Does a Parent's CIBIL Score Affect Student's Education loan?

Does a Parent's CIBIL Score Affect Student's Education loan?


Last updated: 25 Oct 2022


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Education loan is one of the major crucial components when a student aspires to study their desired course but are limited due to their financial constraints. A study loan can be a saviour, which will help at every stage of a student to meet their  financial needs during their course of study. However, to avail the loan, there are many pre-requisites and the most critical of them is the CIBIL score.

The mental state of a student when he/she has a higher expectation and unfortunately the application for an educational loan is getting rejected is indescribable. But if the repayment rate for the education loans given in the past is low, the bank will not be so diligent in granting the loan. Let’s see some of the student’s cases who have applied for education loan and had got rejected below:

Rajesh is a student who has submitted an application to the bank for an education loan of Rs. 7,30,000/- All the required documents were submitted but the application was rejected on the basis that the co-applicant father's CIBIL score was low.

Jessie had applied for an educational loan of Rs. 3,96,000/- from the bank to pursue her MBA. All the required documents were submitted but that application was also rejected on the ground that the co-borrower father's CIBIL score was less than 685.

Pranav S. R V had also applied for an Education Loan and it was rejected on the basis of low credit score of guarantors in the State Bank of India. The Kerala High Court has held that the unsatisfactory credit scores of the petitioner's parents cannot be grounds for rejection of an education loan application.

Vidyalakshmi Portal has been developed under the guidance of the Department of Financial Services (Ministry of Finance), Department of Higher Education (Ministry of Education) and Indian Banks Association (IBA) with the aim of enabling poor and middle class students to pursue higher education of their choice without financial constraints.

The Supreme Court has clarified that the ground for disbursement of education loans should not be based on the parent’s capacity for loan repayment, but on the basis of their expected future employment earnings after the education of the applicant.

In exercise of the powers conferred by Sections 21, 35 and 56A of the Banking Regulation Act, 1949, the Reserve Bank of India has issued the Priority Lending Sectors 2020. Its Direction 4 & 11 have declared education as a priority sector and vocational courses not exceeding Rs.20 lakhs. It has also been clarified that the personal loans for educational purposes should be considered as preferential loans.

Students interested to know more about the Educational loans can contact us on +91 9916505050/+91 8088602346. They can also email us at or can also reach us as for more details.

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