- HOW IT WORKS?
- Credit Score & Report
- Credit Bureaus
When it comes to having a secured and a bright future, education is certainly the building block for a successful tomorrow. Apart from this, in India, the quality of education plays a significant role deciding your placement. Hence, qualifying from a reputed university or college is a must. These institutions are decidedly costly, and if you or your child has the ability, then money should certainly not be a barrier. This is where education loan comes to your rescue. A primary explanation for an education loan is the fund that is offered by the banks for perusing higher education either within the country or abroad. Almost all Indian banks offer education loans, wherein the demand for this loan has been stable and quite popular amongst the student community.
Why people opt for Educational Loan?
I personally feel that the question should ideally be – “Why opt for education loan instead of personal loan or savings from the savings account?” Below mentioned facts will validate the point: –
- Expert Help: Education fees involve a lot of aspects like accommodation, tuition fees, library fees, etc. We may not be experts in analysing and addressing these streams. Since banks address these issues on a regular basis, they can offer expert assistance so that the applicant does not fall short of funds while pursuing the course.
- Education is a Costly Affair: There are different options available when it comes to education loan. One can either opt for long term accumulation plan or instant loans to pursue their dreams. Education from a renowned college is expensive and not to forget that these expenses are not altering in a foreseeable curve. A good education loan balances all these uncertainties and safeguards you from unexpected surprises.
- Easy Availability: An Educational loan is a priority product in most of the banks. Apart from this, RBI also considers this loan imperative for national growth. Hence, its easy availability is also one of the primary reasons behind its popularity.
- Timely Assistance: Banks are to your rescue whenever you need them. Apart from this, your biggest asset will be your education to repay the bank after you have secured a decent job.
Benefits and Features of Education Loan
- It is universally available to all.
- Available for all courses in India and abroad, as well.
- The loan is available from 10 – 15 lacks and if the applicant wishes to go abroad for higher education, the amount may extend to 20 lacks as well.
- The applicant’s primary income is taken into consideration before giving the loan amount.
- Special discounts are offered to female applicants.
- There is no need to repay the borrowed amount immediately. The borrower can repay after 5-7 years of the complication of the course.
- Loans below 4 lacks do not demand any security.
The benefits of an educational loan are innumerable, but if you fail to repay and call for a settlement, it can ruin your credit score to a considerable extent. This offer for One Time Settlement is referred to as OTS in banking language. Under this situation, the bank asks the borrower to clear a part of the amount which is usually more than the principal amount. However, no bank will inform you that this settlement is an indication that the borrower is not able to repay and this settlement will have a negative impact on the credit score.
Once the amount is settled, the bank will not send recovery agents or any emails or messages to recover their amount. You will mentally feel relaxed that a burden is settled. However, you will get to know the implications of this settlement when you wish to get a loan again. Education loan settlement by now must have ruined your CIBIL score badly. The outcome will be that no bank will be ready to trust you and lend you any amount.
So, how to improve CIBIL score after education loan settlement?
You must be thinking whether there is a way to work on your credit score? Yes, certainly there is, but remember that it’s not an overnight quick fix way to improve your CIBIL score. You will have to work towards it to avail financial help in the future. The following will help:
- Convert the status of the previous loan: – While you are negotiating with the bank on settling your educational loan, bargain a little and ensure that the status of the loan is “closed” rather than “settled.” This will have less impact on your credit score.
- Pay all your dues regularly: It’s always wise to repay your credit card bills, bank loan interest, etc. on time. All these play a crucial role in building a positive credit history. Gradually you will end up building a score that will be preferred by the banks for the lending purpose.
- Close all your unused accounts: We usually have a number of bank accounts, and we fail to maintain a minimum balance in these accounts. It’s not that we lack funds, but we just are not using these bank accounts. We get reminder messages and emails, but we conveniently ignore them. But we fail to understand that financial agencies consider this as an inability to maintain a minimum balance and hence your CIBIL score drops. Therefore, it is wise to close all open and unused savings accounts to build your credit score.
