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An Overview of Canada GIC Process

Majority of Indian students prefer Canada, one of the most promising overseas destination to pursue their higher education when it comes to studying in a foreign country. Along with diverse landscapes, snow-capped mountains and beautiful lakes, the country is known for providing world class education. The country is a home to some of the top global institutions that offers excellent quality of education at an affordable cost. The country offers degree and diploma courses at bachelor’s and master’s level. 

The annual cost of studying an under graduate course in a Canadian institution for Indian students ranges between CA$14,000 to CA$26,000 whereas for postgraduate courses the cost ranges between CA$14,000 to CA$24,000 annually. To fund an international course in Canada, Indian students can opt for any type of the two education loan to for studying in Canada i.e., Secured and Unsecured Education Loans. 

Although deciding to pursue higher education in an overseas university is an expensive choice however there are various ways to fund an international degree. Right from private banks, government banks, NBFCs and international lenders, there are various financial institutions that offer an overseas education loan to Indian students for studying in Canada. In an overseas education loan, GIC is an important factor. Let us understand the term.

What is GIC?

Guaranteed Investment Certificate (GIC) is term referred to the proof of living expenses of students planning to study in Canada for pursuing higher education. GIC is a short-term liquid investment for 12 months that are offered by the Canadian banks with a guaranteed rate of return. 

To cover the living expenses of one-year, Guaranteed Investment Certificate (GIC) is an assurance for having sufficient funds of C$10,000. This is especially for Indian students willing to pursue education in Student Direct Program (SDP) category. After reaching to Canada, the GIC funds are released periodically in the students account to support their living expenses during their stay in Canada. Aspirants can open a GIC account in any of the five Canadian Financial Institutions i.e., Canadian Imperial Bank of Commerce, Scotiabank, SBI Canada Bank, ICICI Bank Canada and HSBC. To avail a study visa in Canada and purchase a GIC account, it is compulsory for study overseas aspirants to secure an admission in any of the Canadian institution. The living expenses are referred as GIC expenses in the Canadian education loan and the education loan from any of the financial institution covers 100% of the GIC expenses.

Requirement of GIC under SDS

The amount required to fund the applicant’s GIC account with ICICI Bank or Scotia Bank in Canada should be transferred from the applicant’s account or joint account held by the applicant in India. Once the amount of C$10,000 is remitted into the GIC account with the bank in Canada, they will receive an 'Investment Balance Confirmation' in applicant’s investment account.

Upon arrival in Canada, applicants are required to visit the bank branches to complete the documentation formalities, i.e., to open a personal bank account with any of the bank where they have opened an account for the issuance of the GIC. Amount of C$2,000 will be deposited in the applicant’s personal account and C$8,000 will be deposited in his/her GIC account for a duration of 1-year. This amount will be later paid to the students monthly in equal instalments.

Applicants are required to remit CAD 10,000 to the Scotiabank for their Scotiabank Investment Account along with CAD 200 as an administrative fee. So, the total amount required for remittance is CAD 10,200.Funds transferred from the third parties is not acceptable. 

Factors to look at while applying for the education loans to study in Canada

The Canadian Embassy accepts two types of overseas education loan i.e., secured education and unsecured education loan. For secured education loan, applicants are required to pledge a movable or immovable property as an asset whereas for unsecured overseas education loan there is no security required against the education loan amount. 

The rate of interest in a secured education loan is less as the applicant is required to offer a security to the financial institution. For unsecured education loan, the ROI on a loan for higher education abroad is high. While choosing a financial institution, it is of utmost important to look at the factors like marginal cost, processing fees, moratorium period and processing time. 

Steps involved in an education loan process for Canada

Step 1: Applicants willing to pursue their higher education in a Canadian University are required to appear for the English language proficiency tests like IELTS, TOEFL, DET etc and secure a decent score. Based on applicant’s academic profile and scorecard of English language proficiency tests, they must apply to the chosen university for the interested course. 

Step 2: Once students receive an offer letter to study at the Canadian institution, they are required to apply for an overseas education loan at any of the financial institution. For this, they must begin preparing the docket of the required documents. 

Step 3: Students will submit the required documents to the financial institution and bank will sanction the education loan letter. 

Step 4: Now, in the case of secured education loan, it is time to initiate with the mortgage process whereas in case of unsecured loan, an unsecured loan agreement has to be signed. 

Step 5: After the successful completion of a mortgage process, the financial institution will initiate the disbursement process of an education loan.

Step 6: The disbursement process totally depends on the type of visa category a student wishes to apply for either Normal or SDS category. The university sends the letter of acceptance upon the receipt of tuition fees. 

Step 7: Now it is time to open a GIC account for showing the living expenses. It will be a proof that student have short-term liquid investment for one-year that can be utilized during their stay in Canada. Once the GIC account has been opened, students are required to make the payment of GIC and get the certificate. 

Step 8: After this entire process, students must fill the visa application for securing a student visa to study in Canada. After submission of the same to the Canadian Embassy, students must get a visa approved and they will be ready to fly to Canada for fulfilling their dream of studying overseas.

Thing to keep in mind before applying for an education loan for Canada

Canadian universities ask for pre-visa disbursement hence it is advisable to enquire with the financial institution whether they are ready to disburse the tuition fees of 1 year or 6 months and living expenses of 12 months in prior. 

How will E’LAN Loans help in this entire process?

We at Elan Loans strive for providing the best education loan services to the study overseas aspirants. We understand that the education loan process of Canada is quite daunting, hence we will be there to guide you at every step. We have direct tie-ups with the financial institutions, and this will also speed up the entire education loan process of Canada. Hence it is recommended apply study loan for abroad studies to avail free assistance from the education loan experts at ELAN.

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