A good education gives wings to an individual to fly higher in the career. It is a stepping stone to achieve their ambitions in life. However, not all have the means to fund their studies from their own pockets considering the rising cost of education.

Most of us approach a bank for an education loan to get money to pursue our education. It could be quite a challenging affair if you are unable to get an education loan due to your bad credit score.

If you are one of those individuals with bad credit and looking for an education loan, this article can be of great help.

What Is a Bad Credit?

A bad credit history or credit score is a resultant of poor management of your credit. It could be due to any of the following reasons

·         Late payments on your loans and credit cards

·         If you have missed your payments on your loans and credit cards

·         Foreclosure

·         Written-off or settled account

·         Too many hard enquiries

A bad credit puts you in the bad book of the creditors and any future loan application is turned down due to the above reasons.

Getting an Education Loan with Bad Credit

To become eligible for an education loan, you must have maintained a good credit track record. If not, you can consider the following ways to secure the education loan.

Good Credit of Your Father/Guardian: While you may have a poor credit history, with the good credit score of your guarantor, you can get an education loan. The lender will do a background check on the creditworthiness, income and employment of your guarantor.

Secured Education Loan: With a good credit, you can get up to INR 7 Lakhs without pledging any security. But if you are having a bad credit, a secured education loan could be a viable option. With a considerable collateral, you are very likely to become eligible for a student loan even with a bad credit. Evaluate the value of your assets and you can pledge them to fund your education.

NBFCs: Many doors open when one door shuts. Though the leading banks consider your credit score and report seriously, Non-Banking Financial Companies (NBFCs) have a relaxed approach towards credit score. With a guarantor and security, you are very likely to obtain a student loan from NBFCs even if you have a low credit score.

How to Get a Student Loan with No Credit Checks?

A hard credit check is when a lender refers to a credit bureau on your creditworthiness while processing your loan application.  If your choice of route is through banks and NBFCs then there will certainly be a hard credit check and a bad credit history will reflect badly and will lead to lower loan amounts or unfavourable terms.

While bad credit could be deterrent to avail an education loan, there are ways where no credit checks are required in obtaining a student loan.

Following are the options

P2P Lending Websites: Peer to Peer lending websites provide good loan amount for people with no credit checks. The creditworthiness is evaluated by combining your personal data and technology. The interest may be little higher than the title banks. However, you have higher chances of getting a loan through P2P lending system.

Gold and Property to Your Rescue: A gold loan or a loan against your property can get you the instant fund you need for your education. As gold is used as a security, no credit checks are required in getting the student loan. However, the difficulty in this case is that you may have to start the repayment immediately whereas in an education loan, the repayment starts after completing your studies.

Credit Cards for Students


There are other ways that a student can get credit as well. Students can avail a secured credit card if they have a fixed deposit account in their name. The student should be over 18 years to avail a credit card. Also, there is a minimum fixed deposit amount requirement. Approval is quick since you are securing a credit card against an FD. In case of default, the bank will recover the amount from your FD account.