锘� Everything you need to know about Education Loan to Study in Canada.

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Education Loan to Study in Canada

The biggest challenge international students have to deal while pursuing educational degrees in Canada is an arrangement for funds. Studying abroad is no doubt costlier than studying in the home country. Cost of studying in Canada is also expensive and it is difficult for many international students to afford it. 

If you are the one who is wishing to pursue your further education in Canadian universities, you can take an educational loan and repay it with interest later on. In this article, we are presenting you with complete information about Education Loan to Study in Canada.

Process for Applying for an Education Loan

The student loan application is a lengthy process. You should start applying for the Study Loans for Canada as soon as you get the acceptance letter from the university you have applied to. A Student Loan application is a complex, tedious process, and it should be approached carefully. Once you are accepted at a University, you will get an idea of the education and living expenses for study in Canada.

How to get the Education Loan to Study in Canada?

International Students looking forward to studying in Canada with the help of an education loan must start their process at least 6-7 months before their course begins. Here is the stepwise you need to follow for applying for a student loan:

 

  1. Research about the banks providing international education loans for Canada, it’s eligibility and document requirements.
  2. Calculate the total fund requirement for studying in Canada.
  3. Get a letter of acceptance from the admission office of the respective university in Canada.
  4. You should compare the different loan options provided by the different banks for studying in Canada and select the one which suits your needs.
  5. Once you select the bank and finalise the loan amount, you need to fill the loan application form.
  6. Submit the documents such as identification proof, letter of admission security and collateral documents, etc
  7. Once the bank grants the permission for your loan, it will issue a loan document which needs to be signed.
  8. After signing your loan agreement, the bank will disburse the amount to you as agreed.

Now we will present each step in detail. Go through each step thoroughly and take note of the important points, as it is a big decision which will affect your further financial life.

Research about the banks and loan options

Your process begins with researching different banks and loan options. But before you start your research, there are few elements you should take into account:

Factors to consider for education loan to study in Canada

Before applying for a student loan to study in Candian universities, you should have a clear picture of how much fund you will require and how much you are going to manage on your own. Other important factors are:

  • Decide on the university and course you want to study in Canada.
  • Calculate the total amount you will require to study abroad in Canada.
  • Make the list of all the documents and collect them accordingly to submit during the application.
  • Make sure to be ready with the collateral or guarantor.
  • Make sure to apply for the international educational loan before the three months before applying for a student visa for Canada.
  • Estimate the time of fund disbursement.

Once you are ready according to the above-mentioned things, check your eligibility for an education loan to Study in Canada. Here are the criteria:

Eligibility criteria to apply for an education loan to study in Canada

There are some basic eligibility criteria to apply for a Study Loan for Canada. You should consider these factors before applying for a loan:

  • The student must have applied and been accepted in a recognised Canadian institute for a full-time program.
  • The applicant must be 18 years. If the applicant is younger than 18, the parents will have to apply.
  • The applicant must have a fantastic academic record.
  • The applicant must be admitted into any of the job-oriented study programs in Canada.
  • The applicant must be able to pledge some form of collateral security against the study abroad loan for Canada, such as shares, gold, bank deposits or government securities.

Calculate the amount required to study in Canada

It’s time to estimate the fund requirements for your studies in Canada. Before deciding on a scheme, you should check the inclusions, the expenses that are covered in the loan, and which are not. These are some of the expenses that are included in different types of Study Loans for Canada:

  • Tuition Fees - The academic fee for each academic period in the universities of Canada.
  • Accommodation / Hostel Fees - This expense includes on-campus or off-campus living expense. For example Rent expense, price of Regular meals, etc
  • Travel Expenses - These expenses include airfare, parking permit, monthly bus/train pass etc
  • Cost of Study Materials - Purchase of books, stationery and laptop/computer.
  • Other expenses that are included in the study program of Canada

Estimating the Cost of studying in Canada is one of the important steps. Once you get your final amount, you have to check with your savings as to how much you will be able to pay on your own and how much you will require to take a loan. 

Get the letter of acceptance from the Candian University

The universities in Canada accept international students thrice a year. Fall, Winter and Summer Intakes are for overseas students. You have to apply to the Universities and get your letter of acceptance from the university. You can show this as proof while applying for the education loan: The top universities in Canada are listed below:

  1. University of Toronto 
  2. McGill University 
  3. University of British Columbia 
  4. University of Montreal 
  5. University of Alberta 
  6. McMaster University 
  7. University of Waterloo 
  8. Western University 
  9. Queen's University at Kingston 
  10. University of Calgary

The list does not end here, there are many best universities in the country. So you have plenty of options in Canada where you can pursue your further studies. You will get full information here: Universities in Canada

Comparison of Education loan options

You should compare the different loan options provided by the different financial institutions for studying in Canada. Check out which banks are giving you the best deals on study loans and decide. Here are some of the parameters that you can apply to understand the Loan process and decide the best study loans for Canada:

  • Processing fee of the Study Loan
  • Prepayment terms, conditions and Loan Duration
  • Processing Time
  • Interest rate on repayment
  • Expenses Covered.
  • Loan margin
  • Moratorium Period
  • Tax Benefits 
  • Loan Duration 

Each factor is important, so take your time and choose wisely. If you decide after careful planning and comparing you will be able to save a few dollars.

