How to take education loan in Canada

Canada is one of the most sought after country which offers the best courses to the students through its various universities. Along with academics, the country also offers diverse experiences and a dynamic student life. However, studying in Canada comes with a set of expenses such as tuition fees, accommodation, travel costs, etc. which require a decent amount of money. Among the many ways to ease finance while studying abroad, many students opt for education loans to ease the process of their education. In this blog, we will learn about the many education loans in Canada along with their eligibility and repayment plans. If you have any suggestion related to this blog then do share your opinion in the comment section below.

Courses for which banks offer loan to study in Canada

Banks provide education loans for various courses such as Bachelors, Masters and PhD programmes. Bank SPP Also provide loans for programmes. National banks do not provide loans for any professional, short term and diploma courses to study in Canada.

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List of banks offering education loan to study in Canada

Following is the list of banks offering education loan for study in Canada-

Name of bank Rate of Interest (ROI) Maximum Loan Amount
SBI 8.15% – 8.65% ₹ 1 crore
HDFC Bank 9 – 14% ₹ 20 lakh
Axis Bank 11.20% – 13.20% ₹7.5 lakh
Punjab National Bank 7.30% – 9.20% ₹10 lakh
Bank of Baroda 8 – 10% ₹80 lakh
ICICI Bank 7 – 11% ₹90 lakh
Canara Bank 7 – 10% ₹ 40 lakh
Allahabad Bank 7 – 11% ₹20 lakh
Syndicate Bank 8.25% – 11.25% ₹2 crore

Eligibility to get a loan in Canada

There is an eligibility criteria to get education loan in Canada which is listed below-

  • The applicant must be a citizen of India.
  • Applicants must have secured admission to a Canadian university.
  • Applicants must be above 18 years of age. If not, the parent has to apply for the loan.
  • Co-applicants are required to hold an account with Indian banks and have a stable financial position to support the loan.
  • The applicant should have a good academic background.

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Application Process

There are many factors to consider before approving a student loan, such as-

  • It is better if the applicant applies for the loan only after getting the admission letter from the university. To simplify the application process Leverage Edu from experts 1800 572 000 Contact on
  • Students should also have an idea of ​​the total expenses, including the cost of studying and living in Canada.
  • Cost may vary by university. Make sure you select the bank from where you want to avail the loan and get the best deal from it.
  • Also, calculate how much loan you need to take and how much you can afford on your own.
  • Loans offered by different banks can be compared on the following parameters:
    • Rate of interest
    • Processing Resource Fee
    • Expenses covered under education loan
    • loan processing time
    • Repayment Terms & Tenure
  • After selecting the bank, fill the application form and check the requirements of the bank.
  • It is always recommended to approach at least 2-3 banks for loans to ensure your chances.

required documents

Along with the eligibility criteria mentioned above, students should also check the following list of documents before taking an educational loan in Canada-

  • Proof of Admission: Admission letter from University/ Institute.
  • loan application form.
  • Passport size photo.
  • Income proof of the guarantor.
  • Academic transcripts (certificates and mark sheets).
  • Documents of qualifying test (GMAT, GRE, IELTS,
  • Resident proof of student and guarantor.
  • Statements of the previous year from the bank accounts of the borrower.

Expenses covered under the loan

This is an important factor that must be kept in mind while applying for an education loan. Since there are many student loan schemes offered by banks, it is always recommended to check which plan is best for you and fulfills your conditions. Different expenses are covered under different plans, so one should always check with the bank what all other expenses are covered in the loan scheme apart from tuition fees. The list of expenses includes:

  • tuition fee
  • travel expenses
  • Cost of purchasing books and other study material
  • lab fee
  • hostel fee
  • Purchase of Laptop (if required for the course)
  • Project work or study tour expenses.

tax benefit

Tax benefit under section 80E can be claimed on the interest paid on the entire loan amount. In addition, tax benefits can be claimed for seven consecutive years after the commencement of repayment of tax. Loan is a boon for meritorious students, students who can do something big in their life but are not able to get quality education due to high expenditure. However, it is necessary to carefully examine the terms and conditions of the loan agreement.

How to pay off your Education Loan to Study in Canada?

After finishing school, there is a nonpayment period of 6 months. No interest is charged on your loan during this period. When this period is over, you will need to start paying back your Canada student loan. The 6-month non-repayment period begins after you finish your last term of school, switch from full-time to part-time study, or leave school or take time off from school.

To pay before the expiry of 6 months

You can make payments on your loan at any time. You do not need to wait till the 6 months period is over. If you pay off your loan before the commencement of repayment, you will not have to pay any interest.

FAQs

Can international students apply for student loans in Canada?

Yes, although funding options are more limited than for domestic students, private student loans are available.

Are loans available to Canadian citizens?

Yes, Canadian citizens can check if they are attending an eligible school and therefore apply online.

Will there be a credit check?

Although most traditional lenders require applicants to have a good credit score, some lenders work the other way and take into account the borrower’s future ability to repay the balance.

Do I need a cosigner?

No. A co-signer is not required in Canada, although having a creditworthy co-signer can improve the interest rate offered to you.

Hope this blog has helped you in knowing the process to apply for education loan in Canada. if you want to study in canada Leverage Edu from experts 1800 572 000 Call us and book a free 30-minute session today.

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