Canada is competing with the United States as the most popular location for higher education overseas. The cost of studying in Canada varies according to the university, course, and duration of study, as well as the cost of living. Although there are many good universities in India, fantastic career possibilities and high living conditions encourage students to study overseas.
Not every aspiring student has the financial means to live and study in Canada. As a result, different banks and other financial institutions are providing education loans to students who want to further their education in Canada. Although several financial aids and scholarships are available, not every student can take advantage of them due to severe competition.
This post will tell you about every part of student load for Canada, from eligibility and loan application process to the paperwork required for obtaining an education loan to study in Canada. Aside from that, we will advise you about what charges are covered by the student loan in Canada.
How to Apply for an Education Loan
Obtaining a loan is not only time-consuming but also tedious; therefore, in order to prevent a last-minute rush, one should always begin applying for a loan early. Students obtain an idea of the entire cost of living and studying after receiving their admit letter from the university. Calculate how much you need to finance and how much you will spend out of your own cash. Before applying for a loan, do some research to see which institutions offer the best lending rates.
Compare the loan offers of different banks on these parameters:
- Interest rate
- Processing fee
- Expenses covered under the education loan
- Loan processing time
- Prepayment terms and duration
Fill out the application form and check the bank’s requirements after you’ve decided on a bank. Inability to demonstrate sufficient cash may also result in rejection; thus, it is usually suggested to approach at least two-three banks for loans.
Documents Needed When Applying For An Education Loan
The number of Indian students studying abroad has surged tremendously in recent years, and as a result, demand for loans has climbed significantly. Banks also verify the information provided by the applicants in order to sanction the loan. As a result, the applicant must provide a list of documents to the banks.
- Admission letter from university/institution (Proof of admission)
- Loan application form
- Passport size photographs
- Academic documents (certificates and mark sheets)
- Documents of qualifying exams (like GMAT, IELTS)
- Resident proof of the student and the guarantor
- Statements of borrowers’ bank accounts (last year)
- Income proof of the guarantor
Note: Document requirements can vary depending on the bank’s own rules and regulations, so it is always recommended to check the list of documents required with the particular bank.
Which Courses Are Eligible For Student Loans In Canada?
Banks sponsor students who seek to apply for undergraduate, master’s, or research programs at established institutions. Banks also make financing available for SPP projects. Nationalized banks do not typically provide education loans for vocational, short-term, or diploma programs. Because banks are constantly concerned with recouping their investment from the student requesting cash, they prefer to make loans for job-related courses.
Criteria For Applying For An Education Loan To Study In Canada
Before applying for an education loan, make sure you meet the eligibility requirements. All banks take into account the following factors:
- The borrower must be an Indian citizen.
- The applicant must have been accepted into a recognized overseas university or institution.
- The loan applicant must be over the age of 18 or his or her parents must apply for the loan.
- The applicant must have been accepted into a professional course.
Repayment
Repayment begins one year or six months after the end of the course, whichever comes first, once the candidate is hired. Once repayment begins, the loan must be repaid within 5 to 10 years.
Repayment terms vary depending on the bank’s policies or the criteria covered by the loan scheme.
Expenses Covered By Education Loan
This is one of the most crucial considerations when applying for an education loan. Because banks provide a variety of student loan programs, it is always a good idea to research which program best meets your needs. Different expenses are covered by different plans, therefore it is always a good idea to check with the bank to see what other expenses, other from the tuition fee, are covered by the loan scheme. The following items are in the expense list:
- Tuition fee
- Travel expenses
- Cost of buying books and other study material
- Laboratory fee
- Hostel fee
- Purchase of a laptop (If required for the course)
- Expenses for project work or study tours
Collateral Regulations
If the loan amount is greater than INR 7.5 lakh, tangible assets are required as collateral security. In addition, all school loans require parents to be co-borrowers.
Tax Benefits
Section 80E allows for tax deductions on interest paid on the total loan amount. Furthermore, after the payback begins, the tax benefits can be claimed for up to seven years.
Loans are a benefit for bright students who have the potential to make it big in life but are unable to do so due to rising prices. However, it is advised to thoroughly review the terms of the loan agreement.