International Education Loan application form.

In this step, you will start the process of applying for your education loan for Canada. Once you finalise the bank and amount of loan you will require, you have to fill the loan application form. You can apply online or offline according to the bank facilities. You must fill the application form accurately and truthfully. 

 

In the application form you will have to fill your Full name, parents name, residential address, date of birth, information of ID proof, course name, duration of the courses, name of the university, Income, Liabilities, employment details, type of security, tuition fees, statement of other expenses etc. Fill each and everything you are asked in the form correctly and recheck it before submitting.

Submit the documents

Here is the list of documents required while applying for an Education Loan
Keep in mind that every bank will have different student loan requirements. These are the general documents required for Study Loans for Canada:

 

  • Proof of Admission / Acceptance Letter
  • Student Loan Application Form
  • Passport Size Photographs
  • Identification proof such as Valid Passport, Voter’s ID Card etc.
  • Proof of Age. You can present your Birth Certificate as evidence.
  • Academic Mark Sheets, Certificates and Degrees
  • Exam scores (GMAT / GRE / IELTS / TOEFL)
  • Residence proof of both Student and Guarantor
  • One year statements of the bank
  • Guarantor’s income Proof.  For example Salary slip.

Other Optional Documents

  • Official Certificate of Minority Caste.
  • Certificates of Extra-curricular activities 
  • Documents regarding any disability or illness

Courses for which banks provide a loan to study in Canada?

There are loans available for bachelors, masters and research programs. The banks prefer to provide loans to the students who are pursuing more job-oriented studies at Universities for obvious reasons. Moreover, it is always preferred that you enrol for a full-time course at a Canadian University.
For SDS colleges and Universities, you are required to have CAD10000 in the Scotia Bank of Canada.

Education loan agreement to study in Canada

Once your international education loan application is approved by the bank, it will issue a loan document. The document will have all the terms and conditions of the education loan along with the basic details. 

The information mentioned is the borrower’s name, agreed loan amount, the period of repayment, interest rate, the signature of both the parties, collateral security details etc. Read all the elements properly and if you agree with those, sign it.

Disbursement of the student Education loan

After signing your loan agreement for Canada, the bank disburses the amount. It will pay the amount to you in instalments or lump sum as per agreement. In some cases, the bank may pay the tuition fee directly to the respective university. Once you receive your amount, spend it on the necessary expenses such as tuition fee, books, purchasing laptop, accommodation etc.

Collateral Rules for a student loan to Study in Canada

What is Collateral?

The security provided against the education loan is referred to as collateral. It can be any property either movable or an immovable, which is accepted by the bank. The biggest benefit of education loans with collateral is paying low-interest rates. The interest rate of education loans to study in Canada depends directly on collateral availability.

How much collateral is required for an international education loan for Canada, is very subjective. It varies from bank to bank. Moreover, the academic record of the student and their scope of future employment are also considered. Most of the banks ask for collateral security to reduce their risk.

Instruments used as collateral: 

  • Immovable property such as a house, a residential flat, a plot with defined boundaries, an independent house, a non-agricultural land, etc
  • Any liquid asset such as  Fixed Deposits, government bonds, life insurance policies from government-approved lenders.
  • Third-Party’s Assets: This third-party essentially refers to individuals who are not part of the candidate’s immediate family. For example friends of the applicant, Uncle, aunt, or the primary co-applicant, etc.
  • Even gold, mutual fund units, debentures etc can also be accepted as collateral.

 Student loan without collateral to study in Canada are also provided by some NBFCs at high-interest rates. To get an international private loan, students don’t need collateral but instead, they will need a Guarantor. 

Guarantor for a student loan to study in Canada

A guarantor is required for getting an international education loan. It could be a parent or family member. The bank will check the background of the guarantor’s credit history thoroughly before accepting or denying your education loan application.

There are a few important things bank will examine before granting loan:

  • The repayment capacity of the student's parents/family/Sponsor.
  • The representative of the bank will verify your property provided as collateral and prepare a report.
  • The loan providing institution will also calculate the value of your property. Depending on the report, the loan amount and other terms and conditions will be decided by the bank. 

Repayment of Education Loan

The repayment of Student loans for Canada starts six months or one year after your study program is over. The repayment duration can be five to ten years from then. However, the repayment duration can vary with banks. For Example, SBI Ed-vantage has a repayment duration of 15 years.

You should also read these articles:
Accommodation in Canada for International Students
Cheapest Places to Study in Canada for International Students
Admission Process to visa: Study in Canada 

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