- Continue to take and use credit: Did you know that lack of credit history is also a negative point for your CIBIL score. Do take loans or use your credit card and ensure to pay them on time so that you build a positive credit score.
Settling an account or a loan with the bank is not an uncommon thing, but you will have to work towards the damage to building a positive CIBIL score. It is wise to set a target of 750 (minimum credit score) for being credit-worthy. It might take 4-12 months, but remember that it’s worth for your future financial needs. The reward for this effort forms the basis of a number of financial needs that can be addressed because of a decent score. Remember that financial prudency is important for a secured financial future.
Do not know how settle education loan or improve credit score after settlement? Credit Seva will guide you through the entire process and will ensure that you get a credit worthy again.
- TransUnion CIBIL
- CIBIL Credit Score
- CIBIL Credit Report
- Free CIBIL Score & Report
- How to Check CIBIL Score
- How to Improve CIBIL Score
- How to Pay Off Credit Card Debt
- Bad CIBIL Credit Score
- CIBIL Score Calculation
- Can I Get a Loan with a Credit Score of 550
- CIBIL Score Myths
- CIBIL Grievance Redressal Process
- CIBIL Report Error
- CIBIL Score for Car Loan
- CIBIL Score for Credit Card
- CIBIL Score for Home Loan
- CIBIL Score for Personal Loan
- How to Get Personal Loan with Low CIBIL Score
- CIBIL Score for Business Loan
- Can I Get Car Loan with Low CIBIL Score?
- CIBIL Credit Monitoring Services
- Link between MCLR and CIBIL Score
- Credit Score Important at Retirement?
- Does Personal Loan & Credit Card help Improve Credit score?
- Factors That Deciding Your Credit Score
- Factors Affecting CIBIL Score
- Top 12 Interesting Facts about CIBIL Score
- CIBIL FAQs
- Good Habits That Help You Maintain Good CIBIL Score
- Minimum Payments Affect Your Credit Score?
- How to Read Your Credit Report
- Impact of Late Payment on CIBIL Score
- Tips to Increase CIBIL Score
- Loan Settlement Affects CIBIL Score
- Low Credit Limit despite a High Income
- Loan Approval Process On CIBIL Score
- Importance of CIBIL Score for Financial Objectives
- Importance of CIBIL Report
- Missing One Payment Affect CIBIL Score
- Small Mistakes That Can Hurt CIBIL Score
- Personal Loan for CIBIL Defaulters
- Reason for Loan Rejection Other than CIBIL Credit Score
- How to Resolve CIBIL Report Errors
- Skipping Bill Payments can Affect Your CIBIL Score
- Solutions for Your CIBIL Credit Report Problems
- Test Your Financial Fitness
- Things That Don’t Show up on Your Credit Report
- CIBIL Consultant
- CIBIL vs Experian vs Equifax vs CRIF High Mark
- Different Types of Credit Can Boost Your CIBIL score
- Having a High CIBIL Score can get you a low rate of interest
- How a Good CIBIL Score Can Improve Your Job Prospects
- How Credit Information is Important for a New Borrower
- How Long It Takes To Improve CIBIL Score
- Tips to Improve CIBIL Score
- Important Factors for CIBIL Score improvement
- Co-Signing a Home Loan? Proceed with Caution
- What is DPD in CIBIL Report?
- How to Remove Name from CIBIL after Settlement?
- Ways to Remove Name from CIBIL Defaulter List
- CIBIL Dispute
- How to Improve CIBIL Score after Personal Loan Settlement?
- How to Improve CIBIL Score after Home Loan Settlement?
- How to Improve CIBIL Score after Education Loan Settlement?
- How to Improve CIBIL Score after Car Loan Settlement?
- How to check your CIBIL Score with your PAN Card?
- How to Improve CIBIL Score after Settlement?
- How to Improve CIBIL Score Immediately?
- Car Loan for CIBIL Defaulters
- CIBIL Score for SBI Bank Credit Card
- Credit Card for CIBIL Defaulters
- Home Loan for CIBIL Defaulters
- Loan without CIBIL Verification