Kerala High Court made it clear that a low CIBIL score now won’t be a concerning point in the case of a student’s education loan. The High Court opted for an empathetic approach and ordered banks to do the same while approving loans for students.
A guy from Aluva filed a petition regarding the delay and rejection of his education loan. This guy opted for two loans and he was unable to pay the remaining amount of the first loan, thus it was overdue for around 16,000 rupees. And another loan was not approved by the bank. The bank provided the reason for the low CIBIL score for the petitioner. But in this case, the petitioner got the job in a multinational company and thus he will be able to repay the amount of the loan, a clear point was put by the advocate of the petitioner.
After hearing the case, Kerala High Court Judge P. V. Kunhikrishnan stated that, “students are the nation’s future asset. One must think by humanitarian point and provide education loan to students. CIBIL scores should not be considered while approving loans to students.
But what is CIBIL score exactly? Why do banks generally consider it for giving loans?
The Credit Information Bureau India Limited provides credit reports for individuals. This three-digit number reflects our credit history and the individual’s capacity to repay the loan. Basically, it’s the creditworthiness of an individual. The higher the credit number, the greater the chances of approving a loan.
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