Study Loan for Canada: Everything You Need to Know

Study loan for Canada - Canada is one the top most preferred countries for studying chosen by most people worldwide. Even though there are many top universities in India, people opt to pursue career courses in Canada in the scope of better career opportunities and living standards. Well, the cost of the education for studying in Canada depends on the university and course you prefer. These rates are considerably high in comparison to India so most people depend on merit scholarships and loans. As the scholarship availability is limited, most people choose an education loan for studying in Canada. The expenses in Canada not only cover the university fees and living costs but also includes the deposits as a Guaranteed Investment Certificate in banks. In this article of study loan for Canada, includes all the information related to education loans, loans without collaterals, interest rates, documents requirements and steps to be taken for education loans, etc.

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This Story also Contains

1. What is the process to apply for a study loan for Canada?
2. Study loan for Canada requirements
3. Courses Covered Under a Study loan
4. Documents Required for applying a Study Loan for Canada
5. Repaying the Study Loan
6. Interest Rate Details
7. Tax Benefits

Types of Education Loan for Studying in Canada

There are two types of education loans that are provided for studying in Canada. They are -

• Collateral Loan
• Non- Collateral loan

Collateral Loan

Collateral means a loan with a security requirement, which value is higher than your loan amount agreed to be given in the course of failure to repay the borrowed money. For any study loan in Canada for students, parents have to be the co-borrowers. Proofs valid as collateral security are land documents, policies, bank deposits, bonds and also shares, etc.

Non - Collateral loan

These non-collateral loans are called unsecured loans. With this, we can get an education loan for Canada without collateral. The loan amount is provided and determined by the co-applicant salary. Private institutions like NBFCs (Non-Banking Financial Companies)like HDFC Credila, Avanse, Incred, etc., and private banks like ICIC, Axis, etc., provide the student loan for Canada from India.

What is the process to apply for a study loan for Canada?

Candidates are recommended to check these processes and steps before choosing a university or beginning the application process, just for an overall idea. Here are the steps involved in acquiring a student loan for Canada -

• After having the admission letter from your desired Canadian university, estimate the cost of living based on the inflation and tuition fees.

• Divide the expenses for self and loan.

• Go through the existing education loan options and opt for the bank by considering the study loan for Canada interest rate, the processing fee and time, expenses incurred under the loan, loan tenure, the Moratorium period, and the terms and conditions.

• After a thorough examination select the bank and submit the essential details. The details of each step are discussed below.

Study loan for Canada requirements

There are a few requirements to apply for a student loan for Canada from India. Some of the factors that are considered by all the banks are -

• Must be an Indian citizen.

• Age must be above the age of 18 years, if not his/her parents will have to apply for the loan.

• The applicant must have secured admission to a recognized university in Canada.

• The course you have chosen must have good career prospects as the bank give preference to job-oriented courses.

Courses Covered Under a Study loan

All the courserses like undergraduate, post-graduate, doctorate, post-graduate are covered under study loan for Canada. One can even apply to diploma courses, Vocational and skill development courses, or other short-duration programs but securing loans for these courses becomes less from nationalised banks. So it is important to take job-securing courses which later increase the chances of securing and repaying loans.

Documents Required for applying a Study Loan for Canada

There is a list of documents that must be gathered for applying for a study loan. While the whole set of documents can differ a bit for each and another bank you prefer. Please check these study loans for Canada requirements which are common.

For the identity of the applicant: Passport, Aadhar card, and PAN card of both the candidate and the parent/guardian.

For residency proof of the applicant: Aadhar card, Voter ID card, Ration card, electricity bill, gas bill, or residency proof can be obtained from mee seva.

Academic documents:

• Admission letter from the university (Proof of admission) which was shared by the university, fee structure for the program.

• Certificates and mark sheets of your studies which included 10th, 12th, graduation, and a few other documents which you have secured.

• Scorecard or Documents of qualifying exams like IELTS, GMAT, IELTS, TOFEL, and PTE

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Other documents:

• Income proof which can be obtained from Meesevava.

• Statements of borrowers' bank accounts (last year), IT returns of the guardians for the past two years, and any other proofs requested by the bank.

• When opting for collateral loans with assets like flat, house, non-agricultural land, etc., It requires the following documents: the property title deed, building approved plan, NOC for a mortgage form builder, in case of land have 7/12 extracts, Registered Sale Agreement, and Society Share Certificate. Make sure you have the original registration receipt for the above agreements.

Repaying the Study Loan

There are numerous options for repaying a study loan for Canada, choose the best which suits you. The repayment starts when your moratorium period is ended (moratorium period includes your graduation period + 6 to 1 year after graduation). After which you can choose a time period between five to seven years to repay your entire student loan for Canada. The repayment for the education loan for studying in Canada is two types. One repayment method is the EMI method where you can pay monthly instalments. The other repayment method is the part payment method where students pay lump-sum amounts in certain intervals of time between the EMI which reduces the interest rate on the principal amount.

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Interest Rate Details

The interest rates details related to a study loan for Canada range from 8%-12 %. The interest rate depends on the loan amount requirement, the scheme you choose, and repayment tenure. The study loan for Canada interest rate is quite low for a secured loan, while the interest rates will be in the higher range for unsecured loans or education loan for Canada without collateral. The other best way of reducing your interest rate is by having a good credit score. This credit score can be improved by paying bills, and EMIs on time.

Tax Benefits

This interest from an education loan comes under section 80E. People who are paying taxes for their salaries can claim tax benefits with these bills of study loan for Canada. So the tax claim will start from the repayment period.