Education Loan for Studying in Canada

Education Loan for Studying in Canada

Education loan for Canada involves visiting top banks in India (nationalised and private-based), finding eligibility criteria, updating the application process, etc. But to actually get a study loan for Canada, you must plan your financial expenses ahead of time. You should not be liable to any bank or NBFC. Once you have gathered all your resources, you are good to start with the education loan process for Canada.

Since Canada is one of the favourite study destinations among international students, getting an education loan for Canada is hassle-free. The process is simple. The student must deposit CAD 10,000 as a Guaranteed Investment Certificate (GIC) in CIBC, SBI Canada or any other designated bank besides the tuition fees and cost of living and follow the process depending on the SDS and non-SDS visa. Let's explore them now!

The Canadian High Commission - To Study in Canada

As per the Canadian High Commission, students must produce proof of funds to study in Canada. An amount of $10,000 CAD needs to be deposited to bear the living expenses for the first year of study. This evidence of a special Guaranteed Investment Certificate (GIC) is mandatory from a participating Canadian financial institution (bank). This can be received from Scotiabank, SBI Bank Canada, ICICI Bank Canada, and other designated banks.

Education Loan for Canada - Cost of Studying in Canada for International Students

Education Loan for Canada:Cost of Studying in Canada for International Students

Unlike the US, the cost of studying in Canada for international students is relatively cheap. As Canada is well known for its affordable tuition fee, many students prefer an education loan for Canada and get a world-class education at a lower tuition fee. Let’s quickly look at the table below having the cost of studying Canada for Indian students.

S No Type of Study Cost Cost in Canadian Dollar Approximate Cost in NR
  (UG/PG)   (Indian Rupees)
1 Canada Visa Application Fees $73.72 CAD INR 4,500
2 Canada College Application Fees $180.21 CAD INR 11,000
3
Entrance Exam Fee
$229.35 CAD INR 14,000
4
Undergraduate Courses
Upto $26,539.56 CAD
Upto INR 16,20,000
5 Postgraduate Courses $15645.24 CAD
INR 9,55,000

Types of Education Loan for Study in Canada

There are mainly two types of education loans for study in Canada as follows.

1.Collateral Loan or Secured Loan
2.Non-collateral Loan or Unsecured Loan

Collateral Loan or Secured Loan

Collateral loan or secured loan to study in Canada requires the student to produce certain collateral as security. The collateral for an education loan for Canada is: 

  • Tangible assets like non-agricultural land, a house or flat, or any other premises.
  • Intangible assets like a fixed deposit, shares & bonds, life insurance, etc. 

Most top nationalised and private banks in India lend a secured education loan for study in Canada. Depending on the collateral security a candidate produces, the (minimum or maximum) loan amount under the government bank education scheme is granted. 

Non-Collateral Loan or Unsecured Loan

In a Non-collateral loan or unsecured loan, the candidate does not need to produce any tangible or intangible asset, but a co-applicant needs to submit their income details to avail of such a loan. Since it is another type of education loan for Canada, many private lenders and a few international banks came to the rescue. Generally, for a student loan for Canada in India, plenty of unsecured loans are available from NBFCs and top private banks like ICICI Bank, HDFC Bank, Axis Bank, etc.

Eligibility Criteria for an Education loan for Canada

The main eligibility criteria for an education loan for Canada in an Indian-based nationalised and private banks are as follows:

  • The loan applicant must be a citizen of India.
  • The loan applicant must attain 18 years of age. If the applicant is below 18 years, his/her parents need to apply for the loan.
  • The candidate must possess a secured admission in a foreign institution like a university or college. 
  • The applicant must possess a secured admission in a professional course. 

Please note that a CIBIL score of 750 points or more with a good property is an easy way to get loan approval. 

How to get a study loan for Canada?

Students must follow the below process to get a study loan for Canada. However, it will take around 6 - 7 months. 

  • Find the nationalised and private banks providing a student loan for international students in Canada and check their eligibility criteria and documents required.
  • Check the total fund amount required to study in Canada, including tuition fee, miscellaneous expenses, etc.
  • Receive the Letter of Acceptance or Acceptance Letter from your college or university applied to. 
  • Compare the different loans offered by various banks and choose the appropriate one.
  • Once you select the bank, fill out the loan application and submit the documents requested.
  • After all formalities are complete, the bank will issue a loan statement. Go through it thoroughly and clarify doubts (if any).

