chances of getting an Education Loan to study abroad?”

At Study Abroad Loans, a dedicated study abroad consultancy with 30+ years of experience specializing in assisting study abroad aspirants in securing an education loan, we guide families through this crucial aspect of the loan process. In simple terms, a CIBIL score is a three-digit number that depicts the creditworthiness of an individual, most often, the student’s co-applicant (such as a parent or guardian). Since students usually don’t have a financial track record, banks assess the co-applicant’s credit history to decide whether the loan should be approved, how much can be sanctioned, and at what interest rate. In this blog, we’ll take you through what a CIBIL score is, how it impacts your Education Loan application, and what timely steps you need to take to improve your CIBIL score.

Read More: Free Study Abroad Counselling with SIEC

What is a CIBIL Score?

A CIBIL score is a three-digit number that shows your creditworthiness — in other words, how likely you (or your co-applicant) are to repay the loan amount. This score is determined from the co-applicant's previous and present financial history, such as loan payments, use of credit cards, and payment track record.

The CIBIL report of the co-applicant becomes very important while taking an education loan for foreign studies.

CIBIL Score Range:

Note: Even though CIBIL score plays a very major role, the eligibility for an Education Loan is distinct for each profile. Terms and conditions apply, and each profile is specific. Hence, we strongly advise you to consult our specialized education loan experts to receive personalized guidance for your study abroad experience.

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Why is CIBIL Score Important?

Banks don't merely check the university or course you wish to apply for when you seek an education loan; they want to ensure that the loan is paid back on time, either while traveling abroad or after studies overseas.

Since most students lack an earning history, banks consider the overall financial health of the co-applicant. And here is where the CIBIL score is a game-changer.

Here’s how your co-applicant’s CIBIL score can directly affect the loan application:

1. Affects Loan Approval

A good CIBIL score indicates a pattern of responsible credit behavior — on-time payments, low outstanding dues, and good financial stability.

• Nationalised Banks and NBFCs are likely to sanction education loans if the co-applicant has a good repayment history. It ensures banks that the student is being supported by someone who is financially reliable and sound.
• Conversely, a low CIBIL score might lead to delays, rejections, or requests for more documents or collateral.

A good CIBIL score = Higher trust = Smoother approval process

2. Impacts the Interest Rate

Interest rates are not the same for everyone — banks give better interest rates to applicants with a low-risk profile. One of the most significant factors of low risk is a high CIBIL score.

• A co-applicant with a score of 700 or more, or 750+, is the best and can assist in getting lower interest rates.

Lower interest rates = Lower EMIs = Less financial burden after course completion

3. Determines the Sanctioned Loan Amount

For students aspiring to study in premier universities in Australia, New Zealand, the USA, the UK, Germany, Canada, or any other nation, the loan amount covers all expenses (Tuition Fees + Air Tickets + Living Expenses).

• Banks are more comfortable in offering higher loan amounts when the co-applicant has a strong CIBIL profile.
• This can be especially helpful when you’re applying for an Unsecured Education Loan (i.e., the loan without collateral), where the creditworthiness of the co-applicant is the main deciding factor.

Higher CIBIL score = Higher sanction potential = More financial freedom

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Tips to Maintain or Improve Your CIBIL Score

Create a solid financial foundation — one wise step at a time.

Whether you are a student looking to establish your credit history or a parent looking to finance your child's studies abroad, keeping your cibil score maintained is the key to securing favourable loan options down the line. Here are a few ways by which you can maintain or improve. These are some ways you can sustain or enhance your creditworthiness:

1. Pay All EMIs and Credit Card Bills On Time

Your payment history constitutes a building block of your CIBIL score.

• Never pay late. One late payment is enough to harm your score and remain on your credit report for years.
• Make auto-debit instructions or automatic reminders to prevent missing deadlines.

2. Keep Credit Card Balances Low

Overusing your available credit limit is an alarm bell for banks.

• Try to keep your credit utilization below your total credit limit.
• Pay off your credit card balance in full, or as much as possible, every month.

3. Avoid Multiple Loan or Credit Applications in a Short Time

Each time you apply for a loan or credit card, the bank runs a “hard inquiry” on your credit report.

• Too many such inquiries in a short span can make you seem credit-hungry, and it can lower your score and indicate financial instability.
• Seek credit only when essential, and after conducting thorough research.

4. Check Your Credit Report Regularly

At times, your CIBIL score would fall because of mistakes in your report, and you might not even be aware unless you check.
Check your report regularly or once a month.

• Be aware of wrong entries, duplicate entries, or fraud.
• If your payment has been delayed by any chance, try to pay it off as soon as possible because it may lower your credit card points.
• In case you find any errors, raise a dispute as soon as possible to get them rectified.

5. Have a combination of Secured & Unsecured loans

To create a well-balanced profile, multiple credit types assist in increasing your score in the long run.

• Combine secured loans (like home or car loans) with unsecured loans (like credit cards or personal loans). This shows banks that you can handle different types of credit responsibly.
• If you’re new to credit, consider starting with a credit card or a small personal loan to establish a history.

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Conclusion

At Study Abroad Loans, we’ve assisted thousands of students across India to make their study abroad dreams into reality by securing the right education loan at the right time from trusted banks.

We understand that every student profile is distinct, and so are their financial conditions. Therefore, we go beyond just numbers and scores — we strategically place your application with banks, NBFCs, or loan options that fit your academic and financial profile best, even if your co-applicant’s CIBIL score isn’t perfect.

Whether you’re aiming for top universities in Australia, the UK, New Zealand, Ireland, Germany, or any other country, we’ll guide you through:

• Personalised Loan solutions (with or without collateral)
• Faster approvals and competitive interest rates
• Support for students with low or no credit history

Your CIBIL score matters — but your dreams matter more.

📞 Book a free consultation with our education loan experts today.

Let’s make sure that finances don’t hold you back, because your destination deserves every chance.

Reach out to SIEC for Application inquiries and assistance.

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