It is not easy for anyone to pay the EMI of the loan, and if even a single EMI is missed, it directly affects the credit score i.e. CIBIL score. Due to poor CIBIL score, it becomes difficult to take a loan in future. But now an important decision of the Kerala High Court has given relief to lakhs of people whose CIBIL score is weak.
What did the High Court say?
This decision is especially related to education loan. The High Court clearly said that education loan cannot be denied to any student only on the basis of weak CIBIL score.
The court also said that the ability of the students to repay the loan in future should also be seen and banks should adopt a human approach.
Full story of the case
In this case, a student had taken two different loans. Due to non-payment of some installments of one loan, the bank put the second loan in default as well. This worsened the student’s CIBIL score. When the student needed a loan for further studies, the bank refused to give the loan.
After this, the student knocked the door of the High Court through a Public Interest Litigation (PIL). The student said that if he did not get the loan, his future would be in limbo. After this, the court gave an important decision, curbing the arbitrariness of the bank.
What will be the effect of the decision?
- Now banks cannot reject education loans just because of poor CIBIL score
- The financial condition and future potential of the students will also be assessed
- The High Court has expressed displeasure over the decisions that hinder education
- Banks have been appealed to adopt a ‘human approach’
Relief news for students
The High Court said, “Today’s students are the future of tomorrow. If they are deprived of education due to poor CIBIL score, then how will the country develop?” In such a situation, banks will have to bring sensitivity in their decisions.
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