Education Loan to study Master in Canada

Canada is among the top five study overseas destinations owing to its excellent quality of education, high standard of living, work opportunities, and flexible student-friendly policies. According to Immigration, Refugees and Citizenship Canada (IRCC), the number of new study permit applications from international students increased by 28% in the year 2023.

With the top-notch Canadian institutions offering postgraduate courses in a variety of subjects and specializations, more and more students are attracted to this quintessential study-abroad destination. The value of a Canadian education is unparalleled, making the investment of studying in Canada truly worthwhile. However, it comes at a major cost attached to it, and students are often on the lookout for ways to fund their Canadian education. In this blog, we are going to discuss the overseas education loan that can help them achieve their Canadian dream. Let us start by understanding the cost of education in The Great White North.

Cost of Education

While pursuing a master’s degree in Canada, many factors come into play. International students are required to bear all the costs, including pre-arrival expenses, tuition fees, living costs, transportation, academic-related expenses, and basic utilities. Let us look:

• Health Insurance: CAD 600-CAD 900 per year
• University Application Fee: CAD 50-CAD 250
• Standardized & Language Proficiency Tests Fees: CAD 100-CAD 300
• Purchase of GIC (one-time): CAD 20,635
• Biometric Student Visa Fee: CAD 85
• Visa Application Fee: CAD 235 (it includes Visa fees of CAD 150 + Biometric fees of CAD 85)
• Tuition Fees: CAD 17,000-CAD 23,000 per year (depending on the chosen course)
• Accommodation: CAD 3,000-CAD 7,500 each year
• Study Material: CAD 500 or more per term
• Phone Subscription: CAD 1200 per year
• Miscellaneous: CAD 1000-CAD 2000 per year

To cover the cost of studying in Canada, students can apply for an overseas education loan. Moving ahead, let us discuss that in detail:

Types of Education Loans

Secured Education Loan: A Secured Education Loan is the kind of loan that requires the applicant to provide collateral security against the education loan amount. The Collateral was pledged to the lender as security should be equal to the loan amount. Applicants can pledge tangible assets and intangible assets like land, fixed deposits, government bonds, non-agricultural land etc. The amount of the education loan granted would depend on the value of the collateral security.

Unsecured Education Loan: An unsecured education loan is one where the applicants are not required to pledge any security to the financial lender to avail of the loan. Instead, a co-applicant is required on whose income determines the probability of loan sanction. The processing time of an unsecured education loan is quicker, and applicants are not at risk of losing assets in case of default.

Eligibility Criteria

To fund higher education in Canada through an overseas education loan, students are required to fulfill certain requirements. Listed below are some of them:

• Students must have an acceptance letter from a recognized Canadian institution for a full-time degree/diploma program.
• Student must be of or above 18 years of age. In case the applicant is below 18 years of age, his/her parents will be required to apply for education loan for Canada.
• The student should possess an outstanding academic track record throughout their studies.
• The applied course must be job-oriented or have good career prospects.
• In the case of a Secured Education Loan, students are required to pledge some kind of collateral security against the education loan amount.

Expenses Covered Under Education Loan

An overseas education loan for studying in Canada typically covers a range of expenses, including tuition fees, accommodation expenses (Rent, utilities, etc.), cost of study materials and books, health insurance, travel expenses (one-time or periodic), and other academic-related costs.

Required Documents for Education Loan

To apply for overseas education loans without Collateral or with Collateral in Canada, students are required to submit a set of documents. Let us look at the list:

• Acceptance letter or Proof of Admission from the Canadian Institution
• Application form for the student loan
• Passport size photographs
• Identity proof (Valid Passport, Voter ID, Driving License, Adhaar Card)
• Age proof
• Academic transcripts and certificates
• Exam scorecards (GMAT/ GRE/ IELTS/ TOEFL)
• Permanent residence certificate of both student and guarantor
• Bank statements for the last one year
• Guarantor’s proof of income
• Other optional documents, depending on the financial institution

Leading Education Loan Providers

There are various premier financial institutions that offers overseas education loan for Canada in India. Let us take a look at the popular ones:

• Nationalized Bank: State Bank of India, Bank of Baroda, Bank of India, Bank of Maharashtra
• Private Banks: Union Bank, Punjab National Bank, Saraswat bank, ICICI Bank, IDFC First Bank, Axis Bank, Yes Bank, HDFC Credila
• NBFCs: Avanse Education Loans, Auxilo, InCred
• International Lenders: Tata Capital, MPower Financing, Prodigy Finance

Education Loan Process

Applying for an overseas education loan process can be lengthy; thus, it is advisable to begin with the application process as soon as the student receives the offer letter from the university. Some of the steps involved are as follows:

• Step 1: Research & Finalize the Financial Institution
• Step 2: Fill out the Loan Application Form
• Step 3: Appear for the round of discussion with the Bank Officials
• Step 4: Provide supporting Documents
• Step 5: Approval or Denial of Loan
• Step 6: Disbursal of the Loan

Repayment of Overseas Education Loan

Students can repay the overseas education loan for Canada at any time during the duration of their academic program or six months after completion of it. This six-month period after the completion of the academic program is known as the 'grace period '. If students manage to pay off the loan fully before the end of the degree course, the respective financial institution won’t be charging any interest. At the end of the grace period, students receive documentation from the government detailing the interest rate and the repayment amounts.

This was all about an overseas education loan in Canada! Applying for an education loan can be a time consuming and lengthy. Thus, we recommend students to connect with education loan consultants for abroad education who offers end-to-end assistance in the complete education loan process. Students with excellent academic records can also apply for scholarship for masters in Canada and fund their degrees and help reduce the burden. Although these are quite competitive in nature, some other ways are bursaries, fellowships and government funds. So, take the steps toward fulfilling your study abroad dream in Canada.