Did you know that Canada is home to over 100 universities and colleges, offering a diverse range of programs to international students? Studying in Canada can be a life-changing experience, but it often comes with a significant financial burden. This is where education loans for Canada come into play.
Education loans in Canada provide a vital lifeline for students seeking to pursue higher education without the massive financial responsibility. Many loan providers offer different kinds of loans for students that want to study in the country, covering tuition fees and living expenses. These loans have numerous benefits for borrowers, including high loan amounts, lower interest rates, and tax advantages. In this article, we will explore the different types of education loans available, including secured and unsecured loans, and the application process for securing these loans.
About Education Loans in Canada
Education Loans to study in Canada are a way for students to pursue education in the country without the massive financial responsibility. Many loan providers offer different kinds of loans for students that want to study in the country. These loans cover Tuition Fees and living expenses, so students do not have worry about these expenses. The education loan has lot of benefits for borrowers depending on its types. Let’s take a look at the different types of Education Loan.
Types of Education Loans
Secured Education Loans
Secured Education Loans are taken against some sort of security or asset. These loans can be taken for a large sum of money. A secured education loan has a long repayment tenure that allows students to get their repayment plan in order by securing a job after they have completed their education. For a secured education loan, the borrower needs to have equal collateral. This is a secure loan option for international students planning to study in Canada.
The benefits of a secure education loan are that it offers a high loan amount, lower rate of interest and it offers a tax advantage for the borrower or co-signee. For students, the loan helps them to become more financially responsible by inculcating financial discipline. In India the maximum amount of secured loan for education is around Rs.1.5 to Rs. 2 Crores. The rate of interest for such a loan is 9% to 13% depending on the collateral.
Unsecured Education Loans
Unsecured Education Loans are loans that do not require a security or collateral to get the loan. This kind of education loan is offered based on the borrower’s creditworthiness and their employability potential in case of an education financing solution.
The benefits of taking an unsecured loan include, preadmission loan, pre visa disbursement for all countries. Students do not need to pay EMIs during the moratorium period. The loan offers 100% finance, there is flexibility in payment with an option for pre-payment as well it also has faster processing. In India the maximum amount of unsecured student loans for studying abroad that are allotted range from Rs. 40 Lakhs to Rs. 75 Lakhs. The rate of interest for unsecured loans ranges from 10% to 14%.
Application Process for Education Loans in Canada
Step 1: Conduct Research to Choose the Lender
Before applying for loans, students need to have an offer letter and then they can compare different lenders based on factors like maximum loan amount, rate of interest, loan tenure, moratorium period and time to sanction the loan.
Step 2: Fill the Loan Application
You can apply for a loan in person at the bank or online through the bank’s website.
Step 3: Prepare for the Interview
The process of procuring an education loan requires the applicants to appear for a face-to-face interview. The interview is generally taken by the bank with the intent to know about the candidate’s performance, about the degree, possible income in the future on which the loan is dependent.
Step 4: Gather Documents
The bank also asks you to provide some documents as a part of bank’s education loan procedure. Candidates need to submit the offer letter provided by chosen university. The bank will also verify the same.
Step 5: Loan Approval
Once the bank has verified a student’s credentials, the student loan may get approved. The candidate’s parents or guardian are listed as cosigners and the cosigners details are also verified by the bank before approving the loan. Along with that the applicant also signs a promissory note and other documents as assurance to the bank that the loan will be repaid in the given tenure.
Step 6: Loan Disbursement
This is the last step of the process. Once the formalities are completed, the bank disburses the loan amount directly into the bank account of the university that the applicant wants to attend. It can be done partially or fully at once.
In conclusion, education loans in Canada offer a vital lifeline for students seeking to pursue higher education without the burden of financial responsibility. With options ranging from secured to unsecured loans, students can choose the best fit for their needs. Secured loans provide a higher loan amount and lower interest rates, while unsecured loans offer flexibility in payment and faster processing. For international students, Canada Student Visa requirements can be met with the right loan options. By understanding the application process and choosing the right lender, students can secure their financial future. To know more about the loans, students can reach out to education loan experts that can guide them for a secure and assured loan acquisition.
