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Does Full Repayment on Student Loans Affect Your CIBIL Score?

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April 18, 2023


What’s Inside

The Credit Information Bureau of India Limited (CIBIL) maintains a record of an individual's creditworthiness. There is a direct correlation between student loans and the CIBIL score. If you have a good credit rating, acquiring loans at lucrative rates becomes easier.

Complete repayment of student loans on time is excellent for your CIBIL score. It improves your credit history and shows your credibility as a citizen or student.

This article contains helpful information that explains the impact of student loan repayment on your CIBIL score and associated details.

Connection Between CIBIL Score and Student Loan

Simply put, full repayment of your education loan positively affects your credit score. Consider student loans like any other type of loan.

Once you avail yourself of such funds, it is crucial to repay them on time. This transactional history helps maintain good creditworthiness. Here are the factors that influence CIBIL scores for student loans:

  • The credit limit on your card
  • Payment regularity
  • EMI payments and defaulted loans
  • Recent loans for any purpose

CIBIL considers repayment regularity and default loan rate vital when assessing a student loan.

Implications of a Good CIBIL Score Post Education

After completing your studies, it is essential to pay off the student loan at the earliest. It highlights your financial credibility and responsibility. As a result, you might receive good credit scores in the future. 

A good CIBIL score for a student loan will help you initiate a promising career in the following ways:

  • A good CIBIL score will allow a smooth transfer of funds in case of a start-up idea
  • Some employers consider a good CIBIL score as a sign of trustworthiness

On the contrary, a low CIBIL score translates to difficulty possessing credit cards. As a result, creating an additional source of funds can become challenging.

Tips to Prevent Educational Loan Defaults

You can consider the following tips to avoid defaulting on student loans:

  • Choose an institute with reasonable tuition fees for the specific program
  • Apply for a part-time job or paid internship to cover your expenses
  • Fund your education by taking money from family, relatives, or close friends
  • If applying for a student loan, plan all the process, repayments, and EMI meticulously

After all, you do not want to impact your creditworthiness in the later stages of your life. So, like other funds, pay attention to the CIBIL score for a student loan.

Summing Up

Your CIBIL score can improve or deteriorate depending on the repayment status of your student loan. If possible, repay any existing educational loan before completing the course. This way, you can get a fresh head-start on your career with a decent credit history.

Also, note that a good credit score can help you gain trustworthiness for jobs or initiating a business. Hence, managing your finances and paying close attention to factors like CIBIL score for a student loan is vital.

For more insights on personal finance, you download the Fi Money app. Our intuitive personal finance assistant can assist you in managing your money goals and planning a better financial future. Additionally, Fi's Credit Analyser helps you know your credit score and gives you tips on how to improve it. Use Fi and get better with your money.

Frequently Asked Questions

Is an education loan included in the CIBIL score?

Yes, CIBIL includes education loans to gauge an individual's credit rating. The score depends on your status of full repayment. 

What CIBIL score is necessary for education loan repayment?

To avail yourself of an education loan, it is vital to have a CIBIL score of around 700. Some lenders can accept scores below this mark. 


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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