Loan for Education

How to get Education Loan with Low CIBIL Score: Steps & Process

By Tata Capital
07 January 2026
10 mins read
3472

Everyone deserves access to quality education; it’s one of the best investments one can make for a brighter future. However, with rising tuition costs in India and abroad, funding higher education can be a challenge. That’s where education loans play a crucial role in bridging the financial gap. However, securing a loan with a low credit score isn’t always easy. However, getting a loan can be challenging with a low credit score.

Getting an education loan with low CIBIL score may seem challenging, but it’s not impossible. While most lenders prefer applicants with a good credit history, there are ways to increase your chances of approval even with a low score. In this guide, we’ll walk you through how to get education loan with low CIBIL score to help you secure the right financial support for your higher education.

What Is a CIBIL Score and Why It Matters for Education Loans

A CIBIL score is a three-digit number ranging from 300 to 900 that reflects an individual’s creditworthiness based on their financial behaviour. It is calculated from past loan repayments, credit card usage, outstanding debts, and defaults. A higher score indicates strong repayment discipline and financial responsibility, while a lower score signals potential risk to lenders. For students, especially those applying for education funding for the first time, the CIBIL score helps lenders gauge the likelihood of timely repayment and manage their lending risk effectively.

Why It Matters for Education Loans:

Determines Eligibility: The education loan CIBIL score helps lenders decide whether a student qualifies for a loan and the maximum amount that can be sanctioned.

Influences Interest Rates: A good score can lead to lower interest rates, while a low score may result in higher rates or additional collateral requirements.

Role of Co Applicant: For students with limited credit history, lenders assess the co applicant’s financial profile to ensure repayment security.

Options Without Prior Credit: Lenders also offer education loan without CIBIL score for first-time borrowers, considering academic performance, institution reputation and co applicant strength.

Long-Term Financial Impact: Maintaining a healthy credit profile during studies improves future borrowing potential and builds a strong foundation for financial goals.

Minimum CIBIL Score for Education Loans in India

In India, most lenders prefer an applicant to have a minimum education loan CIBIL score of 750 or above for smooth approval. A strong score signals timely repayment behaviour and financial responsibility, which helps lenders offer better interest rates and flexible repayment terms. Students with a lower score may still get loans, but they might face higher interest rates, stricter collateral requirements or longer processing times.

For first-time borrowers or students without prior credit history, some lenders provide options like an education loan without CIBIL score. These loans rely more on academic records, the reputation of the institution and the financial profile of the co applicant, usually a parent or guardian. Maintaining timely payments on existing obligations and building a disciplined credit history can further improve chances of approval and ensure favourable terms for future borrowing needs.

Education Loans Without a CIBIL or With Low Credit Score

Many students face challenges when applying for loans due to a low credit score or no prior borrowing history. Lenders assess repayment capacity and risk before approving loans, so a low CIBIL score can affect interest rates and collateral requirements. However, students with strong academic records and reliable co applicants still have options. Lenders may offer customised solutions based on course reputation, institution ranking and co applicant financial stability rather than credit history alone.

One such option is an education loan without CIBIL score, designed specifically for first-time borrowers. These loans focus on academic performance, future earning potential and the financial profile of parents or guardians. Timely repayment of any existing obligations and careful financial planning can help students improve credit standing, making future borrowing easier. By leveraging these options, students can pursue higher education without being restricted by past credit limitations, while building a strong credit history for long-term financial security.

Best Lenders for Students With Poor or No Credit History

For students with limited or no credit history, choosing the right lender can make all the difference in securing education funding. Here are some leading lenders who offer flexible solutions focusing on academic performance, co applicant strength and course reputation.

Tata Capital Education Loans: Tata Capital provides customised options for students with little or no credit history. Lenders assess academic records, co-applicant income and course reputation, making it ideal for those wondering if a CIBIL score is required for an education loan.

Avanse Education Loans: Avanse supports students with minimal documentation and flexible terms, considering co applicant income and institution reputation to approve loans despite limited credit history.

