Education Loan

Education Loan for MS in Canada: The Complete Guide

Education Loan for MS in Canada: The Complete Guide

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Education loan for MS in Canada - A guide on Interest rate, eligibility & list of Documents required for a loan for MS in Canada, the types of education loans, how to apply & more.

GyanDhan
Madhuwrita Nandi
Updated on:  01 Dec 2023  | Reviewed By: 
Aman 
| 14.3K | 13  min read

In 2022, over 226,000 Indian students chose Canada as their destination for higher education. Among them, a significant number pursued master's programs, taking advantage of the diverse range of career-focused and skill-oriented offerings at Canadian universities. These specialized programs not only enhance employability prospects but also prepare students for successful careers in their chosen fields. Adding to the appeal, the Post Graduate Work Permit Program (PGWPP) allows students to extend their stay and work in Canada for up to three years after completing their studies.


Pursuing a master's degree in Canada can be costly, but education loans offer financial support to make it affordable for Indian students. To ensure informed decisions, we provide a comprehensive overview of education loan for MS in Canada. With this knowledge, students from diverse financial backgrounds can identify the most suitable loan to cover their expenses.

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Cost to study MS in Canada

When considering the cost of studying in Canada, it is important to understand that it consists of two main categories of expenses: tuition fees and the cost of living. These two areas encompass the major components of expenses that individuals need to take into account when planning to pursue an MS degree in Canada. Below is a table that classifies different expenses that will be incurred on you when studying MS in Canada.

Expense Average Cost

Tuition fees

CAD 30,000 per year

Accommodation

CAD 600 per month

Food

CAD 300 per month

Transportation

CAD 90 per month

Miscellaneous expenses

CAD 280 per month

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Types of loans for MS in Canada

In general, the abroad education loan for MS in Canada options available for Indian students can be categorized into:

  1. list items A secured education loan, also referred to as an education loan with collateral, involves the applicant providing security or collateral along with their loan application. This collateral can take the form of movable assets like Fixed Deposits or LIC Insurance, or immovable assets such as non-agricultural land, residential property, or commercial property. Apart from it, there are many more types of collaterals that you can pledge. It is worth noting that most public banks in India typically require collateral as a prerequisite for granting an education loan for studying abroad.  
  2. list items An unsecured education loan refers to a type of loan where the borrower is not required to provide collateral as security. Unlike secured education loans, these loans do not involve pledging assets. However, due to the increased risk for the financial lender, unsecured education loans often come with a bit higher interest rates compared to secured loans. Additionally, these loans typically require a financial co-applicant or co-signer. The eligibility and terms of the loan are often based on the co-applicant's income and credit score (CIBIL score).
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Secured loan options for MS in Canada

As previously mentioned, secured loans require the borrower to provide collateral as security. This allows for a higher loan amount compared to unsecured education loans. Pledging collateral also eliminates the need for a co-applicant in some cases. When considering education loans for MS in Canada, two public sector banks that are worth considering are the State Bank of India (SBI) and the Union Bank of India (UBI). 

Lender Name Maximum Loan Amount (in INR) Rate of Interest Margin Money

SBI

Up to 1.5 Cr

10.65% (for girls)

11.50% (for boys)

10%

UBI

Up to 1.5 Cr

10.5% - 10.85%

10%

(listed university)

15%

(non-listed university)

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Unsecured loan options for MS in Canada

If you don't have collateral to pledge, there is no need to worry as there are several lending options available from private banks, NBFCs (Non-Banking Financial Companies), and international lenders to assist you in such scenarios. Private banks and NBFCs may require a financial co-applicant or co-signer with minimum income criteria and no financial obligations. 

On the other hand, international lenders offer loans without the need for a co-applicant or collateral. Opting for international lenders has the advantage of providing loans in Canadian Dollars (CAD), which can help you save on forex charges and other related costs. However, it is important to note that international lenders typically have higher interest rates.
 

Lender Name Maximum Loan Amount  Rate of Interest Margin Money

Axis Bank

Up to 50 Lakhs INR

11% - 13.50%

5%

ICICI Bank

Up to 50 Lakhs INR

10.85% - 12.50%

0 - 15%

IDFC FIRST Bank

Up to 35 Lakhs INR 

11.75% - 13.25% 

Nil

HDFC Credila

Up to 40 Lakhs INR

11.75% - 12.50%

Nil

Auxilo

Up to 30 Lakhs INR

12% - 13%

Nil

Incred

Up to 30 Lakhs INR

12% - 13%

Nil

Avanse

Up to 25 Lakhs INR

12.50% - 13%

Nil

MPOWER Financing

Up to 100,000 USD

12.99% - 13.99%

Nil

Prodigy Finance

Up to 100,000 USD

12% - 14%

Nil

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Expenses covered by lenders for MS in 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 that may be covered under the loan, as per the lender, include the cost to study, living expenses, other costs such as tuition fees, admission fees, examination fees, expenses for books or a laptop, expenses for study tours, accommodation or hostel costs, food costs, caution fees, expenses for travel, health insurance expenses, and miscellaneous expenses. These potential expenses are subject to the policies and guidelines of the respective lender.
 

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Eligibility and documents required for education loan to study MS in Canada

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

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

Apart from all the eligibility criteria, there are a few documents required to be submitted. They are -

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

Mandatory GIC Policy

A student of MS in Canada must apply for an education loan before applying for the visa because there is a requirement to purchase a Guaranteed Investment Certificate (GIC)* worth CAD 10,000 under the SDS** (Student Direct Stream).

