Education Loan for Canada: Eligibility, Banks & How to Apply

It is known to all that studying in Canada is more expensive than in India. Not all students have financial support, so they either need scholarships or education loans for Canada. Banks and NBFCs offer financial aid to students in the form of study loans.

Covering the cost of studying in Canada is a major step for international students. While scholarships and personal savings are great, they may not cover every expense. This is why many students choose an education loan for Canada to bridge the financial gap.

Several factors decide how much you need to borrow. These include the type of university, your chosen course, and the length of your program. An education loan for Canada typically covers tuition fees, travel costs, and living expenses. To qualify, you must be an Indian citizen, usually over 18, with a confirmed admission letter from any of the recognized Canadian universities.

Want to apply for an education loan to study in Canada? Compare different banks to find the best interest rates. Collect all documents like your passport and income proof. Once your documents are verified, the bank will sanction the amount. Starting this process early ensures you have your funds ready before your visa interview.

How to Apply for Education Loan to Study in Canada

Getting an education loan for Canada can be a time-consuming process if you do not have proper knowledge. Starting early is crucial to avoid last-minute stress. Once you receive your admission letter from Canadian university, calculate your expected expenses during your studies, including tuition and living costs. Compare different education loan schemes offered by banks. Select one which fits your needs and apply.

Compare the Study loan offers of different banks on these parameters:

• Education Loan Interest Rate: A lower rate reduces your overall repayment burden.
• Processing Fee: Check for any hidden costs related to the education loan application.
• Expenses Covered: Make sure the loan covers comprehensive costs like tuition, living expenses, travel, and books.
• Loan Processing Time: Understand how long the approval and disbursal will take.

After selecting a bank, complete the application form and diligently gather all required documents. It's often advisable to apply to a couple of banks to increase your chances of approval, as insufficient funds can lead to rejection. Students looking to apply for study abroad loans may contact India’s leading education loan providers through Shiksha Study Abroad.

Documents Required For Study Loan

In the last few years, the number of Indian students going to study abroad has increased exponentially; therefore, demand for loans has also risen significantly. In order to sanction the loan, banks also verify the details given by the applicants. So, there is a list of documents that the applicant needs to submit to the banks to obtain a study loan for Canada. Here’s a list of the documents required for education loan:

• Admission letter from university/institution (Proof of admission)
• Loan application form
• Passport size photographs
• Academic documents (certificates and mark sheets)
• Documents of qualifying exams (like GMAT, IELTS)
• Resident proof of the student and the guarantor
• Statements of borrowers' bank accounts (last year)
• Income proof of the guarantor

Note: The requirement of documents can vary as per the banks’ own rules and regulations, so it is always advised to check the list of documents required with the respective bank.

Courses for which banks provide a loan to study in Canada?

Those students who wish to apply for undergraduate, master's or research programs in established institutions are funded by the banks. Banks also provide loans for SDS Colleges. Nationalised banks generally do not offer education loans for vocational, short-term or diploma courses. As banks always think about getting the amount back from the student seeking funds, they always prefer to disburse loans for job-oriented courses.

Education Loan for Studying in Canada: Eligibility

Before applying, one must check the eligibility criteria to get student loan approval. Some of the factors that are considered by all the banks are:

• The loan applicant must be an Indian citizen.
• The applicant must have secured admission to a recognised foreign university/institution.
• The loan applicant must be above the age of 18 years or his/her parents will have to apply for the loan. 
• The applicant must have secured admission to a professional course.

Repayment of Study Loan for Canada

Repayment starts after a period of one year or six months, whichever is earlier, after the completion of the course, once the candidate gets a job. The loan amount has to be repaid in 5 to 10 years once the repayment starts.

Expenses Covered Under the Student Loan

This is one of the most important factors to keep in mind while applying for an education loan. As there are a lot of student loan schemes offered by banks, it is always recommended to check which scheme suits your needs the best. Different expenses are covered under different schemes, so one should always check with the bank as to what other expenses are covered in the loan scheme apart from the tuition fee. The list of expenses includes:

• Tuition fee
• Travel expenses
• Cost of buying books and other study material
• Laboratory fee
• Hostel fee
• Purchase of a laptop (If required for the course)
• Expenses for project work or study tours

Collateral Rules

If the loan amount exceeds INR 7.5 lakh, then tangible assets are needed as collateral security. Also, parents are required to be co-borrowers for all education loans.

Tax Benefits

Tax benefits can be claimed on the interest paid on the entire loan amount under Section 80E. Further, the tax benefits can be claimed for up to seven consecutive years once the repayment starts.

Loans are a boon for brilliant students who can make big impact in life, but due to rising cost,s are not able to gain a quality education. However, it is recommended to carefully check the conditions of the loan agreement.

Now that students have sufficient knowledge about Student Loan for Canada, they can get in touch with India’s top-rated loan providers and apply for an education loan through Shiksha Study Abroad.