Having been one of the most desired study destinations amongst international students for over a decade, Canada and its government offers a safe environment and enables the process of applying for a student education loan in Canada for international students in the country seamlessly.
International students can apply for education loans in Canada, in the same manner, permanent residents or Canadian citizens apply, with similar interest rates and repayment schedules. Student Education Loans in Canada are available in the form of credit lines and separate loans for international students.
Like every other education loan, one can use the money borrowed for tuition fees, legitimate educational expenses, accommodation, travel, and subsistence expenses.
Structure of Student education loan in Canada
Based on financial needs, education funds are allocated through Canada’s Student loan program & provincial student loan program. International students studying full time in Canada can receive up to 60% of the education cost via the Canada student loan program and the remaining 40% through the special student loans program (provincial).
As an international student in Canada, you would be able to obtain student loans for 3 or 4 years, depending upon on your academic program, along with an additional year in case of discrepancies in completing the course.
Documents required to apply for a Student Education Loan in Canada:
- Admission letter from university/institution (proof of admission)
- Loan application form
- Passport size photographs
- Academic records (certificates and mark sheets)
- Copies of qualifying exams (like GMAT, IELTS)
- Resident proof of the student and the guarantor
- Statements of borrowers bank accounts (last one year)
- Income proof of the guarantor
Eligibility Criteria to apply for an educational loan in Canada:
- One must be enrolled in a diploma, degree, or a certificate program with a course duration of a minimum of 12 weeks at an accredited institution.
- One must not have exceeded the financial assistance lifetime limit- the usual limit is 340 weeks.
- One should have an excellent academic record in either school level or undergraduate program level depending upon the program they enrol in at a Canadian institution.
Types of education loans in Canada
- The Private Student Loan
- The Federal Student Loan
The Private Student Loan
This education loan in Canada is either offered by a private financial institution or a bank and is credited to an international student’s account directly without the involvement of any institution or university. But, note that the university must provide necessary verification documents (enrollment) to the student who wants to take a student loan. Both international students and Canadian students can apply for this type of loan in Canada.
The Federal Student Loan in Canada
This is a government loan provided to students who want to pursue higher education. One primary criterion to avail this loan is that the institution or university must have verified or signed off the amount to be borrowed. After the approval, the entire confirmed amount will be credited to the institution’s account to ensure the loan is used only for academic purposes. Only Canadian domestic students can apply to this loan.
Education loan in Canada - checkpoints
It is ideal to research and find the list of education expenses covered by each education loan provider in Canada. Since private banks offer many schemes, one must check and pick a scheme that suits his/her financial needs. Apart from the tuition fee, the following are the expenses that could occur during your course tenure.
- Travel expenses
- Cost of academic materials
- Hostel fee
- Laboratory fee
- Laptop - if required for a particular course.
- Payments for study tours or project work.
Hence, international students looking for an education loan must opt from providers who include the checkpoints mentioned above in their schemes.
Tips for choosing an education loan in Canada
- Compare and pick the best: To ensure saving interest cost, compare all private loan catalogues to determine the least interest rate you qualify for. As a standard process, check whether the lender will allow delayed interest payments in some unavoidable circumstances. Also, ensure the easy availability of lender by email or phone if you encounter a customer service issue.
- Choose a fixed interest rate: Choosing a fixed interest rate will help reduce your interest rate that increases over time.
Additionally, get into the practice of using a Canada student loan calculator to determine the payment you are ought to pay after the stipulated years.
Consider refinancing in the future.
International students in Canada can refinance their student loans under the following circumstance:
Elevate your credit before refinancing:
For instance, if you study and work in Canada for over a while and build a top-notch credit profile, you can quickly refinance the private student loans to a considerably lower interest rate. In this case, you will be asked to show a higher credit score, proof of reliable income and on-time debt payments history.
Need assistance with securing a Student education loan in Canada? a Free consultation call with our counsellors to help make the process easier than ever.