Studying in Canada is a dream for many international students worldwide. The country’s top-notch universities and diverse experiences make it an attractive destination. However, pursuing higher education in Canada comes with a significant financial burden. Besides tuition fees and living costs, international students are also required to deposit CAD 10,000 as a Guaranteed Investment Certificate (GIC) in select banks. For many students, opting for an education loan is a suitable way to secure financial assistance to pursue their academic aspirations in Canada.
Within this all-inclusive manual, we will encompass all the essential information you require regarding educational loans for pursuing studies in Canada. This will include various types of loans, eligibility criteria, prominent loan providers, and additional relevant details.
Types of Education Loans for Study in Canada
- Collateral Loan in Canada: Collateral loans require the applicant to provide security in the form of tangible or intangible assets. These assets could include properties, life insurance, fixed deposits, or government bonds. Government banks in India typically offer secured education loans for study in Canada, with the loan amount depending on the value of the collateral provided.
- Non-Collateral Loan in Canada: Non-collateral loans, also known as unsecured loans, do not require the applicant to pledge any security. However, a co-applicant is usually required, and their income plays a crucial role in determining the loan approval. Private lenders and a few international banks, such as ICICI Bank and Axis Bank, offer unsecured education loans to students.
How to Get a Study Loan for Canada?
Obtaining an education loan for Canada is a time-consuming process, and it’s essential to start early, preferably 6-7 months before the course begins. Follow these steps to secure a study loan for Canada:
- Research and Compare: Research banks that offer student loans for international students in Canada, along with their eligibility criteria and required documents. Compare the different loan options to make an informed decision.
- Calculate Required Funds: Determine the total funds needed for studying in Canada based on the course you wish to pursue.
- Obtain Letter of Acceptance: Obtain an acceptance letter from your chosen Canadian college or university for a full-time program.
- Choose a Bank and Apply: Finalize the bank and loan amount, and fill out the loan application form.
- Review Loan Document: After the bank approves your application, carefully review the loan document before signing.
- Loan Disbursement: Once all formalities are complete, the bank will disburse the approved loan amount, either in segments or as a lump sum.
Expenses Covered under an Education Loan
Understanding the expenses covered by your education loan is crucial when applying for financial assistance. With numerous student loan schemes available from various banks, it is essential to assess which scheme aligns best with your requirements. Different loan schemes encompass different expenses, so it’s advisable to inquire with the bank about additional covered expenses apart from the tuition fee. The following list outlines the expenses typically covered:
- Tuition Fee
- Travel Expenses
- Cost of Books and Study Material
- Laboratory Fee
- Hostel Fee
- Purchase of a Laptop (if required for the course)
- Expenses for Project Work or Study Tours
Keeping these expenses in mind will help you make informed decisions while opting for a student loan for Canada.
Collateral Requirements for Education Loans
When the loan amount exceeds INR 7.5 lakh, it is necessary to provide tangible assets as collateral security. Additionally, for all education loans, parents are mandated to be co-borrowers.
Can One get a Student Loan for Diploma Courses in Canada?
Securing education loans for undergraduate diploma courses in Canada can be challenging. Banks often prefer to invest in master’s courses due to better employment opportunities post-graduation. However, education loans for postgraduate diploma courses in Canada are relatively more accessible. The lack of awareness among bank officials about the viability of PG Diploma courses and their limited availability in Canadian colleges are contributing factors to this issue.
Eligibility Criteria to Get Study Loan for Canada
To be eligible for an education loan in Canada as an international student, you must meet certain requirements:
- You must have an acceptance letter from a recognized Canadian institution for a full-time program.
- The applicant should be 18 years or above. If below 18, parents must apply for the education loan.
- A strong academic record is beneficial but not compulsory.
- The chosen course should be job-oriented or have good career prospects.
- For secured loans, you must be able to provide collateral security.
Documents Required to Get Study Loan for Canada
When applying for a study loan for Canada, you will need to submit the following documents:
- Acceptance letter/proof of admission
- Student loan application form
- Passport size photographs
- Identity proof (Valid Passport, Voter ID, Driving License, Aadhar Card)
- Age proof
- Academic transcripts and certificates
- Exam scorecards (GMAT/GRE/IELTS/TOEFL)
- Permanent residence certificate of both student and guarantor
- Bank statements of the last one year
- Guarantor’s proof of income (e.g., salary slip)
Top Loan Providers for Study Loan in Canada
Several premier banks, both government and private, offer education loans for Canada. Here are some of the top loan providers:
- HDFC Credila Study Loan for Canada: HDFC Credila offers up to 100% funding for academic expenses, with a quick turnaround time and flexible repayment options. It covers international exam expenses like IELTS, TOEFL, SAT, GMAT, GRE, etc.
- SBI Ed-Vantage Student Loan: SBI Ed-Vantage offers education loans for various countries, including Canada, with interest rates as low as 8.00%. It covers up to 90% of tuition fees and non-academic expenses.
- ICICI Study Abroad Education Loan: ICICI offers study abroad loans, including those for Canada, and helps with the purchase of GIC. It provides various additional services for students studying abroad.
Repayment of Education Loan in Canada
You can start repaying your education loan during the course or within 6 months after its completion. If you can repay the loan before the course ends, banks may waive off the interest. After the grace period, students receive detailed documentation from the government regarding interest rates and repayment amounts owed. The repayment period can extend up to 20 years.
Can I get an education loan for studying in Canada?
Yes, you can obtain an education loan for studying in Canada. The loan amount can go up to 1.5 Crores based on your profile. To explore your options and eligibility.
How much funding can I get for education in Canada?
You can avail up to 1.5 Crores as a secured loan and up to 50 lakhs as an unsecured education loan to study in Canada.
What are the requirements for education loans in Canada?
Applicants for education loans in Canada should be Indian nationals who have obtained admission to a recognized Canadian university.
How much money do I need to study in Canada?
To study in Canada, you require tuition fees and approximately 6 lakhs per annum for living expenses. Additional miscellaneous expenses may apply.
Can I get an education loan for Canada without collateral?
Yes, you can obtain education loans of up to 75 lakhs without pledging collateral for studying in Canada.
How can I finance my study in Canada?
You can finance your study in Canada by applying for various scholarships or opting for an education loan.
Is it possible to get a 20 lakhs education loan without collateral for Canada?
With a suitable co-applicant, you can secure an education loan of up to 75 lakhs without collateral for studying in Canada.
What is the required bank balance for a Canada student visa?
To apply for a Canada student visa, you need to disburse one year’s tuition fee to the university and create a Guaranteed Investment Certificate (GIC) equivalent to one year’s living expenses.
Can I use an education loan to cover the GIC amount?
Yes, most education loans offered by banks cover the GIC amount along with other expenses. For hassle-free pre-Visa disbursement.
How much money is needed for the GIC in Canada?
Students are required to deposit one year’s living expenses, which is approximately 6 lakhs or 10,000 CAD, for the GIC in Canada.
Education loans provide a significant opportunity for aspiring international students to pursue higher education in Canada. By following the proper steps and meeting the eligibility criteria, students can secure the financial support needed to turn their study abroad dreams into reality.
Researching and choosing the right loan provider is crucial, and with proper planning, studying in Canada can become an achievable goal for many students.