Educational Loan Options for PG Diploma in Canada

    Updated on: 11 Aug 2022


    Canada is fast becoming the number one preferred destination for Indian students who aspire to study abroad. A large number of world-class universities, tolerant environment for foreigners, and the option to apply for permanent residency are some of the reasons why international students choose Canada over other countries for their higher studies. Canada is currently home to nearly 572000 international students. The number of Indian students studying in Canada is steadily rising: it was 49420 in 2016 and increased to 83410 in 2017, and it won’t be wrong to say that this trend is here to continue.  A majority of international students in Canada are enrolled in PG diploma courses, and a substantial chunk of Indian students pursue a Postgraduate diploma in various fields. A postgraduate diploma, essentially, is done after an undergraduate degree and is moderately similar to a Master’s degree. However, unlike a Master’s degree that has 180 credits, a postgraduate diploma has 120 credits and typically lasts a year but can also be for two years in some places. In Canada, a postgraduate diploma is offered by community colleges. 

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    If you are an Indian student who is thinking of studying PG diploma courses in Canada and are looking at some feasible financing options, then this blog is for you. In this blog, we will take a look at education loan options for Canada for international students. 

    What is the Approximate Cost of Studying for PG Diploma in Canada? (All Figures are in CAD)

    Well, this is obviously the first question that comes to any student’s mind, and we will answer this first. We have considered the top five colleges and their diploma courses and fees structure. Those who aspire to go for a PG diploma in Canada can get a general idea of the cost of education in the country. 
    The first-year tuition fee for international students pursuing a PG Diploma at Centennial college (a leading college in Canada for PG Diploma) is $16,531.80. A one-year Graduate Certificate in International Business Management from Durham College will cost international students $15,599. A two-year Business Management – International Business Graduate Certificate program from Lambton College will cost international students $14000 a year. International students applying for the one-year International Business Management Ontario College Graduate Certificate program will have to pay an estimated $16,582.84.
    Apart from the tuition fees, students will also have to set aside approximately $15,000 per year for their living costs. This will, however, vary from city to city and the lifestyle of the student too. 

    Why Should I Finance PG Education in Canada with an Education Loan?

    Education loan is a silver lining in the dark clouds for all those students who wish to study abroad but face impediments due to financial constraints. Since studying PG diploma courses in Canada is not a cheap affair, many students get deterred and shelve their plans of going there for higher studies. For such students, education loan for PG diploma in Canada is the best option to fund their education and other related expenses. Students can either take a secured education loan or an unsecured education loan for studying abroad
    Below, we list down the various education loan options offered by different types of lenders for PG diploma in Canada along with their salient features like repayment period, interest rates, expenses covered, processing fees, and so on. Those who are looking for financially viable options to fund their higher education in Canada can conduct a comparative analysis of all the loans on the basis of the information given below and select that type of loan which suits their financial profile and requirements. 

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    Types of Education Loan in Canada for International Students and Their Features

    Education loans can be broadly divided into two types - Secured Loans and Unsecured Loans. We have further divided these two types of loans into different types of lenders providing the loans - Public, Private, NBFCs, and International Lenders. For each type of loan, their salient features have been explored for each type of lender... 

    1. Unsecured Loan

    An unsecured loan is basically a loan without collateral. In such loans, the student does not pledge any tangible or intangible assets. These loans have a comparatively shorter repayment period. However, their rate of interest is higher than that of secured loans. Also, their rate of approval is slightly lower than that of a secured loan. It must be noted that public banks and private banks do not provide without collateral education loans for PG Diploma in Canada for more than 7.5 Lakhs which is not sufficient given the total expense. 

    Study Loan for Canada Without Security/Collateral

    Features

    Public Banks

    Private Banks

    NBFCs

    Example Lenders

    State Bank of India, Bank of Baroda

    Axis Bank

    Avanse, Incred

    Loan Amount

     No without collateral options for an amount more than 7.5 Lakhs 

     No without collateral options for an amount more than 7.5 Lakhs 

    Up to INR 25 Lakhs

    Interest Rate Range

    13.5%-16.5%

    Processing Fees (INR)

     1%-2% of Loan Amount 

     Number of Colleges Supported 

    More than 50

    Depending on the lender, the repayment period for the loan, the loan processing time, expenses covered etc for an education loan without collateral vary. 