SBI Student Loans: SBI evaluates co applicant reliability and academic performance, adjusting interest rates and collateral requirements based on risk profile.

Credila Education Loans: Credila offers loans where academic merit and co applicant profile matter more than the education loan CIBIL score, helping first-time borrowers access education funding.

5. ICICI Education Loans: ICICI provides tailored repayment plans for students studying abroad, focusing on co applicant strength and course potential rather than prior credit history.

CIBIL Score Ranges and Education Loan Approval Impact

Excellent Score (750-900): A high CIBIL score signals strong repayment behaviour. Lenders are likely to approve loans quickly with lower interest rates and minimal collateral.

Good Score (700-749): Students with a good score can expect approval with standard interest rates. Lenders may still evaluate co applicant income and course reputation.

Fair Score (650-699): Loans may be approved with slightly higher interest rates or additional security. Lenders carefully assess repayment capacity and co applicant profile.

Low Score (600-649): Approval becomes challenging. Lenders may require collateral or a strong co applicant, and scrutiny of academic and course details increases.

5. No Credit History: Students with no prior credit can opt for an education loan without CIBIL score. Lenders focus on academic performance, co applicant income and institution reputation to determine eligibility.

Other Key Factors Affecting Education Loan Approval

Academic Performance: Lenders consider a student’s academic records and entrance exam scores. Strong performance increases approval chances and may lead to better loan terms.

Course and Institution Reputation: The credibility of the chosen course and institution influences lender confidence. Recognised programs from reputed institutions are preferred.

Co Applicant Profile: Income stability and creditworthiness of the co applicant, usually a parent or guardian, play a crucial role in loan approval and repayment assurance.

Loan Amount and Repayment Capacity: Lenders evaluate whether the requested amount aligns with the student’s and co applicant’s repayment ability, ensuring manageable EMIs.

First-Time Borrowers: Students with no prior credit history can opt for an education loan without CIBIL score, where lenders focus on academic merit, co applicant profile and course potential rather than credit history.

How Flexible Are NBFCs and Private Lenders on CIBIL Score?

NBFCs and private lenders tend to be more flexible than traditional lenders when it comes to assessing a student’s credit profile. While a good education loan CIBIL score can simplify approval, these lenders also consider academic performance, co applicant income and the reputation of the institution before making a decision.

For students with limited or no credit history, NBFCs and private lenders often customise loan terms, including interest rates and collateral requirements. Their approach allows first-time borrowers to access education funding while building a credit record for future financial needs.

Secured vs Unsecured Education Loans: Role of CIBIL Score

In the case of an unsecured education loan, the credit score is the only evaluation metric left, besides income, for lenders to gauge your creditworthiness. So, if your score is on the lower end of the spectrum, chances are you might not be approved, or worse will be charged higher interest rates.

However, if you have an asset you can pledge as collateral, your credit score becomes a secondary factor to the lenders. In fact, you can even secure more competitive personal loan interest rates by putting up collateral.

Guarantor or Co-applicant: Improving Chances with Low CIBIL Score

If you’re thinking of funding your own education but lack the required credit score, you can opt for a guarantor to improve your loan eligibility. However, make sure the guarantor, preferably, has a high credit score and immaculate credit record. Why? Because lenders would be more likely to offer you a better offer on the low credit score student loans if your guarantor has a decent credit history.

Alternatively, you can also opt for a joint loan with a co-signee to improve your odds of approval.

Government-sponsored Schemes

There are various government sponsored schemes that make education loans more accessible. For example, the Central Sector Interest Subsidy Scheme (CSIS) offers interest subsidies to students from economically weaker sections and has more relaxed credit score criteria.

Display Proof of Income

If you’re wondering how to get education loan with low CIBIL score, understand that demonstrating a consistent and reliable income can significantly improve your chances. Lenders want assurance that you or your co-applicant have the financial capacity to repay the loan on time.

To do this, submit clear and recent proof of income, such as salary slips, bank statements for the last 6–12 months, Form 16, or Income Tax Returns (ITRs).

