Student Loans for International Students in Canada
Canada stands out as an excellent study destination, offering a superb blend of high-quality education, breathtaking natural landscapes, and vibrant urban centres. The educational institutions emphasize practical skills and cutting-edge research, providing students with a well-rounded learning experience. Moreover, Canada’s inclusive and welcoming environment ensures that every student feels a sense of belonging, making it a great choice for academic pursuits. However, studying in Canada is not a walk in the park in terms of finances. In this article, we will be discussing student loans for international students in Canada.
International Student Loans in Canada
International students at Canadian universities often face limited financial aid options, as the majority of grants and scholarships are designed for Canadian students. Immigration, Refugees and Citizenship Canada (IRCC) expects international students to independently finance their studies in Canada. To get a Canadian study permit, international students need to show they can cover their expenses. For most provinces, a single student should prove they can pay tuition plus $10,000 a year. If bringing a family, add $4,000 per adult and $3,000 per child. Quebec has different rules, so check those if you plan to study there.
While personal savings and family support may cover a portion of the total expenses, many students turn to private student loans to bridge the gap, covering tuition fees and remaining costs. When applying for private student loans, lenders go beyond your credit history or that of a cosigner. They assess your academic achievements and career progress. Additionally, factors such as your home country, anticipated graduation date, and the institution you attend play a role in their decision-making process.
How do you get a Study Loan for International Students in Canada?
To secure an education loan in Canada as an international student, you should begin the process 6-7 months before your course commencement. Also, follow these steps for obtaining a student loan:
1. Explore providers providing loans for international students in Canada, understanding their eligibility criteria and required documents.
2. Calculate the total funds needed for your chosen course in Canada.
3. Obtain a letter of acceptance from your Canadian college/university.
4. Compare various loan options from different providers and select the most suitable one.
5. Once you’ve chosen a provider, finalize the loan amount and complete the loan application.
6. Review the loan document issued by the provider thoroughly before signing, ensuring agreement with all clauses.
7. Upon approval, the provider will disburse the agreed-upon loan amount.
Student Loans for International Students in Canada
1. Mpower Finance
MPower currently extends loans covering 100% of education and living expenses, with repayment starting 45 days after fund disbursement. During this initial period, payments are interest-only until graduation, followed by a six-month grace period. The remaining repayment spans 120 months. MPower Finance supports various degree programs, including Master’s, MBA, PhD, Bachelor’s, J.D., Diplomas, and associates (Canada only), LL.M, M.D., D.D.S., and select boot camps.
The fixed interest rate is 12.99% (13.98% APR¹), with a 0.25% discount for automatic withdrawal. These terms offer clarity and flexibility for students seeking financial support. To qualify for an MPower loan, international students must meet these conditions:
1. Admitted or attending one of the 400+ affiliated schools in Canada.
2. Graduate or undergraduate within two years of graduation.
3. Provide a valid, unexpired ID card.
4. Submit all required supporting documents.
2. