Canada is a quintessential hub for international students from across the globe. The top-notch universities offer a plethora of experiences and opportunities. But this opportunity comes with a price tag. Other than the tuition fees and cost of living, a student also needs to deposit CAD 10,000 as a Guaranteed Investment Certificate (GIC) in banks like CIBC or SBI Canada. One of the ways to fund your studies in Canada is to opt for a study loan in Canada. Education loan for Canada is a suitable option to get financial assistance to pursue higher education in Canada. In this blog, we cover everything that you need to know about study loan for Canada, including its types, eligibility criteria, top loan providers, and much more.
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
This type of study loan for Canada requires the applicant to provide some kind of collateral as security. The collateral here is pledged to a lender as security equal to the loan amount. The collateral for such education loan for Canada are:
- Tangible assets like land (non-agricultural), houses, flats, or any such establishments.
- Intangible assets like life insurance, fixed deposit, government bonds, etc.
Government banks in India majorly lend secured education loan for study in Canada. The maximum loan amount granted under any government bank education scheme depends on the value of the collateral security.
2. Non-Collateral Loan in Canada
This is the second type of education loan for Canada. Here the applicants do not require to pledge any security to the lender in order to avail the loan. But there must be a co-applicant whose income determines the loan sanction probability. If you are looking for a student loan for Canada in India, do keep in mind that only private lenders and a few international ones offer unsecured education loans to students. Unsecured education loans are mainly provided by NBFCs and private banks like ICICI Bank, Axis Bank, etc.
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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.
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What are the Expenses Covered under an Education Loan?
Once the bank accepts your education loan to study in Canada, it will issue a loan document. After validating your loan agreement for Canada, the bank pays the amount. It will pay you in segments or lump sum as per agreement. Sometimes, the bank may pay the tuition fee to the individual Canadian university. Once you accept your amount, spend it on the needed expenses such as books, tuition fees, a laptop, accommodation etc.
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Can One get a Student Loan for Diploma Courses in Canada?
For courses like MS in Canada, one can easily get both secured and unsecured loans. But when it comes to education loan for UG Diploma in Canada, you only have the option of secured loans. One of the prime reasons here is the lack of enough employment opportunities in Canada after completion of UG Diploma courses. Banks want to invest their funds in a profile where it guarantees the return and so they prefer masters instead. However, it is not the same as an education loan for a PG Diploma in Canada. But students have a tough time getting themselves a study loan for Canada for PG Diploma.
This problem arises mainly because many bank officials are unaware of the fact that education loans can be granted to students to fund their PG Diploma in Canada. Also, since only colleges in Canada offer a PG Diploma, the course is not considered to be a mainstream one by most lenders in India.
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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.
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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.
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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
The HDFC study loan for Canada offers up to 100% of the funds for academic expenses. It also has a lower turn-around time for a student loan for international students in Canada and offers flexible repayment options too. HDFC Credila study loans for Canada cover all expenses of international exams like IELTS, TOEFL, SAT, GMAT, GRE, etc. too. Indian students can get up to 36 lakhs through HDFC Credila loans depending upon their courses.
2. SBI Ed-Vantage Student Loan
SBI Ed-Vantage Loan is another popular student loan specifically for overseas education in different countries including Canada. The study loan for Canada’s interest rate through SBI Ed-Vantage is as low as 8.00%. It covers up to 90% of the total tuition fees and non-academic expenses. SBI offers education loans for Indian students up to 1.5 Crores at interest rates starting from 8.50% and 11.25% for studying in Canada.
3. ICICI Study Abroad Education Loan
ICICI study abroad education loans offer students loans to pursue higher education in Canada as well as helps in the purchase of GIC. This includes Student Loans, GIC and Savings Account and a University Fee payment platform. It also provides additional in-flight expenses, travel cards, forex services, and outward remittances. ICICI offers funds up to 1 Crore under the ‘iSMART’ variant for studies across the globe. Their interest rates start from 11.40% to 14.00%.
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Repayment of Education Loan in Canada
You may repay your education loan for Canada at any time of the duration of your academic courses or 6 months after their completion. If you manage to pay it off fully before the end of your course, the respective banks won’t charge interest from you. At the end of the grace period (6 months), students receive documentation from the government detailing the interest rate and repayment amounts owed. 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.
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Students often opt for an education loan in Canada to fund their studies. Education loans are an excellent source for a lot of abroad aspirants to fund their higher education and turn their study abroad dreams into reality. Do check out our blog cost of living in Canada to know more about the expenses in Canada for international students. And to get more information about Canadian universities, connect with our Yocket Professionals and clear your doubts.