Exploring higher education opportunities in Canada can be an exciting journey, however, navigating its financial aspects can be daunting. It is not beyond the reach of every aspirant student to live and study in Canada. That’s when an education loan comes into play, offering a pathway to make your academic aspirations a reality. In this comprehensive overview, we’ll take you through everything you need to know about securing an education loan for studying in Canada.
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Courses for Which Banks Provide Education Loans in Canada
The banks provide funding to students who want to apply to reputable universities for undergraduate, graduate, or research degrees. SDS Colleges can also obtain loans from banks. Vocational, short-term, and diploma courses are typically not eligible for education loans from nationalized banks. Banks often give preference to loan disbursing for career-oriented courses since they constantly think about getting their money back in full from the student making the request.
Types of Education Loans for Study in Canada
| Loan Type | Features |
|---|---|
| Secured loans | Collateral must be provided; it might be either moveable or immovable property. |
| Have lower interest rates | |
| Provided by public or private sector banks | |
| Unsecured loans | Do not need to provide any collateral |
| Interest rates are higher | |
| Banks and NBFCs may approve higher loan amounts | |
| Sanctioning depends mainly on the reputation of the institute, credit score/financial stability of the co-applicant, career prospects of the applicant |
How to get an Education loan to Study in Canada?
As soon as your university sends you an acceptance letter, you should apply for a loan. This letter will help you estimate the amount of money you will require to pay for your educational and living expenses while studying in Canada.
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When filling out an application for an education loan, keep the following things in mind:
- Examine loan offers from several institutions. To choose the most reasonably priced option, you can look at the following factors:
- Interest rate
- Processing fee
- Loan tenure
- Moratorium period
- Expenses covered under the loan
- Prepayment terms
- Submit all the necessary documents. These include:
- After approval, your bank will send you a loan sanction letter; keep this letter secure.
- Examine the loan agreement thoroughly before you sign it.
- For your records, preserve a copy of the loan agreement and disbursement letter.
Education Loan for Study in Canada Requirements
To get a study loan for Canada, an applicant must provide a list of supporting documents to the banks. The following is a list of the paperwork needed to apply for an education loan:
- Admission letter from university/institution (Proof of admission)
- Loan application form
- Passport size photographs
- Academic documents (certificates and mark sheets)
- Documents of qualifying exams (like GMAT, IELTS)
- Resident proof of the student and the guarantor
- Statements of borrowers’ bank accounts (last year)
- Income proof of the guarantor
Education Loan for Canada Eligibility
Different banks have different requirements for eligibility. For instance, a co-signer may be required by some banks, while collateral requirements may apply to others. Knowing a bank’s qualifying requirements will assist you in assessing your chances of being approved for a loan from them.
To obtain a loan from any bank, you must meet a few requirements. Among them are:
| Particulars | Requirements |
|---|---|
| Citizenship | The applicant must hold citizenship of the country to which he/she belongs. |
| Age | The loan applicant must be older than eighteen (18), or their parents must apply on their behalf. |
| Admission | The applicant must have secured admission to a recognized university/college in Canada |
| Program | Preference is given to professional & technical courses |
| Academic Record | The applicant must have an excellent academic record |
Expenses Covered Under Education Loan
One of the most crucial things to remember when applying for an education loan is this. Since banks offer a variety of student loan programs, it is usually advisable to determine which program best meets your needs. It is generally advisable to check with the bank about what other expenses, aside from the tuition fee, are covered under the loan programme, as different schemes cover different fees. The list of costs consists of:
- 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
FAQs:
The following are crucial considerations when applying for a Canadian student loan without collateral or security:
- The co-applicant needs to have decent credit.
- excellent profile and academic record.
- admission to a reputable university or college that can aid in your employment search.
- Remember that different lenders may have different qualifying standards and loan terms, so it’s important to thoroughly consider your options and compare offers to choose the one that best fits your particular situation.
Student loan interest rates in Canada can vary from 6.5% to 14%. Furthermore, these interest rates could alter under modifications to bank policies.
With the exception of doctorate students, who are eligible for 400 weeks of interest-free repayment, most students in Canada are able to obtain student loans for up to 340 weeks. It is 520 weeks for students with impairments.