Studying abroad is a huge financial commitment. And unfortunately, not everyone who wishes to study abroad can afford it. The cost of studying abroad not only involves the tuition fee but living expenses as well. Financial aid such as Education or Student Loans is a boon for those who want to study abroad. Let’s explore what it takes to apply for a Student Loan in Canada, from the process and documents required to expenses covered and repayment.
How to get an Education Loan for Studying Abroad?
What is a Student Loan?
A student loan is a reserve fund that a student receives from the government, or a private company, for covering tuition or other educational expenses. The loan must be paid back after the student graduates from the respective College/University with the interest amount.
Government loans tend to have lower interest rates as compared to private lenders. The student can return the loan amount when he/she starts earning. The waiting period is known as the moratorium period. Student Loans are supposed to cover tuition fees, accommodation fees, books, and supplies, examination fees, travel expenses, and other miscellaneous charges.
Why Do you Need a Student Loan?
Due to expensive educational courses and lack of funds, many students choose to get a student loan. Keeping the tuition fees aside, there are various other costs that are to be covered in order to study abroad such as:
- English Proficiency Test Fees
- University Application Form Fees
- Visa Fees
- Passport Fees
- Flight Ticket Fare
- Health Tests (Biometrics)
- Bank Statements
- Post Admission Fees such as Accommodation
- Miscellaneous Fees such as counselling and more
Student Loans help students pay for college, fill financial gaps and provide the required funds to cover educational expenses. Some of the best Banks offering Student loans for Canada are as follows:
Benefits of Student Loan for Canada
The majority of Indian banks offer students loans for studying in Canada. Here are some of the major reasons why you should go for a student loan:
- Maximum loan amount up to INR 1,00,00,000
- Repayment period up to 10 years
- Moratorium period up to 1 year after degree completion or 6 months after getting a job
- Concessional interest rates for female students
- Unlimited tax deduction on the interest which you have paid for 8 years, under Section 80E of the Income Tax Act
Study loan in Canada interest rates
The following are the interest rates offered by top loan providers:
|Bank Name||Interest Rate (% p.a.)|
|Bank of Baroda||6.75|
|Union Bank of India||6.80|
|Central Bank of India||6.85|
|Bank of India||6.85|
|State Bank of India||6.85|
|Punjab National Bank||6.90|
Expenses Covered under Student Loan
As there are many banks that offer student loans in Canada, it is recommended to always check out the type of expenses offered by the respective Bank.
Different expenses are covered by different banks, so you should always find out what expenses are covered in the loan apart from the tuition fees. Common expenses covered under a Student Loan include:
- Tuition fee
- Travel expenses
- Cost of Study Material
- Laboratory fee
- Hostel fee
- Laptop Cost if required
- Expenses for project work or study tours
Collateral Rules for Student Loans in Canada
If the loan amount exceeds INR 7,50,000 then the actual assets are needed as collateral security. Parents are made to be co-borrowers for all student loans.
Eligibility for Student Loan in Canada
- You must be an Indian citizen
- You must have secured admission to a recognized international university/institution
- You must be 18 years or above, otherwise, your parents will have to apply for the loan
- You must have secured admission to a professional course
Documents Required for Student Loan in Canada
- Identity documents such as KYC, Citizenship, Regional domicile, and Residence proofs
- Last qualification mark sheets score card, degree or diploma
- Latest admission proofs
- Basic qualification records (HSC/10th/12th passing records)
- Bank Statements
- Income Tax documents
- Collateral Documents
- Application form
- Guarantee forms
- Subsidy application forms
Repayment of Student Loan in Canada
Repayment of Student Loans starts after a period of 1 year or 6 months, post the completion of the course once you get the job. The loan amount has to be repaid in 5 to 10 years once the repayment starts. The repayment period varies according to the Bank.
How to Apply for a Student Loan in Canada?
Applying for a Student Loan is not only complicated but a time-consuming task. So, in order to avoid any last-minute rush, you should always start applying for a loan as early as possible. Post receiving the acceptance letter from the university, you’ll get an idea of the total cost of studying and living in Canada. Figure out the amount required to finance and how much you will be spending on your own.
Thoroughly research before applying for a Student Loan and identify which banks offer the best deals on student loans. Keep the following points in mind before applying to any Bank:
- Interest rate
- Processing fee
- Expenses covered
- Loan processing time
- Prepayment terms and duration
Student Loan for Canada SBI
SBI offers many education loan scheme for students. SBI Global Ed-Vantage is an overseas education loan that allows students to pursue a pull-time course in a foreign university. This applicable for many countries including Canada.
Features of SBI Global Ed-Vantage Scheme
- Faster online application process
- Provides attractive interest rates
- Easier repayment options through EMIs up to 15 years
- Provides maximum loan amount up to Rs. 1.50 Cr.
- Provides tax benefits under section 80E
- Easy loan approval
Finance Your Study Abroad Dream with Leverage Finance
Fulfil your study abroad journey in Canada dream with affordable loans from Leverage Finance. Here’s why you should choose Leverage Finance for student loans in Canada:
- Provides dedicated Loan Experts
- Offers the best interest rates
- No Service Fee
- Multiple loan providers
- Prepares comparative analysis
- Offers collateral-free student loans
To begin your Study Abroad Journey in Canada, reach out to Leverage Edu and our experts will provide you with end-to-end assistance for planning your abroad education!