Embark on your Canadian educational dream with an education loan.
Discover how banks and financial institutions bridge the gap for aspiring students.
Learn about the application process, required documentation, eligible courses, loan eligibility criteria, repayment terms, and expenses covered.
Canada, vying with the U.S as a top overseas higher education destination, offers robust career opportunities and high living conditions.
Despite India’s numerous good universities, many students crave an international education.
However, not all aspirants have the financial capacity to bear the study and living expenses in Canada.
Luckily, banks and other financial institutions step in to bridge this gap through education loans.
This article serves as your roadmap to securing an education loan to fuel your Canadian educational dream.
Education Loan Application: Where to Start?
Obtaining an education loan can be a lengthy, arduous process.
To avoid last-minute hurdles, we suggest starting the loan application process early.
Once you receive your university admission letter, you have a better picture of your overall education and living expenses.
Assess your financial capability – how much of the costs you can cover independently and how much loan you need.
Before applying, research and compare the loan offers from different institutions based on these parameters:
- Interest rate
- Processing fee
- Expenses covered under the loan
- Loan processing time
- Prepayment terms and duration
After selecting a bank, fill out the application form and fulfill the bank’s prerequisites.
It is generally advised to approach at least two to three banks for loans, as an insufficient cash demonstration might result in rejection.
Required Documentation for Loan Application
With the recent surge in Indian students studying abroad, the demand for loans has also significantly increased.
To sanction the loan, banks validate the information provided by the applicants.
The applicants, in turn, need to furnish a list of documents, including:
- Admission letter from university/institution
- 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
- Bank account statements (last year)
- Income proof of the guarantor
Note: Document requirements might vary depending on the bank’s policies. Hence, always cross-verify the list of required documents with your chosen bank.
Eligible Courses for Student Loans in Canada
Banks provide loans to students applying for undergraduate, master’s, or research programs at established institutions.
They also finance SPP projects. However, nationalized banks usually refrain from offering loans for vocational, short-term, or diploma programs.
To ensure recovery of their loan, banks prefer lending for job-oriented courses.
Loan Eligibility Criteria for Studying in Canada
Before jumping into the loan application, ensure you fulfill the eligibility criteria. All banks generally consider the following:
- The borrower must be an Indian citizen.
- The applicant must have secured admission to a recognized overseas university or institution.
- The loan applicant must be over 18 years old, or their parents must apply for the loan.
- The applicant must have secured admission to a professional course.
Repayment commences one year or six months after course completion or when the candidate secures a job, whichever is earlier.
The loan must be repaid within 5 to 10 years once repayment begins. Repayment terms, however, can vary based on the bank’s policies or the criteria covered by the loan scheme.
Expenses Covered by Education Loan
Banks offer a variety of student loan programs. Therefore, understand which scheme suits your requirements.
Different schemes cover different expenses, so it is essential to check with the bank about the other expenses, apart from tuition fees, covered under the loan.
The list to save space.
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