Education Loan
Canada has been one of the top-most preferred international study destinations, along with the US, the UK, and Australia, for Indian students going abroad for higher studies. Some reasons that motivate Indian students to study in Canada are its welcoming immigration gateway, lower tuition fees, and living costs, multicultural environment, etc.
However, the expense involved in studying in any foreign country is always substantial. Moreover, recent statistics point out a hike in tuition fees in Canadian universities for international students. The undergraduate tuition fee in Canada has increased by 7.6%, while the tuition fee for postgraduate programs in the country has risen by 4.4% in 2019-2020. In 2019-2020, the average annual undergraduate tuition fees in Canadian Universities for international students was CA$29714. Students enrolling for an undergraduate degree in Engineering had to pay approximately CA$33,703, while those enrolling for graduate programs had to pay an average annual tuition fee of $17,744.
Why Relying on Personal Funds is not a Smart way to Finance your Education in Canada?
As the above numbers suggest, the cost of higher education in Canada is certainly not pocket-friendly. Students need to make arrangements for funds if they wish to make their dream of studying in Canada come true. But if you are thinking of dipping into your or your parents’ personal funds to finance your higher education in Canada, then stop right there, and read ahead. An education loan for Canada is the most feasible option to finance your studies abroad. Let us see the advantages of taking an education loan instead of dipping into your personal savings.
How can Study Loan for Canada Serve to be a Feasible option to Finance your Education?
Contrary to the popular perception of an education loan being a burdensome affair for those taking it, it, in fact, has multifarious advantages that help you finance your study abroad dreams easily. The following are the reasons why you should opt for an education loan for studying in Canada.
- As mentioned earlier, it safeguards your personal savings that can be used for exigencies.
- Students who take an education loan from a gazetted financial institution will also get tax benefits under Section 80E of the Income Tax Act of India. This consequently reduces the rate of interest to be paid and students can use this deduction for 8 years.
- Taking an education loan and repaying it on time helps a student build his/her credit score. A good credit score can later be used for borrowing funds in the future.
- Many countries including Canada require students to show proof of funds for the entire program. Additionally, most visa authorities require proof of the regular flow of funds for granting a study visa. Both these become easier to show with an education loan.
- Most lenders also provide top-ups on education loan to meet unexpected additional expenses.
What are the Different Study Loans for Canada?
Now that our readers have a clear understanding of why taking an education loan is better than self-financing their study in Canada, let us also throw light on the different kinds of education loan options for Canada.
- Secured Education Loan – It is also known as an education loan with collateral. In this loan, the borrower (the student) has to offer security or collateral while applying for the loan. This collateral can be a tangible or intangible asset such as immovable property, mutual funds, ULPIS, FDs, etc. The bank uses the collateral to recover the loan amount in case the loan becomes a Non-Performing Asset (NPA), that is if the borrower fails to repay the loan.
This kind of loan has a lower rate of interest and longer repayment period too. Also, the borrower does not have to repay the loan during the period of study. An education loan with collateral does take a longer time for approval since all the documents related to the security being offered need to be verified by the bank. However, the chances of approval for such loans are very high. Public and private sector banks, as well as NBFCs, provide secured education loan for higher education in Canada.
- Unsecured Education Loan – In this kind of loan, the student does not have to pledge any security while applying for a loan. This loan has a higher rate of interest and shorter repayment time and requires some repayment to be made during the study period too. Another requirement for this loan is parental income. Students should remember that public banks have an upper loan amount of INR 7.5 lakhs for an unsecured loan. Private banks, like ICICI and Axis Bank, on the other hand, have an upper loan limit of INR 40 lakhs for an unsecured loan. NBFCs do not have an upper limit on education loans without collateral, and it is decided on a case-to-case basis.
Why Apply for Education Loan for Canada Via GyanDhan?
Readers should now be aware of the different education loan options available for studying in Canada and must be wondering about how to apply for an education loan. Well, they can certainly approach the lenders directly. However, many a time, students are not clear about which loan to choose or end up taking a loan with not so favorable terms and conditions. Students are often unaware of the documents that are needed with their loan application. All these lengthen the loan process unnecessarily. To avoid such a scenario, they can get in touch with GyanDhan and make their entire loan application and sanction process easier. Let us list down the process as well as the advantages of applying for a loan through GyanDhan:
- Students can first check their loan eligibility here or request a callback.
- GyanDhan assigns the student’s case to their education loan counselor. The loan counselor studies the profile of the student and then discusses all the possible study loans for Canada available to the student. They also suggest the best option among all the possible ones.
- The loan counselor offers a customized list of documents that the borrower needs to submit along with your loan application. This list varies from case-to-case. This step is extremely important as any missing or incomplete documents may lead to the rejection of the loan application. Therefore, taking GyanDhan’s help here is extremely important to avoid any such pitfalls.
- The student is then required to submit the application. GyanDhan even helps students at this step by picking up their documents from their home in case they live in a metro city and have chosen to apply to a Public bank. If the student lives in any other city and has applied to a public bank, GyanDhan coordinates with the respective bank manager and arranges for a meeting. Students who have taken their loans from a private bank will have GyanDhan’s banking partners picking up documents from their home. While in the case of NBFCs, students only need to submit the documents online by using the online document upload facility on GyanDhan’s website.
- Once the loan application is submitted, the lender reviews it and approves if it meets their requirement. GyanDhan coordinates with the bank and expedites the loan sanction time and also negotiates with the lender to increase the loan repayment time upon the request of the borrowers.
- Once the loan application is approved, the student has to accept the loan offer by signing the document and paying the relevant processing fees.
- GyanDhan is aware of the pre-visa disbursement rule mandated by several foreign countries. In such cases, GyanDhan lets the bank know about such clauses and gets the loan disbursed before the issue of visa.
- GyanDhan’s role does not end only with the sanction of the loan. They continue to provide the borrower with their assistance until the entire amount is disbursed. The borrower can also take their help if the disbursements are not made on time or are withheld.
- Most importantly, all of the aforementioned services are provided to the students absolutely for free!
Which Study Loan for Canada is the most preferred option as per GyanDhan?
GyanDhan recommends its readers to opt for a secured education loan from a public sector bank. These loans have comparatively lower rates of interest and also longer repayment periods. However, if you are unable to attach collateral, then you can bank on private banks ( if your tuition fees are under 40 lakhs). An education loan for Canada from NBFCs should be the last option.
Over the years, GyanDhan has helped hundreds of Indian aspirants make their study in Canada dream a reality with a favorable study loan. Get in touch with GyanDhan now and make your dream a reality too!
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