Canada is a sought-after destination for Indian students. According to Statistics Canada, the average cost of studying a master’s degree in Canada is $21,100 yearly for international graduate students. In INR, the cost is roughly ₹12 lakhs.
This cost can be covered by an education loan for Canada. Indian students have access to the best lenders and the terms of the loan are easy to comprehend. Let’s understand the details of an education loan for Canada to help you choose right.
Understanding Education Loans
Education loans are a necessary financial tool that provides students with the necessary funds to cover expenses related to higher education, including tuition fees, accommodation, and living costs. They play a pivotal role in making higher education accessible to students who may not have access to necessary funds.
Education loans are primarily categorized into two types.
- Unsecured education loans that are without any collateral security and a higher interest rate.
- Secured education loans with collateral security and relatively lower interest rate.
An education loan can be answer to all your financial worries when it comes to studying in Canada. Before understanding terms of an education, let’s understand why Canada is good for you as a student!
Why Choose Canada for Higher Education?
- Quality Universities: Rigorous quality standards and accreditation processes ensure high-quality education. Canadian universities are in all top 100 lists by QS and Times Higher Education.
- Post-Graduation Work Opportunities: Benefit from the Post-Graduation Work Permit (PGWP) to gain valuable work experience.
- Affordable Cost of Living: Compared to other popular study destinations, Canada offers a relatively affordable cost of living.
- Pathway to Permanent Residency: Gain valuable points towards permanent residency through the Canadian Experience Class (CEC).
- Tuition Costs: Average tuition fees for international students in Canada range from CAD 15,000 to 35,000 per year, depending on the program and institution.
- Easy Education Loan Assistance: Canada is a favorable destination from the lens of various lenders. Many lenders are willing to offer education loans to help cover tuition fees, accommodation, living expenses, and other associated costs,
- Simplified Application Process: Many lenders have streamlined application process when it comes to Canada to make it easier for international students to secure funding.
Eligibility Criteria for Education Loan for Canada
Here’s the basic criteria you need to meet to get an education loan for Australia:
- You should be an Indian citizen and above 16 years of age.
- You should have a good academic record and minimal backlogs!
- A Letter of Acceptance from a recognized university in Canada.
- The course you have chosen must be accredited and recognized by your lender.
- Financial documents of the main applicant and the co-applicant.
- Collateral documents if you are opting for a secured education loan.
Types of Loans Available for Studying in Canada
Types of education loans for studying in Canada:
- Secured Education Loans: Also known as collateral education loans, are loans where the student pledges collateral to secure funds for higher education. Collateral refers to valuable asset that you own. It can be a property or fixed deposit, to the lender as a guarantee for repayment.
- Unsecured Education Loans: An unsecured education loan is a loan that does not require any collateral. Most students flying abroad from India opt for this type of education loan. Unsecured education loans or non-collateral education loans are a huge relief for students who do not have collateral to pledge in lieu of a loan. It is also a good option for students who do not want to burden their parents.
- Education Loans without Co-applicant: This is a category of education loans where students do not need a co-applicant to sign on the loan with them. It is not available for all courses and can be hard to acquire.
Must Read: Study MBA in Canada under ₹40 lakhs!
6 Steps to Apply for an Education Loan for Canada
- Research Lenders: Compare interest rates, terms, and eligibility criteria from various banks, financial institutions, and government-backed loan providers.
- Gather Documents: Collect admission letter, course fee structure, financial documents, identity proof, and other required documents.
- Complete Application: Provide accurate information, attach necessary documents, and submit the completed application.
- Await Approval: The lender will review your application, verify documents, and conduct credit checks.
- Receive Sanction Letter: If approved, you’ll receive a letter outlining the loan amount, interest rate, and repayment terms.
- Disbursement: The loan amount will be disbursed in installments to the university or college.
Curious to know how the loan amount is determined? It is based on your cost of attendance.
Also Read: What is the Cost of Attendance?
Repayment Options and Terms
- Repayment plans for education loans vary depending on the lender. Common options include fixed monthly installments, graduated repayment plans (where payments increase over time), and income-driven repayment plans (where payments are tied to your income).
- A grace period or a moratorium period is a period after completing your studies during which you don’t have to make loan payments. This period can vary depending on the lender and the specific loan terms. Once the grace period ends, you’ll typically start making regular loan payments.
- Deferment and forbearance are options that may allow you to temporarily pause or reduce your loan payments. Deferment usually applies to specific circumstances, such as unemployment or enrollment in further education. It can be granted for various reasons, such as financial hardship or medical emergencies.
Tips for Managing Your Education Loan for Canada
- Budgeting Tips: Create a detailed budget, track expenses, prioritize payments, and consider using budgeting apps.
- Maintain Good Credit: Timely payments, responsible borrowing, and avoiding defaults can improve your credit score.
- Minimize Debt: Part-time work can generate income, scholarships can reduce loan burden, and smart financial planning can optimize resources.
- Pay Interest During Grace Period: By paying minimal interest during your grace period, you can reduce your loan burden and shorten your tenure.
Common Challenges and How to Overcome Them!
Here are some common mistakes to avoid when you have the responsibility of an education loan!
- Interest Rates and Fees: Understand the interest rate, processing fees, and other charges associated with your loan.
- Currency Fluctuations: Monitor exchange rates, consider hedging strategies, and budget accordingly.
- Loan Defaults: Timely payments are crucial. Defaulting can lead to penalties, damage your credit score, and impact future financial opportunities.
Must Read: Myths about education loans
Conclusion
If you are planning to study in Canada and need an education loan, call us! We can help you compare and choose the best lender from 15+ providers and negotiate the best offer. Start your study abroad journey with the best!
