Introduction
Many different factors draw international students to Canada. The best universities provide a wide range of possibilities and experiences. However, this possibility comes with a cost. Additionally, students must deposit CAD 10,000 in banks like CIBC or SBI Canada as a GIC (Guaranteed Investment Certificate). Taking out a student loan in Canada is one way to pay for your education while studying there. If you want to attend college in Canada, an education loan from Canada is a good option. In this article, we’ll go through the many sorts of study loans in Canada, the requirements for getting one, the best lenders, and much more.
Types of education loans available to students
In Canada, there are a variety of educational loans available to students.
- Collateral Loan (Secured Loan)
- Non-Collateral Loan (Unsecured Loan)
Collateral Loan in Canada
The applicant must provide security as a guarantee to qualify for this study loan in Canada. This asset, which has been pledged as collateral to a lender, secures the loan amount. In Canada, the following are used as security for a similar student loan:
- An asset class includes tangible assets such as real estate (non-farming) and other structures.
- Life insurance, fixed deposit, government bonds, etc., are examples of intangible assets.
- Secured student loans from Indian government banks are the most common form of funding for international studies in countries like Canada. Under any federal bank education programme, the maximum amount of collateral security that can be used to secure a loan is limited.
Non-Collateral Loan in Canada
Here, the second category of Canadian student loans is mentioned. In this case, no security is needed from the borrower to secure the loan. The co-applicants income must be considered to receive a loan. There are only a few private lenders and a few foreign lenders offering unsecured education loans in India. The leading lenders of unsecured education loans are NBFCs and private banks like ICICI Bank, Axis Bank, and others.
How to Obtain a Canadian Student Loan?
If you want to receive an education loan in Canada, you must begin the procedure at least 6-7 months before your course start date. For Canadian students, the following is a step-by-step method for borrowing money:
- Find out which Canadian banks provide student loans to international students and the eligibility requirements and required supporting documents.
- Determine the total amount of money you’ll need to attend school in Canada based on the programme you desire.
- Get a letter of admission in writing from the Canadian college or university of your choosing.
- Compare the many loan choices various banks provide and choose the best one.
- Finalize the loan amount and complete the loan application after selecting a bank.
- An official loan document will be issued whenever a bank accepts your application. Before signing, you must thoroughly review the document.
- The bank will finally pay the agreed-upon loan amount when you’ve agreed to all the terms.
Getting a Loan to Study in Canada for a Diploma Possible?
One can readily obtain secured and unsecured loans in Canada for courses like MS. However, only fast loans are available in Canada for students pursuing a UG Diploma. Because there aren’t enough jobs for people with UG Diplomas in Canada, that’s a significant factor. Banks favour masters because they want to invest their money in a profile that provides a guaranteed return. However, it is not the same as a PG Diploma in Canada education loan .’s However, securing a student loan to study in Canada for a postgraduate degree is difficult.
This issue comes mainly as a result of the fact that many bank officials are not aware that students can obtain education loans to pay for their postgraduate degrees in Canada. In addition, because Canadian universities only offer a PG Diploma, most Indian lenders do not consider it a mainstream option.
Study Loan Eligibility Requirements for Canadian Student
Some conditions and requirements must be met before an international student can get a Canadian education loan. They include:
- You’ll need an acceptance letter from an accredited Canadian college for a full-time programme.
- Participating would be best if you were at least 18 years old. If the candidate is under 18, the parents must apply for a Canadian education loan.
- Although it is not a requirement, having a solid academic record will give you an advantage when applying for a study abroad loan in Canada.
- If you’re serious about getting a job, you’ll want to enrol in a school that will help you get there.
- To receive a study abroad loan for Canada, you must be able to provide some form of collateral security.
What is needed to get a student loan in Canada?
Students in Canada are required to provide the following documentation to receive a loan:
- Letter of acceptance/documentation of enrollment
- A form for requesting a student loan.
- Photos the size of a passport
- To prove one’s identity (Valid Passport, Voter ID, Driving License, Adhaar Card)
- Proof of age
- Transcripts and diplomas from college or university
scores (GMAT, GRE, IELTS, TOEFL) from various tests - Both the student and the guarantor must provide proof of permanent residency;
- An income statement is signed and witnessed by the guarantor. An example is a pay stub.
- Additional Documents, if Any, Are Needed
- An Extra Co-curricular Activities Certificate from a Minority Caste
- Certificate of Illness or Disability
Please remember that these are simply the starting points. Each bank will have its own documentation needs for Canadian student loans.
Best Lenders for Education Loan in Canada
In Canada, the best lenders for a study loan are listed here.
