Education Loan to Study in Canada

Canada is a popular destination among international students worldwide due to its excellent universities that provide a wide range of experiences and opportunities. However, pursuing higher education in Canada can be expensive. As we all know Canada is a very popular study-abroad destination among Indian Students.

The tuition fees for different programs and courses vary, but the average cost for international graduate students is around CAD 21,000. In addition to tuition fees, you'll also need to budget for living expenses. This is when abroad education loan comes into the picture. Abroad education loans are also considered to be one of the best ways to show proof of funds for Canadian student visas.

Before we begin with the abroad education loans for Canada, let us first understand the living cost in Canada for an international student:

Important points related to living costs in Canada:

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  Travel: Costs depend on the city and the availability of public transit passes. Many universities offer subsidized student passes for traveling.

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  Food: Varies based on eating habits and whether you cook at home or eat out.

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  Health Insurance: Mandatory for international students.

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  Accommodation: Depends on whether you live on-campus or off-campus.

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  Utilities: Includes electricity, water, and internet, which can vary based on your housing type and location.

Types of Abroad Education Loans for Canada 

Broadly, the abroad education loan options for Indian students to study in Canada fall under two brackets:

Secured Education Loan:

A secured education loan is also known as an education loan with collateral. This is a loan where the applicant pledges security along with the loan application. This security can be movable assets (Fixed Deposits, LIC Insurance, and more) or immovable assets (non-agricultural land, residential property, or commercial property). Almost all the public banks in India require collateral to provide you with an abroad education loan.

Want to know more about different types of collateral security?

Unsecured Education Loan:

An education loan that does not ask the borrower to pledge collateral as security is called an unsecured education loan. Not having security leads to an increased risk for the financial institution and that is why you will usually find the rate of interest of these types of loans on a higher side as compared to secured education loans. These loans also demand a co-applicant or co-signer. It is on the basis of the co-applicant’s income and CIBIL score that the loan is.

Note: The types of lenders that you can find with GyanDhan include public banks, private banks, NBFCs, and international lenders.

Secured Education Loans for Studying in Canada 

As discussed secured loans are those in which you would need to pledge security as a security. This helps to ensure that you are able to get a higher loan amount when compared with the other loan option which is an unsecured education loan. Pledging security can also benefit you in a way that you will not need a co-applicant for your loan. There are two public sector banks that you can consider to take an education loan for Canada. These are the State Bank of India (SBI) and the Union Bank of India (UBI).

A comparative analysis of these 2 banks in consideration of education loans for Canada has been shown below:

Unsecured Education Loans for Studying in Canada

In case you do not have collateral to pledge, you do not have to worry because there are many private banks, NBFCs, and international lenders that are available which can help you in this scenario. For private banks and NBFCs, you may need a co-applicant/co-signer with a minimum financial income without obligations, but in the case of international lenders, you can get a loan without a co-applicant and collateral. The benefit that you will have by choosing international lenders is that they will provide you loans to study in Canada in CAD that will help you to save forex charges and more such costs but then their interest rate is high.

Thus it can be said that every lender that can provide you with an education loan to study in Canada has their own pros and cons. In order to help you choose an effective lender we have developed a comparative table for all the potential lenders that can provide you with unsecured abroad education loans. The unsecured education loan is applicable for all Bachelors, MBA, Masters, and PGDM courses.

Let us compare the unsecured education loan options from various banks and NBFCs from the table below. Please note that these rates are as of January 2025 and may change.

Study Programs Eligible for an Educational Loan for Canada

Various programs are eligible for education loans in Canada. Here are some of them:

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  Undergraduate courses
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  Postgraduate courses
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  UG & PG diploma programs
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  Doctoral programs
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  Vocational and technical courses

Before applying for a loan, students must ensure their chosen program is eligible for financial support through their preferred loan provider.

Loan Sanction & Pre-Visa Disbursement Process

After the loan is sanctioned, the applicant will receive a loan agreement that will list all the terms and conditions. Please go through the documents carefully before proceeding with the loan disbursement.

For the Canadian visa, you need to have a pre-visa loan disbursement as mentioned in the guidelines of the visa process given by Canada Immigration Authorities. 

Expenses Covered by Abroad Education Loan for Canada 

It is up to you to either take the disbursement of the whole sanctioned loan amount in one go or you will be getting periodical disbursal as per your requirement. Later is preferred, to ensure that you do not end up taking out an additional amount as this will lead to an increased interest. The interest is charged on the disbursed amount not the sanctioned amount.

The expenses that may be covered under loan as per the lender will include:

Eligibility to Get Abroad Education Loan for Canada

To obtain an education loan in Canada as an international student, there are certain prerequisites that must be met.

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  Applicant must have Indian citizenship.
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  These include having a confirmation of acceptance from a recognized Canadian institution for a full-time program
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  You should be at least 18 years old. 
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  Must have a good academic record.
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  Additionally, the chosen course of study should have strong career prospects in relation to unsecured loans, and for secured loans, collateral must be provided.

Documents Required for an Abroad Education Loan to Study in Canada

In addition to the prior mentioned eligibility requirements, it is imperative for students to verify that they possess all the necessary documents prior to obtaining an abroad education loan in Canada. The document list can be exhaustive and that is why GyanDhan also provides you with a customized document checklist that can help you fasten the document submission process. Some general documents which will be required to get a study abroad loan for Canada are:

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  Applicant’s KYC documents.
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  Proof of admission: admission letter from university/institution
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  Fee structure from the university 
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  Loan application form
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  Passport-size photographs
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  Income proof of the co-applicant (for unsecured education loan)
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  Academic transcripts (School and Bachelors)
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  Standardized test scores - GMAT or GRE
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  English proficiency test score - IELTS, TOEFL or Duolingo
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  Resident proof of the applicant and co-applicant
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  Property papers (in case of secured education loan)
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  Bank statement for the last 3 months