A stable income reassures lenders that the loan repayments will not be missed, making them more likely to approve your education loan with low credit score.

Correct any Errors in your Credit Score Report

Sometimes, it may so happen that you have a low education loan credit score, but for no fault of your own.

It’s common to have errors in your credit report, which can lower your credit rating.
To avoid such scenarios, it’s best to check your credit score regularly. Doing so will help you identify any issues the moment they crop, allowing for a quick resolution.
You can check your CIBIL score and correct any problems by visiting the official CIBIL website.

How to Check and Improve Your Education Loan CIBIL Score

Here’s how you can improve your low CIBIL score to secure an education loan.

Step	Explanation	Target
Reduce Credit Utilization	This is the amount of credit you’re using compared to your total available credit. High utilization negatively impacts your score.	Aim for below 30% usage
Pay Bills Timely	Timely payment of EMIs, credit card bills, and utility bills builds your repayment history and improves creditworthiness.	100% on-time payments
Check Credit Report	Review your report for errors such as incorrect personal details, outstanding dues already paid, or unauthorised accounts.	Dispute errors promptly
Avoid Multiple Loan Enquiries	Applying for too many loans at once leads to hard enquiries, which can lower your score.	Apply for credit only when necessary
Close Unused Credit Accounts	Too many open accounts can reflect poorly, especially if they show inactivity.	Keep 2–3 active accounts

Conclusion

While securing an education loan with low CIBIL score may seem difficult, it is certainly achievable with the right approach. At the end of the day, your academic goals shouldn’t be limited by a low credit score. By understanding how to get an education loan with low CIBIL score, staying informed, and being financially proactive, you can overcome the barriers and access the education you deserve.

Tata Capital offers education loans with competitive interest rates, easy eligibility and swift approvals. Enjoy flexible EMI plans and extended loan tenures for a comfortable borrowing experience with us.

Start planning your educational journey today with our personal loan EMI calculator.

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FAQs

What is the minimum credit score for a student loan?

There is no fixed minimum credit score for a student loan, but a score above 650 improves approval chances. Minimum credit score requirements vary across lenders.

Are student loans calculated in credit score?

Student loans are part of your credit report, like any other investment loan, and can impact your credit history and credit score. Paying on time maintains a healthy credit score.

How to improve CIBIL score immediately?

It takes around 4-12 months to improve credit score depending on the credit history and consistency of positive credit behaviours.

Can we increase CIBIL score in 10 days?

You can increase your CIBIL score by checking and understanding your CIBIL report. It takes 4-12 months to increase the credit score.

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

Most lenders in India prefer a minimum education loan CIBIL score of 750 to 750 for smoother approval, better interest rates and fewer collateral requirements.

Can students get an education loan without any CIBIL score or credit history?

Yes, students can apply for an education loan without CIBIL score, where lenders focus on academic merit, institution reputation and co applicant financial strength instead of past credit history.

Which lenders offer education loans with a low CIBIL score?

NBFCs and private lenders are flexible, offering loans to students with low scores based on co applicant income, repayment capacity and academic performance, making borrowing possible even when CIBIL score is required.

What should I do if my CIBIL score is below 650 for an education loan?

You should provide a strong co applicant, offer collateral if needed and approach lenders known for flexible policies for students with low or moderate credit scores.

Is a guarantor or co-applicant mandatory for low CIBIL score education loans?

Yes, lenders typically require a co applicant or guarantor to reduce lending risk, ensuring repayment reliability, especially when the student’s credit history is weak or insufficient.

How does a CIBIL score of 0 or -1 affect education loan approval chances?

A CIBIL score of 0 or -1 makes approval challenging, but lenders may consider academic performance, co applicant profile and institution reputation to sanction the loan.

How can I improve my CIBIL score quickly for an education loan?

Timely repayment of existing loans, maintaining low credit utilisation and avoiding multiple simultaneous applications can improve your credit profile and increase chances of smoother loan approval.

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