It is possible to get an education loan for Canada from several leading Indian banks, both government and non-government. They include:
Canada Study Loan from HDFC Credila
The HDFC study loan for Canada provides up to 100% of the funds needed to cover educational costs. Student loans for international students in Canada can also be processed more quickly using this option. In addition to domestic examinations like the IELTS, TOEFL, SAT, GMAT, and GRE, HDFC Credila study loans for Canada cover all of the costs of international exams like these. For Indian students, HDFC Credila loans are available for up to 36 lakhs.
Loans for College Students from SBI Education Advantage
Another famous student loan is the SBI Ed-Vantage Loan, designed expressly for studying abroad in countries like Canada. SBI Ed-interest Vantage’s rate on a study loan for Canada is as low as 8%. 90% of the total tuition and non-academic costs are covered. An interest rate of 8.50 percent and 11.25 percent are available to Indian students studying in Canada through SBI.
ICICI Student Loans for Study Abroad
Loans from ICICI study abroad education loans are available to those who want to study in Canada and purchase GICs. An online payment system for university fees is included in this package. This service provider also provides additional in-flight expenditures, travel cards, foreign exchange and external remittances. The ‘iSMART’ variation of ICICI’s study loan programme provides up to Rs. 1 crore for international research projects. They have interest rates ranging from 11.40 percent to 14.00 percent, depending on the type of loan.
Is it possible to get a bank loan to study in Canada for specific courses?
Banks provide financial aid for students who want to pursue undergraduate, master’s, or research degrees at a reputable university. SPP initiatives can also get funding from banks. Nationalized banks often do not offer education loans for vocational, short-term, or diploma courses. Students who need financial assistance should know that banks prioritize providing loans for techniques that would help them land a job after graduation.
Paying Back Student Loans in Canada
You can pay back your Canadian student loan any time during your academic studies or six months after they are over. If you repay the loan before your course’s completion, no interest will be applied. The government informs students of the interest rate and repayment sums due after the grace period, which is six months long. A student line of credit from CIBC is converted to a personal loan one year after graduation. Students may also choose a 20-year maximum repayment period.
Application for a Student Loan
Starting the process of applying for a loan early will help you avoid the last-minute rush and ensure you have enough time to complete the application process. Upon receiving an acceptance letter from a university, students can estimate the overall cost of their studies and housing arrangements. Determine how much money you’ll need to borrow and how much you’ll be spending on your own. Find out which banks offer the highest interest rates before submitting a loan application.
A comparison of different banks’ loan offers can be made based on the following factors
- APR is the annual percentage rate on a loan
- There is a cost to use this service.
- Covered expenses for education loans and the length of time needed to process a loan.
- Terms and length of payment in advance
- Fill out the application form and check the bank’s requirements after choosing a bank.
- Rejection might also arise from a lack of appropriate finances. Thus, it is always advisable to approach at least two or three institutions for loans.
Amounts Reimbursed by Federal Student Loans
When applying for a student loan, this is one of the most crucial considerations to bear in mind. Because banks provide so many possibilities, it’s always a good idea to purchase around for the student loan that’s best for you. One should always verify with the bank to find out what the loan plan covers other expenses besides tuition fees. Costs on the list include:
- Tuition costs
- Expenses incurred while travelling
- How much does it cost to buy books and other educational materials
- Payment to the lab
- The cost of lodging at a hostel
- a new laptop computer (If required for the course)
- Work or study-related expenses
Collateral Rules
The borrower must put up tangible property as security when taking out a loan for more than INR 7.5 lakh. Parents are required for all student loans as co-borrower.
Tax Benefits
Section 80E of the tax code allows taxpayers to deduct interest paid on loans in full. Once the repayment begins, tax benefits can be claimed for up to seven consecutive years.
Borrowing is a lifeline for bright students who, despite their potential, cannot afford quality education due to the escalating costs. However, you should carefully review the loan agreement’s terms.
FAQs
Is it possible for non-Canadian students to get student loans here?
Yes. International students in Canada have a variety of financial aid options at their disposal, including student loans.
In Canada, what are the requirements for obtaining student loans?
The first step in applying for student loans is to secure a letter of acceptance from a Canadian university. To be eligible for a student loan in Canada, applicants must present proof of their identification, age, and, in the event of a secured loan, financial resources.
Is it worthwhile for international students in Canada to take out a student loan?
What sets a loan apart from other types of financial help is that while grants and scholarships do not need repayment, loans must. As a result, taking out student loans to cover your educational expenses is an extra responsibility. When it comes to paying for your education, loans should be your final option.
Which Canadian banks do not need collateral for college loans?
Unsecured or collateral-free student loans are available from non-banking financial institutions (NBFCs) and private banks in Canada. As an example, there’s ICICI and the rest of the aforementioned Incred family.
What are the payback terms for Canadian student loans?
The loan arrangement terms will determine a student loan’s payback terms. Before the lender gives you a loan, they will create a repayment plan.