*The GIC is an investment scheme with fixed returns to eligible candidates. It can act as a savings account and has benefits like no processing fee when paying with foreign currency, credit card facilities, etc. GIC can help you for quick visa processing.

**The SDS is an expedited study permit processing program through which the applicants get study permits faster.

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How to choose the best lender for MS in Canada?

The following checkpoints can help you choose the best education loan for MS in Canada:

  • list items Eligibility criteria and documentation - they are minimum requirements that need to be fulfilled by the applicant to get the loan. 
  • list items Cosigner requirements - the requirements like minimum income, credit history, or more that your co-applicant must fulfill.
  • list items Loan amount - the maximum limit of the loan amount that the lender can provide you in both cases i.e. secured and unsecured education loans.
  • list items Disbursement - it refers to the act of paying out or distributing funds (as per applicant need), particularly in the context of education loans that you have taken.
  • list items Rate of interest and APR - interest rate refers to the percentage of the loan amount that a borrower pays to the lender as a fee for borrowing the money. The APR can be also referred to as the annualized cost of your loan.
  • list items Interest rate discounts - it refers to a reduction in the interest rate charged on a loan, typically offered as an incentive to borrowers who meet certain criteria 
  • list items Additional considerations - as the name suggests these are some additional charges or limitations that you will need to consider in order to get the education loan like margin money, foreign exchange (Forex) charges, insurance charges, and more.
  • list items Moratorium period and repayment options - generally referred to as the course duration plus the grace period after it. You need to see whether you have to make any repayments during the moratorium period or not.
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How to get abroad education loan to study MS in Canada?

Obtaining an education loan for studying MS in Canada is an easy process. However, managing multiple lenders individually can be challenging, which is why GyanDhan offers assistance in obtaining an education loan for studying MS in Canada through the following simple steps:

Step 1: Begin your loan application for MS in Canada by assessing your abroad education loan eligibility through GyanDhan.

Step 2: Upon completing the eligibility application form, you will be connected with an education loan expert from GyanDhan. The loan expert will guide you through the loan application process, providing details about the preferred lenders based on your requirements and application.

Step 3: Based on the specific requirements of the lender, you will receive a customized document checklist that outlines all the necessary documents and potential alternatives for easier arrangement.

Step 4: Depending on the lender's guidelines, you will be instructed to submit the documents either in hard copy (collected by a relationship officer) or soft copy (uploaded on the portal).

Step 5: Once the documents are submitted, the verification process will commence, typically taking 7-15 days depending on the lender and loan type. Upon loan approval, you will receive an agreement letter for review and signing. The GyanDhan user dashboard allows you to monitor the real-time progress of your loan application.

Step 6: After signing the agreement, you can initiate the disbursement process at your convenience, adhering to the lender's standard procedures.

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Repayment of abroad education loan for MS in Canada

Repayment is yet another factor, that can have a considerable impact on your abroad education loan process and experience. Thus it is always recommended to understand the repayment and moratorium for your abroad education loan. Most of the banks ask for some kind of payment during the moratorium period as well but some also keep the moratorium period free. The different options for payment during the moratorium period include partial simple interest (PSI), simple interest (SI), and EMI.

Lender Name Repayment Tenure Repayment Option during moratorium

SBI

Up to 15 years

No payment or only SI

UBI

Up to 15 years

No payment or SI

Axis Bank

Up to 15 Years

SI or EMI

ICICI Bank

Up to 10 Years

SI or EMI

IDFC FIRST Bank

Up to 12 years

PSI or SI or EMI

HDFC Credila

Up to 15 Years

PSI

Auxilo

Up to 15 Years

SI

Incred

Up to 15 Years

PSI or SI

Avanse

Up to 15 Years

PSI or SI

MPOWER Finance

Up to 10 Years

SI

Prodigy Finance

Up to 15 Years

SI

Before initiating your education loan for MS in Canada, it is crucial to thoroughly explore and compare the options offered by different lenders based on various factors. GyanDhan simplifies this process by providing comprehensive assistance. Through our partnerships with multiple lenders, including government banks, private banks, and NBFCs, we ensure a wide range of choices. Check your eligibility for an education loan for studying abroad with GyanDhan and leave your worries about the loan process behind.

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Frequently Asked Questions

Read Also:

How much loan is required for MS in Canada?

To pursue a Master's degree in Canada, you may need a total of CAD 25,000 to CAD 55,000 per year. This includes tuition and living expenses. In Indian Rupees (INR), this translates to approximately INR 15 lakhs to INR 33 lakhs per year, considering the current exchange rate.

How to get study loan for MS in Canada?

To secure a study loan in India for an MS in Canada, choose a bank or NBFC like SBI or Avanse, check eligibility and prepare necessary documents like admission letters and financial proofs. Apply and, upon approval, receive the loan which covers tuition and living expenses. Consider government subsidies if applicable.

What are the documents required for study loan for MS in Canada?

For a study loan for an MS in Canada from India, you'll need an admission letter from the Canadian university, academic transcripts, proof of identity (Aadhaar, PAN), proof of residence, and financial documents of the co-applicant (income proof, tax returns). The exact list of required documents will depend on the lender chosen.

What is the maximum loan amount available for an MS in Canada?

The maximum loan amount for an MS in Canada can go up to 100% of the cost of education, which typically covers tuition and living expenses, and is usually capped at around INR 20 to 50 lakhs. The specific amount depends on the bank and the borrower's financial profile.

How long is the repayment period for a study loan for an MS in Canada?

The repayment period for a study loan for an MS in Canada typically starts after a moratorium period (course duration plus six months to a year) and can extend up to 10 to 15 years, depending on the lender’s policy and loan terms.

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