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Overseas Education Loan for Studying in Canada: A Comprehensive Guide

Over the years, Canada has emerged as one of the top-notch study destinations for international students due to its world-class education system, diverse culture, and welcoming environment. However, pursuing higher education in a country like Canada can be financially challenging for many study abroad aspirants. To overcome this hurdle, education loans have become a popular choice for funding overseas education, and leading financial institutions readily offer a variety of foreign education loan options for students aspiring to study in Canada.

So, if you are planning to study in Canada soon, this article is for you! Keep reading to find out everything related to education loans to study in Canada with our comprehensive guide.

Cost of Study in Canada

Before diving into the intricacies of education loans, it's essential to understand the cost of studying in Canada. Tuition fees, accommodation, living expenses, and miscellaneous costs can add up, making financial planning fundamental for international students.

Canada's education system is renowned for its affordable study options when compared to other popular study destinations. The tuition fees vary based on the program, institution, and level of study. For instance, undergraduate programs are generally more affordable than graduate programs. Moreover, the cost of living differs across cities, with metropolitan areas having higher living expenses than smaller towns. To cover your cost of living in Canada, according to the immigration rules of this country, you will have to create a GIC account. Let’s discuss more about this concept of GIC ahead.

Guaranteed Investment Certificate (GIC): An Overview

International students who have paid their tuition fees to Canadian Institutions will have to create a GIC account with CAD$ 10,000 to show proof of their living expenses. To simplify the GIC concept for you, it is a short-term liquid investment for a period of one year offered by Canadian banks with a guaranteed rate of return. Creating a GIC account is a mandatory requirement for the visa application process to study in Canada.

GIC accounts can be created online in the banks like Scotiabank, ICICI Bank Canada, HSBC, SBI Canada Bank, and the Canadian Imperial Bank of Commerce (CIBC). Once this account is created, the student will have to deposit CAD$ 10,200 (CAD$ 200 is the processing fee). After the deposit is done the student will receive an 'Investment Balance Confirmation'. Students can start the visa application after this confirmation.

Once the student is in Canada, he/she will have to create a personal bank account with an ICIC Bank Canada or Scotia Bank branch. The first deposit will be CAD$ 2,000 in the student's personal account and the remaining CAD $8,000 will be deposited in GIC. These funds are given in CAD $ 666 each month to support the student's living expenses.

GIC is covered in the education loan, so let’s get to know the types of Education loans available to study in Canada.

Types of Overseas Education Loans for Studying in Canada

Study abroad aspirants can explore two main types of loan financing options for their Canadian education, they include:

  1. Secured Overseas Education Loan (Education Loan with Collateral)
  2. A secured education loan requires the applicant to provide collateral as security against the borrowed amount. Collateral can be in the form of property, fixed deposits, or any other asset of value. Since the loan is backed by collateral, financial institutions often offer lower interest rates and higher loan amounts. Thus, the study loan for Canada interest rate will be quite realistic.

  3. Unsecured Overseas Education Loan (Education Loan without Collateral)
  4. In contrast, an unsecured education loan does not necessitate collateral. As a result, the loan approval process might be quicker, and applicants are not at risk of losing assets in case of default. However, unsecured loans usually come with higher interest rates and may have lower borrowing limits. Taking an education loan without collateral for Canada will be a suitable option for you if you don’t have any collateral security to pledge.

List of Expenses Covered Under Canada’s Education Loan

An education loan for studying in Canada typically covers a range of expenses, these include.

  • Tuition fees
  • Accommodation expenses (Rent, utilities, etc.)
  • Cost of study materials and books
  • Health insurance
  • Travel expenses (one-time or periodic)
  • Other academic-related costs

It is essential for loan applicants to have a clear understanding of the expenses that the loan will cover and prepare a budget accordingly. Furthermore, let’s discuss the study programs that are eligible for an education loan.

Study Programs Eligible for an Educational Loan

Most education loan providers extend their financial assistance to a wide range of study programs in Canada. These programs usually include:

  • Undergraduate courses
  • Postgraduate courses(Rent, utilities, etc.)
  • UG & PG diploma programs
  • Doctoral programs
  • Vocational and technical courses

Before applying for a loan, students must ensure that their chosen program is eligible for financial support through their preferred loan provider. So, if you are taking an education loan for PG diploma in Canada or for any other course, discuss it with your financial lender first.