    • Repayment Period - The repayment tenure for education loans without collateral from NBFCs is 10 years. However, in case you want an extension in the repayment period, GyanDhan contacts the lender and requests for an extension on your behalf and tries to provide you with a customized loan option which suits your needs perfectly. 
    • Processing Time - NBFCs take 3-4 working days to process an unsecured education loan after document submission. In case of any delays from the lender’s side, Gyandhan contacts the upper management of the lending institution and tries to get the loan sanctioned immediately. 
    • Expenses Covered - Educational loans without collateral from NBFCs cover 100% of the study-related expenses.
    • Co-applicant Income Requirement - NBFCs generally require the co-applicants to have a monthly income of more than 25k a month. As per our experience in dealing with educational loans of this type, 50% of the co-applicant income should be sufficient to at least bear the interest per month
    • Common Decline Reasons - A low CIBIL score, low income or some other loan obligations are some of the common reasons why NBFCs might decline an application for education loans without collateral. However, a low CIBIL score does not entirely dilute your chances of getting an education loan. We at GyanDhan try to look for solutions in such cases and increase your chances of getting your education loan approved. 
    • List of Documents Required - An unsecured education loan application, like all loan applications, requires the applicant to submit a number of documents. Though this varies from lender to lender, some of the common documents are Know Your Customer (KYC) of the borrower (student) and the co-applicant, applicable mark sheets, letter of admission from the university, co-applicants income certificate, fee structure, etc. Many times, students are unaware of the documents that are required for a loan application and thus their loan sanction gets delayed. At such times, GyanDhan comes to their rescue by quickly providing them with a customized list of documents as per their profile and allowing to submit all the documents at once thus expediting the process.

     

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    2. Secured Loan 

    A secured loan is also known as a collateral loan. In this kind of loan, the student is required to pledge a tangible or intangible asset while applying for the loan. Examples of such an asset are immovable property, FDs, insurance policy, etc. The bank sees this collateral as a security against the loan amount and will use this to recover the loan amount in case of any default. A secured loan has a lower rate of interest and a longer repayment period too. Some other benefits of taking a secured loan are no requirements for parental income, no repayment during the period of study and higher chances of approval. 
    When it comes to choosing between unsecured and secured education loans provided by NBFCs for PG Diploma in Canada, it is advised that students opt for secured loans from PSUs like SBI & BOB. The interest rate for secured loans offered by NBFCs is comparatively much lower than that for unsecured loans, almost amounting to a difference of  4%-6%. Since this difference makes a substantial difference in the EMIs one would have to pay during the repayment tenure, one should choose that option which significantly reduces their financial burden in the future. Therefore, even if you are unable to pledge your own asset as collateral against the loan, you could also consider pledging third-party collateral, that is assets owned by a third party.  

    Study Loan for Canada With Security/Collateral

    Features

     Public Banks 

    Private Banks

    NBFCs

    Example Lenders

    SBI, BOB

    Axis Bank

    Avanse, Incred

    Loan Amount (INR)

    Up to 1.5 Cr

    Up to INR 60 Lakhs

      Up to INR 60 Lakhs  

    Interest Rate Range

    10%-10.45%

    11.5%-13.5%

    13%-15%

    Processing Fees (INR)

    INR 11800

      INR 0 below INR 20 lacs and INR 750 on every lac above INR 20 lacs  

    1% - 2%

      Payment During Study Period  

    None

    Simple Interest

    Simple Interest

    Different lenders cover different study-related expenses and have different repayment and processing time. Other aspects of an education loan with collateral to vary from lender to lender. Let us take a look at some of these.

