In 2020, around 4,00,000 international students enrolled in Canadian post-secondary institutes. This figure is a testament to the top-notch education you can avail in Canada.
However, studying abroad is not cheap and if you have funding concerns, availing study loan for Canada is a viable option.
Here’s all the information on the education loan process for Canada studies.
The procedure to avail education loan for study in Canada needs knowledge of the aspects involved. Your focus should be on avoiding last-minute rush after the admissions.
Here’s the general process to acquire a student loan for Canada admissions:
Acquire the admit letter from your Canadian university
Analyze the cost of living and tuition fees
Segregate your finances into two categories – self and loan
Study the existing education loan options
Select the bank by considering aspects like interest rates, the processing time
Fill the application form with proof of required funds
Different banks have distinct study loan for Canada requirements. Hence, it is crucial to approach multiple financial institutes to shortlist the lender.
Eligibility Criteria for an Education Loan in Canada
Indian banks have specific requirements to clear study loans. So, be aware of these aspects before filing your application:
You must be an Indian citizen
The institute’s admission letter is mandatory
You must be over 18 years old
In the case of minors, parents require to apply for the loan
Overall, to get an education loan for Canada, the eligibility aspects need to be met. Hence, you can visit different banks and secure a loan before departure in a timely schedule.
List of Documents Necessary for an Education Loan in Canada
To complete all the loan formalities, you need to provide proof as per bank policies. Here are the documents required to avail education loan for study in Canada:
Proof of admission (Admission letter of the Canadian University)
Passport photos
Qualification exam scores proof
Copy of previous school/college mark sheets
Bank statement of the last year
Income proof
Proof of residence
Collaterals (if needed)
Banks can have different rules for student loan for Canada process. So, the document list can vary accordingly. Check the authentic documents as per your lender regulations.
Courses Covered under an Educational Loan
The education loan in Canada for international students is available from the following types of lenders:
Public and private sector banks
Financial companies
International funding institutes
All these bodies offer education loans, primarily for full-time courses. In general, you won’t face any issues if you pursue the following programs:
Undergraduate courses
Post-graduate courses
Doctorate courses
Post-graduate diploma programs
You can also get a study loan for Canada if you pursue short-duration programs. However, the likelihood of acquiring such loans from nationalized banks is low.
Moreover, you must remember that lending institutes also consider your preferred institute’s recognition. So, if you pursue job-oriented courses, the chances of funding from education loan for Canada are high.
Once you know how to get study loan for Canada, it is also vital to think about the best ways to repay this loan. Lenders give a repayment relaxation for the course duration and a period of six months after graduation. This implies that you can initiate the repayment after six months from the end of your program. You have a window of five to seven years for repaying the entire student loan from that moment.
Notably, choosing job-oriented courses can minimize the burden of repayment. In addition, education from prestigious Canadian institutes will improve your chance of landing high-paying jobs. This way, you can reduce the repayment of your education loan for Canada period.
Collateral is something valuable and tangible that you agree to give to somebody if you cannot pay back money that you have borrowed. You can avail of an unsecured education loan for Canada up to the limit of ₹4,00,000. However, opting for loans above this value requires collateral security.
Here are the conditions for collateral security:
Security equal to 100% of the study loan for Canada
Guarantee of a third person known to the bank
Document execution from both you and your parents
In terms of collateral security, you can show proof of land, public sector bond, LIC policy, gold, bank deposit, etc. Banks can also accept shares, NSC, or KVP as collateral.
On the other hand, you can contact private institutions like NBFCs (Non-Banking Financial Company) to receive an education loan for Canada. These organizations provide both secured and unsecured loans to students.
Tax Benefits
The study loan for Canada interest rate can influence your tax benefits. The interest paid on your education loan is allowed as a deduction from total income. This interest from education loan is included under section 80E. Overall, an education loan for Canada can help fund your studies and provide some fiscal benefits.
upGrad Abroad has collaborated with top universities of Canada including University Canada West, Trinity Western University and Yorkville University to offer blended BBA and MBA programs that help you gain foreign education at an affordable cost. To know more, get in touch with our counsellors
Frequently Asked Questions
How much time does an education loan application take to be processed?
Your education loan process duration ranges from lender to lender. For instance, some banks can approve your education loan for Canada in a short duration of 15 days. So, you can contact the desired branch to note the exact loan application processing period.
Can I take an education loan without collateral?
According to RBI guidelines, you can avail a study loan up to ₹4,00,000 without collateral. Beyond this point, you need to provide information on collateral security to the specific financial lender.
Why my application for the education loan is rejected?
In most cases, your study loan gets rejected due to wrong information on your collateral security. Hence, always check the type of collaterals that the lender accepts. For this purpose, read the loan document carefully.
What are some banks offering education loans for Canada?
Renowned banks like HDFC, State Bank of India, Axis, and Union Bank of India offer student loan for Canada. These banks offer a long tenure to repay the student loan. So, you can pursue your course and find an appropriate job to cover all the funding expenses.
