Canada is the fourth most popular destination among international students. Study in Canada is far more economical when compared to the other popular international education destinations like the US and the UK. Lenient permanent residency, simpler application processes, and opportunities after graduations are among the many reasons why students choose Canada.
Average cost across courses in Canada varies, and some students may needs the assistance of loans to meet this expense. In this blog, we will discuss how as an Indian student you can apply for loan in Canada, whilst answering some of the regular questions we get asked from students discerning Canada.
Process of applying for a loan
- After receiving an admission letter from the university, you should receive on outline of the total cost including the tuition fee and living expenses.
- This will give you an estimate of the expenditure you will have to incur.
- Using this information you will be able to determine how much funds you can arrange for by yourself. This will help you determine how much loan you would need.
- There are a number of banks willing to lend help to students to meet their dream of study abroad. To select the right bank you would most likely compare the
- Interest rate
- Processing fee
- Expenses covered under the education loan
- Loan processing time
- Prepayment terms and duration
- After selecting the bank you will have to start with the application process.
- The process can be time consuming and involve lengthy documentation. We recommend you consider a couple or more banks for a loan.
With the number of students applying to study in Canada the process for loan application and eligibility are stringent. Mentioned is a list of documents you are required to produce to a bank-
- 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 one year)
- Income proof of the guarantor
Courses for which banks provide a loan to study in Canada?
- Banks provide loans to student at undergraduate, masters or research level programs.
- Loans are sanctioned to students being admitted into recognized institutions.
- Banks also provide loans for SPP programs.
- Loans at nationalized banks are not offered for vocational, short-term or diploma courses.
- A student is more likely to receive a loan if they are pursuing job-oriented courses.
Eligibility criteria to apply for an education loan to study in Canada
- The student/guardian/parents applying for a loan must be an Indian citizen.
- The student should have received admission at a recognized foreign university/institution.
- The student should be of age 18 years or above to apply for a loan else their guardian or parent must apply for a loan on their behalf.
- The student should be admitted to a professional course.
- After six months or a year of being employed, the bank commences the repayment of the loan.
- The entire loan amount has to be paid in 5 to 10 years from the commencement of repayment
- Terms and conditions of repayment vary across banks
Expenses covered under Education Loan
Banks offer lucrative schemes covering varied costs covering study abroad, and this should be of utmost importance while applying for an education loan. There are multiple options available with banks but it is for you to decide and pick the scheme that best suits you.
Loan amounts exceeding 7.5 Lakhs would require you to pledge tangible collateral. A parent or guardian can be co-borrowers with the student. Listed are the common expenses bank cover under their education loan
- 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
- Collateral Rules
- Under section 80E benefits of tax can be claimed on the interest paid on the entire loan amount.
- Tax benefits can be claimed for seven years from the commencement of loan EMI’s
Loans are boon for students to reach their desired education destination but due to rising cost are not able to gain the quality education. However, it is recommended to carefully check the conditions of the loan agreement.
So, when should you start collecting funds?
We would like to assume that while deciding your country of study, you would have computed a rough cost estimate of what the living and studying in that specific country would cost. If you picked Canada amongst other countries and have no idea when to start collecting funds, here is the guide.
On being accepted to a Canadian university you would receive a letter of admission. The university will provide you with a skeleton of the estimated costs. This is the time you start preparing for funds, if you have not already.
Along with the study permit, you will be asked to share the proof of meeting your living expenses while in Canada. You will need to provide a proof of CAD 10,000 or CAD 11,000 if the study is in Quebec. Note that this cost is exclusive of your tuition fee for your course of choice.
However, university representatives attribute this cost to being higher that the mandate needed for the study permit.
Have more questions? Reach out to our international education counselors, today.