Canada, a global hub for international students, offers top-notch education and diverse opportunities. However, pursuing education in this vibrant destination comes with a considerable financial commitment, encompassing tuition fees, living expenses, and a mandatory CAD 20,635 Guaranteed Investment Certificate (GIC) deposit in banks like CIBC or SBI Canada. To address these financial challenges, many students opt for education loans. This blog aims to provide a thorough understanding of study loans for Canada, covering types, eligibility criteria, top loan providers, and more.

Types of Education Loans for Study in Canada

1. Collateral Loan (Secured Loan) 

This study loan type necessitates providing collateral as security. Tangible assets like land or intangible assets like life insurance serve as collateral, with government banks in India being primary providers of secured education loans for studying in Canada.

2. Non-Collateral Loan (Unsecured Loan) 

The second type of education loan for Canada requires no collateral. However, a co-applicant is necessary, and their income determines the loan sanction probability. Unsecured education loans are mainly provided by private lenders and some international institutions.

How to Secure a Study Loan for Canada?

Securing an education loan for Canada is a comprehensive process that should commence 6-7 months before the course begins. Here's a step-by-step guide:

1. Research: Explore banks offering student loans for international students in Canada, considering their eligibility criteria and required documents.

2. Calculate Total Expenses: Determine the total funds required for your chosen course in Canada.

3. Acceptance Letter: Obtain the letter of acceptance from your Canadian educational institution.

4. Compare Loan Options: Compare different loan options from various banks to make an informed decision.

5. Loan Application: Fill out the loan application form for your selected bank, finalizing the loan amount.

6. Review Loan Document: Carefully review the loan document issued by the bank before signing.

7. Loan Disbursement: After approval, the bank will disburse the agreed-upon loan amount.

What Expenses are Covered under an Education Loan?

Once the bank approves your education loan for studying in Canada, it will issue a loan document. The disbursed amount can be utilized for various expenses, including tuition fees, books, a laptop, accommodation, and other necessary items.

Can One get a Student Loan for Diploma Courses in Canada?

While secured and unsecured loans are available for postgraduate courses in Canada, securing a loan for undergraduate diploma courses is often limited to secured loans. The preference for secured loans is influenced by the perceived lack of employment opportunities after completing undergraduate diploma courses. However, the scenario differs for postgraduate diploma courses, which may face challenges in securing study loans due to their perceived non-mainstream status by many lenders in India.

Eligibility Criteria for Study Loan in Canada

Securing an education loan for Canada involves meeting specific eligibility criteria:

- Acceptance letter from a recognized Canadian institution for a full-time program.

- Age of 18 or above; if below 18, parents must apply for the education loan.

- A strong academic record enhances the chances of loan approval.

- The chosen course should be job-oriented or have good career prospects.

- For secured loans, you must be able to pledge some kind of collateral security to grant their study abroad loan for Canada.

Documents Required to Get Study Loan for Canada

Several documents are necessary for securing a study loan for Canada:

- Acceptance letter/proof of admission

- Student loan application form

- Passport-size photographs

- Identity proof (Valid Passport, Voter ID, Driving License, Aadhaar Card)

- Age proof

- Academic transcripts and certificates

- Exam scorecards (GMAT/GRE/IELTS/TOEFL)

- Permanent residence certificates of both student and guarantor

- Bank statements of the last year

- Guarantor’s proof of income (e.g., salary slip) 

Top Loan Providers for Study Loan in Canada

Several premier banks in India offer education loans for studying in Canada:

1. HDFC Credila Study Loan for Canada:

   - Offers up to 100% of funds for academic expenses.

   - Quick processing and flexible repayment options.

   - Coverage for all expenses related to international exams (IELTS, TOEFL, SAT, GMAT, GRE, etc.).

2. SBI Ed-Vantage Student Loan:

   - Interest rate as low as 8.00%.

   - Covers up to 90% of total tuition fees and non-academic expenses.

   - Loan amounts up to 1.5 Crores for studying in Canada.

3. ICICI Study Abroad Education Loan:

   - Offers funds up to 1 Crore under the 'iSMART' variant.

   - Comprehensive services, including Student Loans, GIC, Savings Account, and University Fee payment platform.

   - Interest rates range from 11.40% to 14.00%.

Repayment of Education Loan in Canada

Repayment of education loans in Canada can commence during the academic course or six months after completion. Fully paying off the loan before the course ends avoids interest charges. After the grace period, students receive documentation detailing interest rates and repayment amounts. In the case of a student line of credit from CIBC, it is converted into a personal loan a year after graduation. Students can extend the repayment period to a maximum of 20 years.

Education loans play a crucial role in realizing the dream of studying in Canada. By understanding the types of loans, eligibility criteria, and top providers, students can make informed decisions.

How to Apply for an Education Loan ?

Applying for an education loan independently can be a tedious and time-consuming process, requiring meticulous attention to detail and navigating through various procedures.

At Klassfin, we understand the challenges associated with this endeavor, and we are here to simplify the entire process for you. 

Our dedicated team takes on the responsibility of conducting thorough due diligence on your behalf, streamlining the application process, and ensuring that all necessary documentation is handled efficiently. 

Through our exclusive negotiations with financial institutions, we secure the best possible interest rates for your education loan. 

At Klassfin, our mission is to alleviate the burdensome aspects of the application process, allowing you to focus on your education while we take care of the financial intricacies.