Are you considering studying in Canada but worried about the financial burden that comes with it? Don’t let the cost of education deter you from achieving your dreams. With the availability of education loans, you can finance your abroad education and secure your future. In this blog, we will explore the various options for study loan for Canada, including how to repay them.
Canada is one of the top study destinations in the world, offering high-quality education and a welcoming environment for international students. However, the cost of education in Canada can be quite high, especially for international students. The tuition, books, and living expenses can quickly add up, and many students require an education loan to cover these expenses. This is where Canadian student loans come in, providing eligible students with the financial support they need to pursue their education and achieve their academic and career goals. You can apply for loan to finance your education in Canada.
Types Of Education Loans Available For Studying In Canada
1. Education Loan With Collateral for Canada Studies
An applicant must provide collateral as security while applying for this type of study loan. In this type, a lender receives the collateral as security in an amount equal to the loan. Tangible assets like non-agricultural land, residential properties, or other establishments are used as collaterals.
2. Education Loan Without Collateral for Canada Studies
Education Loan without Collateral Loan for Canada is the second type of study loan. In this case, obtaining it does not require providing collateral to the lender. It’s important to note that a co-applicant’s income will impact the approval chances. Additionally, only a few foreign and private lenders offer unsecured education loans for students from India who want to study in Canada. The main providers of unsecured education loans for Canada are NBFCs and private banks such as ICICI Bank, Axis Bank, and others.
Eligibility Requirements: Education Loan For Canada Studies
To be eligible for an education loan to study in Canada, applicants typically need to meet certain criteria, which may include:
- The applicant must be an Indian citizen.
- A reputable overseas university or institution must have selected the candidate.
- You need an acceptance letter from an accredited Canadian institution for a full-time program.
- It would be best if you were at least 18 years old. The parents must apply for a Canadian education loan if the candidate is under 18.
- To be eligible, you must be pursuing a career-oriented or job-specific course.
Process of Applying for an Education Loan
To ensure a smooth and timely application process for an education loan to study in Canada, it is important to prioritise quality and reliability. By following these steps, you can avoid last-minute stress and secure the necessary funding for your education:
- Obtain the admission letter from your chosen Canadian university, as it serves as an important document during the loan application process.
- Carefully assess the cost of living and tuition fees associated with your education in Canada. This will help you determine the amount of funding you need.
- Divide your financial resources into two categories: personal funds and loan requirements. This will give you a clear understanding of how much financial assistance you require.
- Thoroughly research and explore the available education loan options. Consider factors such as interest rates, repayment terms, and eligibility criteria to identify the most suitable loan options for your needs.
- Evaluate different banks and financial institutions based on their interest rates, processing times, customer service, and reputation for reliability. This will help you select a lender that offers favourable terms and a streamlined application process.
- Complete the loan application form accurately and provide all the necessary supporting documents to demonstrate your financial capabilities. These documents may include proof of funds required for your education.
- Remember that each bank may have specific requirements for study loans for Canada. Therefore, it is advisable to approach multiple financial institutions to compare their offerings and choose the most suitable lender for your education loan.
By following this well-organised process and considering factors of quality and reliability, you can successfully navigate the application process for an education loan in Canada and secure the financial support you need for your studies.
Documentation Needed: Study Loan For Canada
- A document indicating acceptance into the university or institution (Admission letter)
- An application form for the education loan
- Passport-sized photographs of the student
- Academic records, including certificates and transcripts
- Documentation of qualifying exams such as GMAT or IELTS scores
- Proof of residency for both the student and guarantor
- The borrower’s bank statements from the past year
- Proof of income for the guarantor
Courses Eligible for Educational Loans in Canada for International Students
International students in Canada have access to educational loans from various types of lenders, including public and private sector banks, financial companies, and international funding institutes. These lenders primarily offer loans for full-time courses, and there are several programmes that are generally eligible for funding:
Undergraduate courses: Students pursuing bachelor’s degree programmes can apply for education loans in Canada.
