Student Loans In Canada: How To Get A Study Loan In Canada

The world’s international students flock to Canada. Top institutions offer many possibilities and experiences. This opportunity is costly. at addition to tuition and living expenses, students must deposit CAD 10,000 as a Guaranteed Investment Certificate (GIC) at CIBC or SBI Canada. Canadian study loans are one way to financing your studies. Canadian education loans are a good way to finance higher education. This site covers all about Canadian study loans, including types, eligibility, top lenders, and more.

Types of Education Loans for Study in Canada

• Collateral Loan (Secured Loan)
• Non-Collateral Loan (Unsecured Loan)

1. Collateral Loan in Canada

This type of study loan for Canada requires the applicant to provide some kind of collateral as security. The collateral here is pledged to a lender as security equal to the loan amount. The collateral for such education loan for Canada are:

Tangible assets like land (non-agricultural), houses, flats, or any such establishments.
Intangible assets like life insurance, fixed deposit, government bonds, etc.

The maximum loan amount granted under any government bank education scheme depends on the value of the collateral security.

2. Non-Collateral Loan in Canada

Second-type Canadian education loan. The lender does not request collateral for this loan. The loan sanction likelihood depends on a co-applicant’s income. Students in India can only get unsecured Canadian student loans from private lenders and a few foreign ones. NBFCs and private banks like ICICI Bank and Axis Bank offer unsecured education loans.

How to Get a Study Loan for Canada?

Since sanctioning an education loan in Canada is a lengthy process, you must get started with it 6-7 months before your course begins. Here is a step-by-step guide to getting loan for students in Canada:

• Research for the banks that offer student loan for international students in Canada along with their eligibility and documents required.
• Calculate the total fund required to study in Canada for the course you wish to pursue.
• Get the letter of acceptance from your respective college/university in Canada.
• Make a comparison of the different loan options offered by different banks and make the best choice.
• After deciding on the bank, the next step is to finalize the loan amount and fill the loan application form.
• Once your bank grants your loan application, it will issue a loan document. You must go through it carefully before signing.
• After agreeing to all the clauses of the bank, it will finally disburse the set loan amount.

What are the Expenses Covered under an Education Loan?

After accepting your Canadian education loan, the bank will issue a loan document. After verifying your Canadian loan, the bank pays. As agreed, it will pay in installments or all at once. Sometimes the bank pays Canadian university tuition. Accept your payment and use it for books, tuition, a laptop, housing, etc.

Can One get a Student Loan for Diploma Courses in Canada?

MS courses in Canada are easily funded through secured and unsecured loans. Canada exclusively offers secured UG Diploma education loans. The lack of Canadian jobs after UG Diploma studies is a major factor. Banks prefer masters because they guarantee returns. However, it is not a Canadian PG Diploma loan. Students have trouble receiving PG Diploma study loans in Canada.

Many bank personnel are unaware that students can get education loans to support their PG Diploma in Canada, causing this issue.

Eligibility Criteria to Get Study Loan for Canada

Education loan in Canada for international students requires some needs and requirements that have to be fulfilled by the applicants. Some of them are:

• You must have an acceptance letter from a recognized Canadian institution for a full-time program.
• You must be of or above 18 years of age. If the applicant’s age is less than 18 years, the parents will have to apply for the education loan for Canada.
• An outstanding academic record is not a compulsion, but will definitely help you in getting a study loan for Canada.
• The course you apply for must be job-oriented or have good career prospects.
• For secured loans, you must be able to pledge some kind of collateral security to grant their study abroad loan for Canada.

Documents Required to Get Study Loan for Canada

There is a list documents required for study loan for Canada that include the following:

• Acceptance letter/ proof of admission
• Student loan application form
• Passport size photographs
• Identity proof (Valid Passport, Voter ID, Driving License, Adhaar Card)
• Age proof
• Academic transcripts and certificates
• Exam scorecards (GMAT/ GRE/ IELTS/ TOEFL)
• Permanent residence certificate of both student and guarantor
• Bank statements of last one year
• Guarantor’s proof of income. Example: salary slip

Other Optional Documents if Applicable

• Minority Caste Certificate
• Extra Co-curricular Activities Certificates
• Illness or Disability Certificate
• Do keep in mind that these are the basic documents. Every bank will require a different set of documents for education loans in Canada.

Top Loan Providers for Study Loan in Canada

There are many premier banks (both government and non-government) that offer education loan for Canada in India. Some of them are:

1. HDFC Credila Study Loan for Canada

Canadian HDFC student loans cover up to 100% of academic costs. International students in Canada can get a loan faster and with flexible repayment alternatives. HDFC Credila Canada study loans cover all foreign exam costs, including IELTS, TOEFL, SAT, GMAT, GRE, etc. Indian students can borrow up to 36 lakhs through HDFC Credila, depending on their degrees.

2. SBI Ed-Vantage Student Loan

SBI Ed-Vantage Loan is another popular student loan for studying abroad, especially Canada. SBI Ed-Vantage offers 8.00% study loans for Canada. It pays up to 90% of tuition and non-academic costs. SBI provides Indian students up to 1.5 crores in school loans at 8.50% and 11.25% for Canadian students.

3. ICICI Study Abroad Education Loan

ICICI study abroad education loans enable students buy GIC and study in Canada. It comprises student loans, GICs, savings accounts, and a university fee payment mechanism. Additional in-flight charges, travel cards, currencies, and outward remittances are available. Under the ‘iSMART’ option, ICICI finances global research up to 1 crore. Interest rates range from 11.40% to 14.00%.

Repayment of Education Loan in Canada

You can repay your Canadian education loan during or six months following your courses. Banks won’t charge interest if you pay it off before the course ends. When the grace period ends (6 months), students get government documents on interest rates and repayment amounts. CIBC student lines of credit become personal loans one year after graduation. Students can extend their repayment duration to 20 years.

Students often opt for an education loan in Canada to fund their studies. Education loans are an excellent source for a lot of abroad aspirants to fund their higher education and turn their study abroad dreams into reality.

FAQs

• Can international students apply for student loans in Canada?

Yes. There are various options of funding for international students in Canada, one of them being student loans.

• What are the requirements to apply for student loans in Canada?

To avail of student loans one has to first acquire a letter of acceptance from a Canadian university, and then begin with the application process. Identity proof, age proof and presence of funds in case of secured loans are mandatory requirements to apply for a student loan in Canada.

• Is it worth taking a student loan for international students in Canada?

The biggest difference between a loan and other forms of financial aid like grants and scholarships is that the latter does not need to be paid back, but loans do. This means that borrowing money to pay for your studies places a burden on your shoulders. This is why a loan should be the last option to fund your education.

• Which bank is best for education loans for canada banks without collaterals?

Some non-banking finance companies (NBFC) or Private Banks provide collateral-free or unsecured education loans for Canada. These include Incred, Avanse, Auxilo, ICICI etc.

• What are the student loan repayment terms in Canada?

The student loan repayment terms will depend upon the agreement with the lender. The repayment schedule will be set by the lender before granting your loan.