Complete Guide To Get A Study/Student Loan In Canada

One of the ways to fund your studies in Canada is to opt for a study/student loan in Canada. Education loan for Canada is a suitable option to get financial assistance to pursue higher education in Canada.

International students flock to Canada. Top colleges offer several opportunities and experiences. This opportunity costs. Besides tuition and living expenses, students must deposit CAD 10,000 in a Guaranteed Investment Certificate (GIC) with CIBC or SBI Canada.

Types of Education Loans for Study in Canada

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

Let’s discuss it in detail:

1. Collateral Loan in Canada

Canada study loans requires collateral. This collateral secures the loan amount. Canadian education loan collateral:

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

Government bank education loans are limited by collateral security.

2. Non-Collateral Loan in Canada

This is the second type of education loan for Canada. The lender does not seek security from applicants. However, a co-applicant’s income impacts loan approval. In India, only private lenders and a few international ones offer unsecured student loans for Canada. NBFCs and private banks like ICICI and Axis 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 finalise 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?

The bank will produce a loan document after accepting your college loan for Canada. The bank pays after approving your Canadian loan arrangement. As agreed, it will pay you in installments. The bank may pay Canadian university tuition occasionally. Spend your amount on books, tuition, a laptop, housing, etc.

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

One can readily receive secured and unsecured loans for Canadian MS courses. Canadian UG Diploma education loans are solely secured. The absence of Canadian UG Diploma job options is one cause. Banks prefer masters because they guarantee returns. It’s not a Canadian PG Diploma loan. PG Diploma students have trouble securing Canadian study loans.

Many bank staff are unaware that Canadian PG Diploma students can receive tuition loans. Since only Canadian colleges give PG Diplomas.

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 study loans cover 100% of academic expenditures. It offers various repayment choices and a faster turnaround time for international student loans in Canada. HDFC Credila study loans for Canada cover all international tests including IELTS, TOEFL, SAT, GMAT, GRE, etc. HDFC Credila loans for Indian students might reach 36 lakhs.

2. SBI Ed-Vantage Student Loan

SBI Ed-Vantage Loan is another popular international student loan for Canada. SBI Ed-Vantage offers Canada study loans at 8.00%. It pays 90% of tuition and non-academic expenditures. SBI lends Indian students up to 1.5 crores at 8.50% and 11.25% for studying in Canada.

3. ICICI Study Abroad Education Loan

ICICI study abroad education loans enable students buy GIC and study in Canada. Student Loans, GIC, Savings, and University Fee Payment Platform. Travel cards, currencies, in-flight expenditures, and outward remittances are all offered. ICICI’s “iSMART” program funds global studies up to 1 Crore. They charge 11.40%–14.00%.

Repayment of Education Loan in Canada

You can repay your Canadian education loan during or six months after your studies. Banks won’t charge interest if you pay it off before graduation. Students receive interest rate and repayment documentation from the government after six months of grace. In the case of a student line of credit from CIBC, the line of credit is converted into a personal loan one year after graduation. Students also have the option of stretching their repayment period out to a maximum of 20 years.

In Canada, students frequently choose an education loan to pay their studies. Education loans are a great way for many international students to support their higher education and make their study abroad ambitions a reality.

FAQs

Q: Can international students apply for student loans in Canada?

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

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

• A: 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.

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

• A: The main distinction between a loan and other forms of financial help such as grants and scholarships is that the latter do not have to be repaid, whereas loans must. Borrowing money to pay for your schooling, thus, lays a strain on your shoulders. This is why a loan should be your final resort for funding your education.

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

• A: 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.

Q: What are the student loan repayment terms in Canada?

• A: 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.