Guide on Education Loans for Canada

Updated on: 04 Sep 2023

 

Canada is a popular destination among international students worldwide due to its excellent universities that provide a wide range of experiences and opportunities. However, pursuing higher education in Canada can be expensive. For the year 2022, there were more than 226,000 Indian students that went to Canada for education purposes. This figure makes it evident that the popularity of Canada as a study-abroad destination is growing among Indian Students. The tuition fees for different programs and courses vary, but the average cost for international graduate students is around CAD 21,000. In addition to tuition fees, you'll also need to budget for living expenses. This is when abroad education loan for Canada comes into the picture. Abroad education loans are also considered to be one of the best ways to show proof of funds for Canadian student visas.

Types of abroad education loans for Canada 

Broadly, the abroad education loan options for Indian students to study in Canada fall under two brackets:

• Secured education loan for Canada-  also known as an education loan with collateral. This is a loan where the applicant pledges security along with the loan application. This security can be movable assets (Fixed Deposits, LIC Insurance, and more) or immovable assets (non-agricultural land, residential property, or commercial property). Almost all the public banks in India require collateral to provide you with an abroad education loan.
• Unsecured education loan for Canada - an education loan that does not ask the borrower to pledge collateral as security is called an unsecured education loan. Not having security leads to an increased risk for the financial institution and that is why you will usually find the rate of interest of these types of loans on a higher side as compared to secured education loans. These loans also demand a co-applicant or co-signer. It is on the basis of the co-applicant’s income and CIBIL score that the loan is.

Note: The type of lenders that you can find with GyanDhan includes public banks, private banks, NBFCs, and international lenders.

Secured education loans for Canada 

As discussed secured loans are those in which you would need to pledge security as a security. This helps to ensure that you are able to get a higher loan amount when compared with the other loan option which is an unsecured education loan. Pledging security can also benefit you in a way that you will not need a co-applicant for your loan. There are two public sector banks that you can consider to take an education loan for Canada. These are the State Bank of India (SBI) and the Union Bank of India (UBI).

A comparative analysis of these 2 banks in consideration of education loans for Canada has been shown below -
 

Unsecured education loans for Canada

In case you do not have collateral to pledge, you do not have to worry because there are many private banks, NBFCs, and international lenders that are available which can help you in this scenario. For private banks and NBFCs, you may need a co-applicant/co-signer with a minimum financial income without obligations, but in the case of international lenders, you can get a loan without a co-applicant and collateral. The benefit that you will have by choosing international lenders is that they will provide you loans to study in Canada in CAD that will help you to save forex charges and more such costs but then their interest rate is high.

Thus it can be said that every lender that can provide you with an education loan to study in Canada has their own pros and cons. In order to help you choose an effective lender we have developed a comparitive table for all the potential lenders that can provide you with unsecured abroad education loans. The unsecured education loan is applicable for all Bachelors, MBA, Masters, and PGDM courses.
 

Read Also:

• Why Study in Canada in 2023?
• Cost of Studying in Canada
• Guide to Public Universities in Canada
• Educational Loan Options for PG Diploma in Canada
• MIM in Canada: Universities, Scholarships, Eligibility & Job Opportunities
• Educational Loan Options for MS in Canada
• Project Management Courses in Canada
• Scholarships to study in Canada for Indian Students

Expenses covered by abroad education loan for Canada

It is up to you that either take the disbursement of the whole sanctioned loan amount in one go or you will be getting periodical disbursal as per your requirement. Later is preferred, to ensure that you do not end up taking out an additional amount as this will lead to an increased interest. The interest is charged on the disbursed amount not the sanctioned amount.

The expenses which may be covered under loan as per the lender will include -
 

Eligibility to get abroad education loan for Canada

To obtain an education loan in Canada as an international student, there are certain prerequisites that must be met.

• These include having a confirmation of acceptance from a recognized Canadian institution for a full-time program
• You should be at least 18 years old. 
• Must be having a good academic record.
• Additionally, the chosen course of study should have strong career prospects in relation to unsecured loans, and for secured loans, collateral must be provided.

Documents required for an abroad education loan to study in Canada

In addition to the prior mentioned eligibility requirements, it is imperative for students to verify that they possess all the necessary documents prior to obtaining an abroad education loan in Canada. The document list can be exhaustive and that is why GyanDhan also provides you with a customized document checklist that can help you fasten the document submission process. Some general documents which will be required to get a study abroad loan for Canada are - 

• Applicant’s KYC documents.
• Proof of admission: admission letter from university/institution
• Fees structure from the university 
• Loan application form
• Passport-size photographs
• Income proof of the co-applicant (for unsecured education loan)
• Academic transcripts (School and Bachelor’s).
• Standardized test scores - GMAT or GRE
• English proficiency test score - IELTS or TOEFL or Duolingo. 
• Resident proof of the applicant and co-applicant
• Property papers (in case of secured education loan)

Repayment of abroad education loan for Canada

Repayment is a factor that you should consider while taking an abroad education loan for Canada with any lender. In repayment as well, there are 2 things that need to be considered while making a choice of lender that is the repayment tenure and the moratorium repayment options. There are different types of repayment tenure available like partial simple interest (PSI), simple interest (SI), and EMI. A comparative guide has been provided, specifically focusing on repayment as a considerable factor for taking a loan to study in Canada.
 

It is important to ensure that you have explored all the options of the lenders by comparing them with each other based on different factors before starting your abroad education loan for Canada. With GyanDhan, you can skip all the hurdles by simply contacting us. You can get the benefit from our streamlined education loan process and free help in getting education loans to study in Canada. Our expert education loan counselor will discuss the loan options available to you after understanding your academic and financial profile. We work in partnership with several lenders in the market, including government banks, private banks, and NBFCs. Contact GyanDhan and you will not have to worry about your abroad education loan process.

• Education loan 
• Student loan 
• Canada 
• Study abroad 

First published date: 13 Jul 2021