Leading Banks & Financial Institutions Offering Education Loans for Canada

A plethora of banks and financial institutions in India offer education loans for studying in Canada. Some prominent ones include:

Nationalised Banks 
State Bank of India, Bank of Baroda, Bank of India, Union Bank of India, Bank of Maharashtra 
Private Banks
Axis Bank, ICICI Bank, IDFC First Bank
Co-Operative Banks
Saraswat Bank
NBFCs 
HDFC Credila, Avanse, Incred, Auxilo, Credenc
International Lenders 
MPower Finance, Prodigy Finance

Team ELAN caters exclusively to the needs of study abroad aspirants, making the loan application process smoother and more tailored to any of these best banks for education loan for abroad studies.  

Eligibility Criteria for Loan Applicants & Co-Applicants

To be eligible for an overseas education loan, applicants must meet certain criteria. These criteria can vary slightly among lenders, but the common eligibility requirements include the following.

  • Indian citizenship
  • Acceptance into a recognized institution or program in Canada
  • Satisfactory academic record
  • Co- applicant's financial record (usually parents or guardians)
  • Collateral, if applicable

Documents Required for Loan Application

Education loan applicants need to submit specific documents to facilitate the loan application process. The documents required for study loan for Canada typically include:

  • Admission letter from a Canadian institution
  • Completed loan application form.
  • Academic records (transcripts, certificates, etc.)
  • Passport-sized photographs
  • Proof of identity (Aadhar card, passport, etc.)
  • Proof of address (utility bills, rental agreement, etc.)
  • Proof of income of the co-applicant (salary slips, ITR, business registration certificates, etc.)
  • Collateral-related documents, if applicable

Overseas Education Loan Application Process

The application process for an education loan to study in Canada can be divided into the following steps:

  • Research: Gather information about various loan providers, their interest rates, terms, and conditions.
  • Compare & Shortlist: Compare the offerings of different lenders to choose the most suitable loan for your needs.
  • Application: Complete the loan application form and submit it along with the required documents.
  • Verification: The lender will verify the provided information and documents.
  • Loan Sanction: Upon successful verification, the loan will be sanctioned, and the terms will be communicated to the applicant.

These steps might be overwhelming for many reasons, and that’s when team ELAN comes to your rescue. Our highly qualified team will assist you through this loan application process to ensure that you have a hassle-free experience.

Loan Sanction & Pre-Visa Disbursement

Once the loan is sanctioned, the applicant will receive a loan agreement that outlines the terms and conditions of the loan. It is essential to review this document thoroughly before proceeding to the loan disbursement.

To apply for a Canadian visa, you will require a pre-visa loan disbursement. As you might already be aware, the guidelines of the visa process are given by Canada Immigration Authorities.

To keep up with the visa requirements, it is mandatory to get a Guaranteed Investment Certificate (GIC) of CAD$ 10,000. This is proof that you will be able to cover the living expenses for the first year of your stay in Canada. It is also compulsory to provide proof of payment of the tuition fee for one semester or a full year depending on if you are applying for your visa via the general category or the SDS category.

Thus, pre-visa disbursement is essential for the visa application process and successful visa approval for studying in Canada.

Studying in Canada can be a fantastic experience, and securing the right education loan is a vital step in executing this aspiration. With multiple options available, you as a study abroad aspirant should carefully assess your financial requirements and explore various lenders to find the best fit.

ELAN is a specialized education loan advisor that understands the unique needs of study abroad aspirants. With our expertise and personalized approach, we guide students through the loan application process, ensuring a seamless experience and increasing the chances of loan approval.

As you are planning on this exciting journey of studying in Canada, remember that the right education loan can be an added advantage in turning your aspirations into reality. Connect with team ELAN at the earliest and get started with your education loan for masters in Canada or any other course that you are planning to take.

FAQs

  • What type of overseas education loans can students take for studying in Canada?

    Study aspirants to study in Canada can take either Secured Overseas Education Loan or Unsecured Overseas Education Loan.

  • What kind of expenses will be covered by Canada’s education loan?

    For studying in Canada, an education loan will typically cover a range of expenses like tuition fees, accommodation expenses, cost of study materials, books, health insurance, travel expenses and other academic-related expenses.

  • I am pursuing a PG diploma from Canada; will my program be eligible for an education loan?

    Yes, all kinds of study programs are eligible for an educational loan to study in Canada.

  • What are the basic eligibility criteria for education loan applicants & co-applicants?

    The common eligibility requirements for taking an education loan include having Indian citizenship, acceptance into a recognized institution or program in Canada, a satisfactory academic record, the co-applicant's financial record and collateral security if applying for a secured loan.

  • Is it essential to take a pre-visa disbursement?

    Yes, it is mandatory to take a pre-visa disbursement as you will have to give proof of your living expenses. After creating a GIC account, you can apply for your student visa.

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