Required Documents for an Education Loan for Canada

Required Documents For an Education Loan for Canada

For an education loan for Canada, the required documents a student must bring are:

1.For the proof of admission - Acceptance letter or Letter of Acceptance
2.Loan Application form
3.Identity proof including a valid passport, Adhaar card, Driving licence, Voter’s ID, Ration card)
4.A passport size photograph (based on Canada standards)
5.Exam scorecards including IELTS, TOEFL, GRE, GMAT
6.Academic records, certificates and transcripts
7.Extra-curricular activities certificate
8.Disability certificate
9.Age proof
10.Entrance exam results (if applicable)
11.Guarantor’s income statements like their salary pay slip, PAN Card, IT returns.
12.Bank statements of last one year
13.Permanent residents proof - both the student and the guarantor
14.Documents of the property being mortgaged (if any)
15.Minority community certificate (if applicable)
16.Any other documents required.

Types of Lenders Offering Education Loan to Study in Canada

There are mainly four (4) types of available lenders offering an education loan to study in Canada. They are:

  • Public-sector banks
  • Private-sector banks
  • Non-banking financial companies (NBFCs)
  • International lenders

Public-Sector Banks

Public sector banks or government-owned banks provide education loans for study in Canada with an assistance program. The students applying for a study loan must adhere to their guidelines and process. For overseas studies, the maximum loan limit is up to INR 1 crore with a certain interest rate. Once the student’s documents are verified, the loan amount will be approved on time. Some of the prominent public-sector banks are State Bank of India (SBI), Bank of Baroda, Union Bank, Punjab National Bank (PNB), etc.

Private-Sector Banks

Private-sector banks provide an education loan faster than the public sector banks. They are flexible in terms of required documents, mode of payment, timeline, etc. Since public sector banks impose certain conditions and stick to it, many Indian students choose private sector banks to get an education loan for Canada. Moreover, they provide a greater loan amount with less or no collateral. They also provide an attractive interest rate. Some of the top private sector banks are HDFC, ICICI Bank, Axis Bank, Kotak Mahindra Bank, etc.

Non-Banking Financial Companies (NBFCs) 

Non-Banking Financial Companies (NBFCs) offer an education loan for Canada and other countries. Here, students can learn the basic financial assistance program and submit a limited set of documents, the hassle-free application process, and so on. But, they may ask for more collateral based on the credit score and the course's tuition fee. Please remember that NBFCs do not accept a moratorium on the payment of EMIs on education loans and set a higher interest rate than the normal banks. Some of the best NBFCs are Education Loan Provider - Avanse, HDFC Credila, InCred, Tata Capital, and more.

International Lenders

Many students do not know that international lenders offer education loans to study abroad. Since most of the applicants go for an education loan for Canada, they generally prefer a bank or an NBFC, but an international lender provides a similar form of a study loan. Here, the eligibility criteria and documents required are different. Some of the best international student loan lenders are MPower Private Student Loan, Prodigy Private Student Loan, and Sallie Mae Private Student Loan.

Top Loan Providers for an Education Loan for Canada

Top Loan Providers For An Education Loan For Canada

Which bank is best for an education loan for Canada? Well, there are the top 3 banks (loan providers) best in terms of interest rates, repayment period, and quick approvals. They are:

  1. ICICI Study Abroad Education Loan
  2. HDFC Credila Study Loan for Canada
  3. SBI Ed-Vantage Student Loan

ICICI Study Abroad Education Loan - ICICI Bank offers a study abroad education loan which is one of the best. Their service covers student loans, an easy university fee payment platform, GIC, and savings account. The maximum loan amount is 1 Crore under the ‘iSMART’ with an interest rate starting from 11.30% to 14.30%. Moreover, it offers additional in-flight expenses, travel cards, forex services, and other remittance services.

HDFC Credila Study Loan for Canada - The HDFC Credila offers a 100% study loan for Canada of up to 36 lakhs. It is one of the best because it provides flexible repayment options. In this HDFC Credila study loan for Canada, you can cover even your eligibility test expenses like IELTS, TOEFL, GRE, SAT, etc. 

SBI Ed-Vantage Student Loan - SBI Ed-Vantage Student Loan is an education loan for Canada and other foreign countries, offering up to 1.5 Crores. It is in the top 3 loan lenders because its interest rate is only 8.00%, lower than other banks. It covers almost 90% of the course tuition fees and other non-academic expenses. 

Scholarships for Students

Apart from loans, scholarships provide a much easier route to finance your studies in Canada. Since many institutions in Canada accommodate a large number of international students, they supposedly offer scholarships to talented students. Even though it is a tedious process and not guaranteed, students must give it a try. If they get through, there’s nothing to stop them from pursuing their desired course. 

Also Read: Difference between SDS and Non-SDS Visa Applications

How To Get an Education Loan for Bachelor’s Degrees in Canada?

To get an education loan for bachelor’s degrees in Canada, all you need to do is fulfil the KYC norms and submit documents, including the admission letter from the college/university, property mortgaged, academic marksheets, tuition fee lists, bank statements, etc.

How to Get an Education Loan for MS Courses in Canada?

