Student Loan for Canada: Canada is competing with the USA as the most preferred destination for pursuing higher studies abroad. The cost of studying in Canada depends on the university, course, duration of study and cost of living. Although there are a lot of good universities in India as well, excellent career opportunities and high living standards drive students to opt for studying abroad. Not every aspiring student can afford to live and study in Canada. Therefore, various banks and other financial institutions offer study loans for Canada. Although different financial aids and scholarships are also available, because of the fierce competition, not every student can avail of them. In this article, we will inform you about each and every aspect of a study loan for Canada, from the eligibility and the loan application process to the documents required for getting an education loan to study in Canada. Apart from this, we will also inform you about what expenses are covered under the student loan for Canada.
International Student Loans Canada: Process
Getting a loan sanctioned is not only tedious but also time taking, so, in order to avoid any last-minute rush, one should always start applying for a loan early. After getting the admit letter from the university, students get an idea of the total expenditure including study and living. Calculate the amount you need to finance and how much you are going to spend from your own pocket. Do some research before applying for a loan and check which banks are giving the best deals on loans. Also, check out how to choose your bank for an education loan to study abroad.
Compare the loan offers of different banks on these parameters:
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- Interest rate
- Processing fee
- Expenses covered under the education loan
- Loan processing time
- Prepayment terms and duration
After selecting the bank, fill out the application form and check the requirements of the bank. The inability to show sufficient funds can also result in rejection, therefore, it is always recommended to approach at least two-three banks for loans. Students looking to apply for study abroad loans may contact India’s leading education loan providers through Shiksha Study Abroad.
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Study Loan for Canada Requirements
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 study loan for Canada. Here’s a list of the documents required while applying for the 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 the 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. Nationalized 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 for an education loan one must check the eligibility criteria for getting the 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 recognized 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 the job. The loan amount has to be repaid in 5 to 10 years once the repayment starts.
Note: The repayment conditions vary according to the banks’ rules or conditions covered under the loan scheme.
Expenses covered under Student Loan for Canada
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 all 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
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 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 in life but due to rising costs 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.
Study Loan for Canada FAQs
Q. How to get study loan for Canada?
A. Here are some steps that will help you get a study loan for Canada:
- Research: You need to find and compare various financial institutions that offer student loans for Canada. Research their interest rates, terms of study loan, eligibility requirements, repayment options, etc.
- Eligibility: Each lender has different eligibility requirements for study loans in Canada. Some require a co-signer, while some ask for a collateral. It is important to be clear about the Canada study loan requirements.
- Documents: Make sure to arrange all the necessary documents such as letter of acceptance, income tax returns, bank statements, etc. as required by the financial institution.
- Submit Your Application: Submit your Canada student loan application and make sure to meet all the requirements.
- Review Your Loan Agreement: Make sure to review your Canada student loan agreement before accepting it.
Q. What is the study loan for Canada interest rate?
A. Study loan for Canada interest rates vary depending on the financial institution and the terms and conditions of the loan. Interest rates for Canada student loans can range from 6.5% to 14%. Moreover, these interest rates are subject to change as per the change in bank guidelines. For instance, current interest rate (as of July 2023) for Canada study loan by HDFC Credila is 13.3%. Finding the best interest rate for your particular needs requires doing some research on several lenders and comparing their offers.
Q. How can I obtain study loan for Canada without security?
A. Here are some important points for obtaining a student loan for Canada without security or collateral:
- Creditworthiness of the co-applicant must be good.
- Good academic score and profile.
- Admission to a good college or university that can help you get a good job.
It is vital to keep in mind that the eligibility requirements and loan conditions may vary between lenders, so it is crucial to fully explore your alternatives and evaluate various offers to discover the one that best suits your unique circumstances.
Q. What are the documents required for study loan for Canada?
A. Documents required for a study loan for Canada vary as per the needs of the financial institution. Certain common documents required for study loan for Canada include:
- Proof of admission to a Canadian University/College
- Loan application form
- Passport-size photographs
- Income proof of the co-signer
- Academic records/transcripts
- Entrance exam results (GMAT/GRE/IELTS/TOEFL)
- Proof of identity (passport, ID card, etc.)
- Bank account statements
- Evidence of purchase of a special Guaranteed Investment Certificate (GIC) from a participating Canadian financial institution
Q. Besides study loan for Canada, how can I finance my education in Canada?
A. For many students, paying for their education in Canada can be rather expensive. There are other workable solutions to fund your tuition and living costs if you are unable to secure a study loan.
- Scholarships and Grants: Consider exploring scholarships and grants as one of your greatest possibilities. They may be granted based on merit, need, or even particular academic fields of study. To find out if your preferred Canadian college offers any scholarships or grants that you might be qualified to apply for, check with them directly.
- Part-time Work: Another option for paying for your education is to work part-time while you are a student. Canada permits international students to work during their studies, which helps lower living and tuition costs. Additionally, several Canadian businesses provide internships or co-op programmes to students in particular academic subjects, which provide beneficial job experience as well as some financial aid.
- Others: Crowdfunding, which has grown in popularity over the years, is a potential alternative. You might also try requesting financial aid from nearby companies, non-profits, or philanthropic organisations that are prepared to help students.
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