Education Loan in Canada

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Education loan in Canada

Canada is the most sought-after country that provides students with a unique curriculum followed by leading universities. Along with academics, the country also offers diverse exposure and a dynamic student life. However,  studying in Canada comes with a set of expenses like tuition fees, accommodation, travel costs, etc. which require a good amount to be spared. Among the many ways to ease finances while studying abroad, many students opt for education loans to ease their procedure. In this blog, we will go through the many education loans in Canada along with their eligibility and repayment plans.

List of Banks Offering Education Loans to Study in Canada 

Bank Name Rate of Interest (Subject to Change) Maximum Loan Amount
SBI 8.15% – 8.65% ₹1 Crore
HDFC Bank 9 – 14% ₹20 Lakhs
Axis Bank 11.20% – 13.20% ₹7.5 Lakhs
Punjab National Bank 7.30% – 9.20% ₹10 Lakhs
Bank of Baroda 8 – 10% ₹80 Lakhs
ICICI Bank 7 – 11% ₹90 Lakhs
Canara Bank 7 – 10% ₹40 Lakhs
Allahabad Bank  7 – 11% ₹20 Lakhs
Syndicate Bank  8.25% – 11.25% ₹2 Crores

Check out the Ultimate Admission Guide 2021 to Study in Canada!

Eligibility to Get a Loan in Canada

There is an eligibility criterion to get an education loan in Canada which are listed down below. 

  • The applicant should be a citizen of India.
  • Applicants must have secured admission to a university in Canada.
  • Applicants must be above the age of 18 years. If not, the parents will have to apply for the loan. 
  • Co-applicants are required to hold an account in Indian banks and are required to have a stable financial condition to support the loan.
  • The applicant must have a good academic background.

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Documents Required

Along with the eligibility criteria mentioned above, students must also check the following list of documents before taking an educational loan in Canada. 

  • Proof of admission: Admission letter from university/institution. 
  • Loan application form.
  • Passport size photographs.
  • Income proof of the guarantor.
  • Academic Transcripts (certificates and mark sheets).
  • Documents of qualifying tests (GMAT, GRE, IELTS).
  • Resident proof of the student and the guarantor.
  • Statements of the last year from the borrower’s bank accounts. 

Please Note: Students must also check with the list of documents specific to the banks they are taking a loan from. 

Related Read: Evidence of Financial Support

Application Process

There are a lot of things that are considered before a loan is sanctioned to the student. It is better if the applicant applies for the loan after getting the admit letter from the university. Students must also have an idea of the total expenditure including study and cost of living in Canada. The costs can be different as per the university. Make sure you choose the bank from where you want to get a loan and get the best deal out of it. Also, do calculate how much loan you need to take and how much you can afford on your own. 

The loan offered by different banks can be compared on these parameters:

  • Interest rate.
  • Processing fee.
  • Expenses that are covered under the education loan.
  • Loan processing time.
  • Repayment terms and duration.

After selecting the bank, fill the application form and check the requirements of the bank. It is always recommended to approach at least 2-3 banks for loans to be sure of your chances.

Must Read – Education Loan without Collateral

Expenses Covered Under Loans

It is an important factor 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 is best for you and your conditions are being met with it. 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 fees. 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.

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How to Repay your Education Loans to Study in Canada?

After finishing school, there is a 6-month non-repayment period. No interest is put on your loan during this time. When this period is over you have to start making payments on your Canada Student Loan.  The 6-month non-repayment period starts after you finish your final school term, reduce from full-time to part-time studies, or leave school or take time off school.

Paying Before the 6-month Period Ends

You can make payments at any time on your loan. You do not have to wait until after the 6-month period ends. If you pay off your loan before repayment starts, you will not pay any interest. 

FAQs

Q1. Can international students apply for student loans in Canada?

Yes, although options for funding are more limited than for domestic students, private student loans are available. 

Q2. Are the loans available to Canadian citizens?

Yes, Canadian citizens can check whether they are attending an eligible school and therefore apply online.

Q3. Will there be a credit check?

Although most traditional lenders require applicants to have a good credit score, some lenders operate in other ways and take into account the borrower’s future potential to repay the balance.

Q4. Do I need a cosigner?

No. A co-signer is not required in Canada, although having a creditworthy cosigner may improve the interest rate you are offered.

Hope this blog helped you through the procedure for applying for an education loan in Canada. Applying for loans to study abroad and choosing the right university is a critical procedure. To make sure that you make the right decision, our expert mentors at Leverage Edu help you make choices from the best-suited courses and scholarships. Sign up for a free session today!

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