Since MS courses are professional courses in Canada, they demand more tuition fees. To get an education loan for MS courses in Canada, you need to fulfil their requirements:

  • Admission letter from university/institution (Proof of admission)
  • Documents of qualifying exams (like GMAT, GRE, SAT, IELTS)
  • Loan application form
  • A Passport size photo
  • Academic documents (certificates, transcripts and mark sheets)
  • Age and resident proof of the student and the guarantor
  • Bank statements of borrowers (previous one year)
  • Income proof of the guarantor

Once it is successfully verified, the bank will deposit the loan amount into your account.

How to Get an Education Loan for MBA Courses in Canada?

There are two (2) types of education loans for MBA courses in Canada, namely, secured education loans and unsecured education loans. Students who prefer a secured loan must produce a valid asset to the bank. Whereas for an unsecured loan, a student’s co-applicant needs to show proof of income. The interest rates vary depending on the public sector banks, private banks and other financial institutions like NBFCs.

How to Get an Education Loan for PG Diploma Courses in Canada?

To get an education loan for PG diploma holders in Canada, the applicant must adhere to the respective bank's guidelines and fulfil their requirements. If they are going for a secured education loan, they must submit a tangible or intangible asset. For example: a house/flat. In unsecured education loans, the applicant’s dependent or co-applicant must meet the KYC norms and produce necessary documents.

Top Colleges and Universities in Canada for Education Loan

Like the United States, there are top colleges and universities in Canada considered the best for education loans. Please refer to them from the table below.

S No College / University Name in Canada College / University Details
Fee Amount

Secured Loan
Unsecured Loan
1. McMaster University It is one of the best universities for Engineering, MBA, Nursing, Humanities and Arts in Canada. $25,500 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
2. Dalhousie University It is a public research university, currently ranked 300th position across the world $10,010 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
3. University of Saskatchewan This university has an acceptance rate of 70% for international students. $23,500 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
4. University of Manitoba This university offers great courses at affordable tuition fees. $22,500 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
5.
University of Brunswick
This university offers a variety of course materials in science and nursing.
$21,500 CAD
Provided by all banks Private banks, NBFC & Funds provide unsecured loans
6. Bishop’s University This university is famous for MBA courses in international businesses, economics, etc.   $16,500 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
7. Brandon University  It is one of the few universities charging low tuition fees from international students. $7,250 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
8.
Université de Saint-Boniface
This university requires students to have a minimum proficiency in French language. $7,500 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
9. University of Ottawa It is one of the few bilingual universities in the world offering lectures in both English and French. $31,500 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
10. Memorial University of NewFoundland  This university is famous for Education, Geology, and Medicine.
$10,200 CAD
Provided by all banks Private banks, NBFC & Funds provide unsecured loans
11. Simon Fraser University This university offers a plethora of courses in different campuses across Canada.
$5,500 CAD
Provided by all banks Private banks, NBFC & Funds provide unsecured loans
12. University of Alberta It is one of the top universities in Canada attracting students from different parts of the world. $21,765 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
13. University of Winnipeg It is one of the universities accommodating thousands of international students. $24,342 CAD Provided by all banks Private banks, NBFC & Funds provide unsecured loans
14. Universite Laval It is one of the oldest universities in Canada, having 350 plus disciplines. $20,543 Provided by all banks Private banks, NBFC & Funds provide unsecured loans
15. Herzing College This college offers both bachelor’s and master’s degrees in medicine, agriculture, nursing and economics. $16,000 CAD Provided by all banks Banks & NBFCs do not provide unsecured loans
16. Cambrian College of Applied Arts and Technology This college has five schools -  school of business, health sciences, justice, engineering, and environmental sciences. $14,238 CAD Provided by all banks Banks & NBFCs do not provide unsecured loans
17. Booth University College Booth University College is comparatively small with only 16 - 17 faculty members. 
$11,395 CAD
Provided by all banks Banks & NBFCs do not provide unsecured loans
18.
Algonquin College
This college has more than 180 educational programs. The college is well known for arts, animation and creativity. $13,897 CAD Provided by all banks Banks & NBFCs do not provide unsecured loans
19.
Dawson College
This college is famous for its alumni - authors, actors, politicians, and judges. $15,273 CAD Provided by all banks Banks & NBFCs do not provide unsecured loans
20. Vanier College This college has a good reputation among international students.  $18,563 CAD Provided by all banks Banks & NBFCs do not provide unsecured loans

Scholarship available to study in Canada

Other than loans, you can also look for the popular scholarship available to study in Canada. As per the IDPs official website, we brought to you a list of scholarships available for international students to study in Canada at their convenience.

