Study Loan for Canada
Canada is an incredibly popular destination for its world-class education system, attracting thousands of international students annually. However, the cost of studying in Canada can be a significant barrier for several students who want to pursue their academic goals in this country. International students may face financial challenges due to limited access to financial aid and scholarships. Fortunately, international student loans, including government loans, private loans, and scholarships, are available in Canada to help them cover the cost of tuition, accommodation, and other related expenses.
Whether you are a prospective international student considering studying in Canada or a current student needing financial assistance, this blog will provide valuable information to help you achieve your educational goals and discuss the eligibility requirements and application process for each option. So, let's get started!
Table of Contents
- What are the Types of Education Loans for Study in Canada?
- What is the Process of Applying for an Education Loan in Canada?
- Eligibility Criteria for obtaining a Loan to Study in Canada
- What documents are required to get a study loan in Canada?
- Eligible Courses for Educational Loan Support in Canada
- Repayment of Education Loan in Canada
- Expenses that are covered under Education Loans in Canada
- Collateral Rules
- Tax Benefits
- Top Loan Providers for Study Loans in Canada
What are the Types of Education Loans for Study in Canada?
Two main types of education loans are available for international students to study in Canada. Types of loans in Canada
- Collateral Loan in Canada
This type of study loan in Canada necessitates the provision of collateral as security. The collateral, in this case, is pledged to a lender as security for the loan amount. The collateral for such a Canadian education loan is
- Tangible assets, which include non-agricultural land, houses, flats, and other similar establishments.
- Intangible assets, which include life insurance, fixed deposits, government bonds, etc.
Government banks in India provide the most secure education loans for studying in Canada. The collateral security's value determines the maximum loan amount granted under any government bank education scheme.
2. Non-Collateral Loan in Canada
Non-collateral is another type of education loan that can be obtained in Canada. In this case, applicants are not required to provide security to the lender to obtain the loan. However, there must be a co-applicant whose income determines the likelihood of loan approval. If you are looking for a student loan for Canada from India, remember that unsecured education loans are only available from private and a few international lenders. NBFCs and private banks such as ICICI Bank, Axis Bank, and others primarily offer unsecured education loans.
What is the Process of Applying for an Education Loan in Canada?
The process of applying for an education loan in Canada can vary depending on the type of loan you are applying for. However, the following steps are generally involved
- Obtain an admission letter from your Canadian university.
- Examine the cost of living and tuition.
- Divide your finances into two categories: personal and loan.
- Examine the available education loan options.
- Consider factors such as interest rates and processing time when choosing a bank.
- Fill out the application form and include proof of required funds.
Overall, applying for an education loan in Canada can be complex, so it's important to research and seek AECC experts’ advice if needed. Read the terms and conditions carefully, understand your repayment obligations, and make informed decisions to ensure that you can successfully fund your education.
Eligibility Criteria for obtaining a Loan to Study in Canada
Education loans in Canada for international students have some needs and requirements that applicants must meet. Among them are
- Students must have an acceptance letter from a recognised Canadian institution for a full-time program.
- Students must be at least 18 years old. If the applicant is under 18, the parents must apply for an education loan in Canada.
- A strong academic record is optional, but it will undoubtedly help you obtain a study loan in Canada.
- The course you apply for must be job-oriented or offer promising career opportunities.
- To grant their study abroad loan for Canada, you must be able to pledge some collateral security for secured loans.
What documents are required to get a study loan in Canada?
The number of Indian students studying abroad has increased exponentially in recent years, and as a result, the demand for loans has increased significantly. Banks also verify the information provided by the applicants to sanction the loan. As a result, the applicant must submit a list of documents to the banks.
The following are the documents that must be submitted when applying for an education loan
- Admission Proof (Acknowledge letter from Canadian Institutions)
- Academic transcripts
- Student loan application form
- Bank statement of the last year
- Passport size photos
- Qualified exam scorecards (IELTS/ TOEFL/GMAT/ GRE)
- Age proof
- Identity proof
- Proof of Income
- Proof of residence
- Collaterals (if needed)
If you need assistance regarding an education loan, Contact AECC and get expert guidance for your burden with ZERO processing fees.
Eligible Courses for Educational Loan Support in Canada
An educational loan in Canada may cover a range of courses and programs of study at accredited Canadian colleges and universities. Most educational loans cover courses that lead to a degree, diploma, or certificate, including undergraduate and graduate programs. It may include business, engineering, health sciences, arts and humanities programs, and more.
In general, education loans cover these courses
- Undergraduate courses
- Postgraduate courses
- Postgraduate Diploma programs
- Doctoral courses
You can also get a study loan if you want to pursue short-term programs in Canada. However, the chances of obtaining such loans from nationalised banks are less.
Furthermore, keep in mind that lending institutions take your preferred institute's reputation into account. So, if you pursue career-oriented courses, your chances of receiving funding from a Canadian education loan are high.
Repayment of Education Loan in Canada
You may repay your education loan for Canada anytime during your academic studies or within six months of the completion of your course. If you pay it off completely before the end of your course, the banks will not charge you interest. Students receive documentation from the government detailing the interest rate and repayment amounts owed at the end of the grace period (6 months). In the case of a CIBC student line of credit, it is converted into a personal loan one year after graduation. Students can also extend their repayment period to a maximum of 20 years.
Expenses that are covered under Education Loans in Canada
It's one of the most important considerations when applying for an education loan. Because every bank offers various student loan programs, it is always a good idea to research which program best meets your needs. Different schemes cover different expenses, so it is always a good idea to check with the bank to see what other expenses, aside from the tuition fee, are covered by the loan scheme.
The following items are on the expense list.
- Academic tuition fee
- Travel expenses
- Health insurance
- Textbooks and other study material
- Laboratory fee
- Accommodation or hostel fee
- Laptop (If required for the course)
- Computer and software expenses
- Project expenses for work or study tour
If the loan exceeds INR 7.5 lakh, tangible assets are required as collateral security. In addition, all education loans require parents to be co-borrowers.
Here are the listed conditions for collateral security
- Security equal to 100% of the study loan for Canada.
- Guarantee of a third person known to the bank.
- Document execution from both you and your parents.
Section 80E allows for tax deductions on interest paid on the loan amount. Furthermore, once the repayment begins, the tax benefits can be claimed for up to seven years.
Loans are a boon for bright students who have the potential to make it big in life but are unable to do so due to rising costs.
Top Loan Providers for Study Loans in Canada
Numerous premier banks (both government and non-government) in India provide education loans for Canadians. The following loans can be considered
- SBI Ed-Vantage Student Loan - Up to INR 1.5 crores at interest rates starting from 8.50% to 11.25% for studies in Canada.
- HDFC Credila Study Loan for Canada - Up to INR 36,00,000 and more depending on course type and university.
- ICICI Study Abroad Education Loan - Provides funds up to INR 1 crore for all expenses.
In Canada, students frequently choose an education loan to fund their studies. Education loans are a great way for many international students to fund their higher education and realise their study abroad dreams. Obtaining an education loan in Canada is a lengthy process, and you should begin the process at least 6 - 7 months before your course begins.
AECC has collaborated with top Canadian institutions with various programs that help you gain overseas education at an affordable cost. To know more, contact AECC's expert guidance and build your career in Canada.