    • Repayment Period - Public banks have a repayment period of 15 years for education loans with collateral, while private banks have a repayment time of 20 years. NBFCs give borrowers 10 years to repay their loan. 
    • Processing Period - The education loan processing time by public banks is 15-20 working days. Private banks take a little less time, i.e. 10-12 days for processing the loan, while NBFCs process the loan in 8-10 working days.
    • Expenses Covered - 90-100% of the total study-related expenses are covered by Public Banks. Private banks, on the other hand, cover 85% of the total study-related expenses. NBFCs cover 100% of the total study-related expenses. 
    • Common Decline Reasons - Even though an education loan with collateral has a higher chance of acceptance, there are some reasons because of which public and private banks decline an application for an education loan with collateral. The two major reasons for declining such an application are incomplete collateral documents and poor CIBIL. The decline reasons for NBFCs though are different. NBFCs decline loan applications for students who have a low income or a poor CIBIL score. 
    • Documents Needed - A secured loan application requires some common documents. These are KYC documents of the student and the co-applicants, relevant mark sheets, documents related to the collateral being pledged, admission letter from the college, tuition fee structure, etc. 

     

    Read Also - Secured Vs. Unsecured Education Loans: A Comprehensive Guide

    How to Choose the Best Educational Loan Option for PG Diploma in Canada?

    While deciding to fund your higher education in Canada through an education loan is a step towards the right direction, selecting an education loan which perfectly caters to your financial requirements is a tough decision which needs to be taken prudently. Loan applicants should surf through the multiple options available and carefully analyze the financial implications of each. A few factors which a loan applicant must take into account while assessing the suitability of a bank loan for Canadian PG education are as follows:

    1. Interest Rate
    2. Processing fee & Time 
    3. Margin Money
    4. Moratorium Period
    5. Tax Benefits 
    6. Loan Duration 
    7. Expenses Covered
    8. Prepayment terms and conditions

    Every day, GyanDhan assists numerous study abroad aspirants to get education loans for financing higher studies abroad. If you too are a study abroad aspirant and are confused as to how to fund your education, get in touch with us. Our dedicated and expert loan counsellors do a quick analysis of your financial requirements over the phone and lets you know the possibility of the approval of your education loan even before you get an admit letter. We also help you navigate through the multiple options available and select the perfect education loan which assures you of the least financial burden in the future. In addition to this, you can also make use of our education loan focused customizable EMI calculator to calculate the EMIs and interest you will have to pay for an education loan and compare different options. Or you can simply check your loan eligibility here using our Loan Eligibility tool which gives you the best options based on your requirements. 

    What is the Application Procedure for Education Loan in Canada?

    The application process for educational loans for PG diploma course in Canada involves the following steps: 

    1. First, check your eligibility for an education loan here or request a call back here
    2. GyanDhan’s education loan counsellor will then give you a call to discuss the possible education loan options. Upon analyzing your requirements, our GyanDhan counsellor will suggest the next steps as per the type of lender selected for the loan. 
    3. Submit all the supporting documents. (Since this is crucial as a well complex step, it is recommended that you take loan counsellor’s help at hand to ensure that all the required documents are submitted at one go). If you reside in a metropolitan city and have applied to a nationalized bank for the education loan, GyanDhan’s relationship officer will pick up the documents from your home for free, however, for other cities, we will set an appointment with the branch manager of the bank and coordinate.  In the case of private banks, our banking partner will pick up the documents from your home, or you can courier it to the sales manager appointed by us. If you take an education loan from NBFC, you just have to upload the documents on our website. There is no need to submit any hard copy.
    4. The bank then reviews the application. During this process, the student and his/her parents may be asked to give additional information. If the bank finds the application feasible, it will approve the loan request. 
    5. Once the loan is approved, the student then has to accept the offer by signing the sanction letter offered by the bank and in the case of NBFC by paying the processing fees 
    6. Once the student receives the sanction letter, the student & the co-applicant need to sign the agreement & disburse in 2 to 6 months depending on the validity of the sanction letter which varies from lender to lender. Once the agreement is signed, the student can apply for the disbursement of the loan.   

    The process of getting an education loan sanctioned is complex and time-consuming. Therefore, in order to avoid last-minute hassles and risking your admission into the university, it is advised that students start with the loan application procedures immediately after receiving the admit letter from the university.

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