S No Name of the Scholarship to study in Canada Scholarship Amount Scholarship Details
1 Canadian Commonwealth Scholarship and Fellowship Plan $10,000 CAD It covers Graduate Students Exchanges (GSEP) for transportation, staying and other expenses in Canada for around 5-6 months.
2 National Research Council for Canada (NRCC) $40,000 CAD Research associateship is provided for master’s degrees in engineering and Ph.Ds in natural science or other engineering.
3 Quebec Provincial Government Scholarship

i) $25,000 CAD for doctoral

ii) $35,000 CAD for post-doctoral

This scholarship is only for students studying in Quebec.
4 Partnership Grants by Social Sciences and Humanities Research Council of Canada
$20,000 CAD
This scholarship is applicable for PhD candidates.
5 Vanier Canada Graduate Scholarships $50,000 CAD This scholarship is offered by the Government of Canada to students based on merits who aspire to do a doctoral degree.
6
Banting Postdoctoral Fellowships
$70,000 CAD This scholarship is for international students pursuing post-secondary education in the natural science, social sciences or healthcare research streams.
7 Ontario Trillium Scholarship $40,000 CAD Universities in Ontario select and award the scholarship to international PhD students based on merit and other criteria.
8 Ontario Graduate Scholarship Program $15,000 CAD To avail this scholarship,students must receive an offer from a university in Ontario and obtain a valid study permit. 
9 Shastri Indo-Canadian Institute $500 - $1,000 CAD This scholarship is for Bachelors, Masters, M.Phil degrees in recognised Indian universities or institutions to undertake research in their interested streams in a Canadian university.

Expenses covered under Education Loan

Expenses Covered Under Education Loan

Always check what expenses will come under an education loan. There are certain key aspects to consider like:

  • Admission fee
  • Tuition fee
  • Transportation charges
  • Books, stationery and other study materials
  • Laboratory fee
  • Hostel fee including food
  • Laptop with necessary configuration (If mandatory for the course)
  • Expenses for project work or study tours

Difference between Student Loan and Student Credit

The main difference between a student loan and student credit is that a student loan requires no interest rate until the student completes the degree or diploma course. But a student credit or a student line of credit asks the student (or co-applicant) to pay the interest amount immediately after getting the loan. 

Collateral Rules for Candidates

There are certain collateral rules for candidates prescribed by the banks. If a candidate gets a loan amount of INR 7.5 lakh and above, they should have tangible assets needed as collateral security. Moreover, parents need to be co-borrowers for all types of education loans.

Tax Benefits for Students

Tax benefits and other aids are available for student education loans. The applicant can claim the interest amount paid for the loan under section 80E. And the tax benefits can be claimed for up to seven consecutive years.

Conclusion

Education loans are vital for higher education, whether it is in Canada, the US, or Australia. Students often take an education loan for Canada since it is flexible and has a higher acceptance rate. However, students must do research on the current job market in Canada after MS courses and other professional degrees. This study loan for Canada involves lots of documents, procedures and approvals. If you follow their steps, you can easily get through this loan process and start your journey.

FAQs

1.Can I get an education loan for Canada without collateral?

Yes. You can get an education loan for Canada without collateral or security. You need to produce your academic Profile: a minimum score of 60% in 10th, 12th, and undergraduate degree. You should not have more than 3 backlogs in your degree. The co-applicant or CIBIL score must be good as it is the deciding factor for an education loan without collateral.

2.Can I get an education loan for Canada from India?

Yes. There are many public and private banks in India providing an education loan for Canada for Indian students. They need to update the KYC norms, fill the application form, and submit the necessary documents. Once the verification is successfully done, they are eligible to get an education loan.

3.Which bank is best for an education loan for Canada?

Some of the best banks in Indian for an education loan for Canada are:

S No Bank Name Public or Private Bank Loan Interest Rate Tenure Period
1 Union Bank of India Public sector bank 6.75% P.A. onwards Up to 15 years
2 State Bank of India Public sector bank 8.63% P.A. onwards Up to 15 years
3 HDFC Bank Public sector bank 9.57% P.A. onwards Up to 15 years
4 ICICI Bank Public sector bank 10.50% P.A. onwards Up to 15 years
5 Axis Bank Public sector bank 13.70% P.A. onwards Up to 15 years

4.How much can I get in a student loan for Canada?

In the Canada Student Loan Program, you can receive up to 60 percent of the cost of your tuition in federal loans, whether full-time or part-time. If you meet their requirements, you have a higher probability of a loan.

5.Will I have to produce security if I wish to apply for an education loan?

Yes. If your loan amount is more than average, the bank may ask for a collateral or security. 
 
6.What are the minimum requirements to apply for student loans in Canada?

The minimum requirements to apply for student loans in Canada are: The applicant must be an Indian citizen and above the age of 18 years. They should have secured admission from a Canadian university/institution. Then based on secured or unsecured loans, they need to proceed accordingly. However, many students search for queries in Quora and get confused with irrelevant personal loans.

7.What are the student loan repayment terms in Canada?

The student loan repayment terms in Canada are based on the agreement with the bank. The repayment schedule will be set by the bank before approving the loan amount. 

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