Education Loans From NBFCs : Guidelines | GyanDhan

You can never put a price tag on a dream. Unfortunately, the dreams of many aspiring students are crushed prematurely owing to ever-increasing costs of education. Education loans come as a boon to these students, especially for those aspiring to study abroad. But it is important that you chose the right kind of loan and also opt for the right institution to borrow from. Let us have an in-depth look at abroad education loans and ways to source these NBFCs loans.

This is a companion discussion topic for the original entry at

Do NBFCs provide an education loan if the co-applicant has an irregular income?

If you have taken an unsecured education loan, then the co-applicant’s income is an important factor. So if the co-applicant has an irregular income source, the loan can get rejected. This is because the co-applicant will have to make interest payments during the study period. Also, the co-applicant will have to submit their ITR and bank statements to be eligible.

If your co-applicant has an irregular income source, it is best to take a secured education loan as the income is not a factor. Only the value of the property will be taken into consideration.

Do NBFCs help in opening a block account for Germany?

I want to apply for a loan for Germany but my father’s CIBIL score is 635. Will it be a problem?

Hi Divya,

They don’t help in opening the account, they can transfer the money in the block account. Opening the block account in Germany is very easy.


Hi, It depends on why CIBIL is low. If it was a wilful default then its a problem. I recommend you to get in touch with us and explain in details.

Team GyanDhan

does the existing loan of the co-borrower affect the decision? We have a home loan and a personal loan. Though we are regular with our EMIs.

The decision will be based on the income that is left after deducting your liabilities. The income of the co-applicant is an important factor as he/she will be required to make interest payments. As you have mentioned that you have two existing loans, then your co-applicant’s income should be more than enough to add on a third liability and comfortably fulfill the said liabilities.
Making timely EMIs will have a positive effect on your credit history, another factor that is taken into account while evaluating the applicant’s profile.

Thank you for the reply.
If the income of the co-applicant is not enough, can we commit security of lesser value?

I’m assuming you mean to say that given that the income of the co-applicant is not enough, will providing a collateral help offset some of that.

There are 2 ways you can go about it.

  • Add another co-applicant: You can add multiple co-applicants to a loan application. The salaries and the obligations are grouped which can help increase your eligibility
  • Provide a collateral: While banks don’t generally offer partially secured loan products (they primarily offer either secured or unsecured products), NBFCs do consider the collateral provided. They can also offer different payment terms including partial interest payments during your period of study which will again increase your eligiblity.