Education loan: Having a high CIBIL score is very important if you want to get a bank education loan. Sadly, students with low CIBIL scores frequently have trouble securing education loans. A significant statement was recently made by the Kerala High Court to shed light on this matter.
Justice PV Kunhikrishnan censured the banks, underscoring that schooling advances ought not be denied exclusively founded on low CIBIL scores. Instead, he urged the financial institutions to evaluate applications for education loans with compassion.
LiveLaw reported that a Public Interest Litigation (PIL) filed in this regard was addressed by the Kerala High Court. The court emphasized that students are crucial to the nation’s development.
Dismissing an understudy’s schooling credit application exclusively on the grounds of a low CIBIL score is an unreasonable practice. Banks need to consider the human angle associated with these cases.
What prompted the court’s intervention?
Prominently, the applicant understudy had two exceptional credits, with one advance adding up to Rs 16,667 in late installments. Consequently, the bank marked the student loan account as past due, lowering their CIBIL score.
As a result, the student’s low CIBIL score hampered the loan approval process when they applied for one. Confronted with this issue, the understudy appealed to the High Court, earnestly looking for endorsement for the credit to keep away from likely difficulties.
Accordingly, the Kerala High Court stressed that banks ought to survey the understudy’s reimbursement limit as opposed to depending exclusively on the CIBIL score while conceding schooling credits.
How crucial it is to keep a good CIBIL score:
There are numerous times throughout life when borrowing money is necessary; be it for homes, cars, education, or anything else. Before approving such loans, a person’s CIBIL score is looked at by banks. Customers may face higher interest rates as a result of having a lower or incorrect CIBIL score, which can make it difficult for them to obtain loans.
It is essential to diligently pay off loans and credit card bills on time if you want a good CIBIL score. Also, it’s best not to be a guarantor for someone else’s loan because they might not pay it back on time, which can hurt your own CIBIL score.