Post-graduate courses: Loans are available for students enrolled in post-graduate programmes, such as master’s degrees or graduate diplomas.
Doctorate courses: Students pursuing doctoral programmes, including PhD or research-based studies, are eligible for education loans.
Post-graduate diploma programmes: Loans can be obtained for post-graduate diploma courses, which offer specialised knowledge and skills in a specific field.
While it is possible to obtain a study loan for short-duration programmes in Canada, it’s important to note that the likelihood of securing such loans from nationalised banks is generally low.
Additionally, it’s essential to consider the recognition and accreditation of your preferred institute. Lending institutions take into account the reputation and job-oriented nature of the courses you intend to pursue. Consequently, if you choose job-oriented programmes, the chances of obtaining funding through an education loan in Canada are typically higher.
Top Loan Providers of Study Loans For Canada
- HDFC Credila
- Avanse
- InCred
- Bank of Baroda
- Axis Bank
- Auxilo
- ICICI Bank
- Prodigy Finance
- Mpower Finance
- Credence
- IDFC First Bank
Expenses Covered Under A Canada Education Loan
The expenses covered by education loans can vary depending on the lender and the type of loan. However, in general, education loans can cover the following expenses:
- Tuition fees: The primary purpose of education loans is to cover tuition fees. Depending on the lender, the loan amount can cover the entire tuition fee or a percentage.
- Room and board: Education loans can also cover the cost of accommodation and meals if the student is living on campus or in a rented apartment. This can include rent, utility bills, and food expenses.
- Books and supplies: Education loans can cover the cost of books, study materials, and other supplies required for the course.
- Computer and equipment: Some education loans also cover the cost of a computer or other equipment required for the course.
- Travel expenses: Education loans can also cover the cost of travel to and from the educational institution.
Repayment Of Education Loan For Canada Studies
Repayment of education loans for Canada typically begins six months after the student completes their studies or drops below a part-time course load. The repayment amount is generally calculated based on the amount borrowed, the interest rate, and the repayment term.
Most lenders offer flexible repayment options, including paying back the loan in instalments or making additional payments to reduce the overall interest costs. Some lenders also offer interest-only payments during the grace period.
The Canadian High Commission Advises
The Canadian High Commission provides the following recommendations for demonstrating proof of funds:
- Preferred option: You can provide evidence of purchasing a special Guaranteed Investment Certificate (GIC) from a participating Canadian financial institution (bank) with a value of $10,000 CAD. This amount should cover your living expenses for the first year in Canada. Additionally, you should also submit proof of payment for your first year’s tuition.
- Alternate option: Instead of the GIC, you have the option to meet the financial requirement by submitting a copy of the receipt for the first year’s tuition fee. You also need to provide documentation showing that you have obtained an educational loan from an Indian lender amounting to $10,000 CAD.
These options are considered reliable and acceptable methods for demonstrating your ability to support yourself financially during your stay in Canada.
Tax Savings
Tax benefits can be availed by individuals on the interest paid towards their educational loans under section 80E of the tax code. This provision allows borrowers to claim tax benefits for the entire duration of the loan repayment, which typically spans over a period of seven consecutive years.
Educational loans serve as a valuable resource for academically gifted students who aspire to achieve their goals but face financial constraints. These loans enable students to pursue a high-quality education, even in the face of rising educational costs. However, it is advisable for students to carefully review the terms and conditions of the loan agreement before committing to it.
Now that students possess adequate knowledge about educational loans for studying in Canada, they can reach out to India’s leading loan providers and initiate the application process through UniCreds, a reputed platform for facilitating education loans.
Conclusion
Canada Student loans can be a great option for students who need financial assistance to cover the cost of education. Government-funded loans through the CSLP are typically more affordable, while private loans may offer more flexibility. Researching and comparing different loan options and providers before selecting a loan is important. Repayment terms can vary, but making timely payments can help you establish good credit and avoid defaulting on your loan.
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