It then dawned on him that in his aim to own his dream house and save money for it, he had completely neglected paying his education loan, thereby costing him his home in Mumbai.
Like any other loan, it is vital to know that an education loan is a credit facility provided to help one pursue his/her higher education. Like any other form of credit, education loans have to be repaid once one completes his/ her course and gains employment. Also like any other loans and credit cards, education loans are also reported to the CIBIL and get reflected in the borrower’s CIBIL report.
Repayment of an education loan generally starts within six months of the student taking up a job or one year after the course ends, whichever is prior.
An education loan default occurs when the borrower fails to repay the education loan EMIs. Defaults on repayments of education loans will reflect in the borrower’s CIBIL report and negatively impact his/her CIBIL Transunion score and hence like in the case of Sachin, if one defaults on an education loan it could impact the chances of getting a loan for many more important milestones in the future like the dream home or the car he/she aspires.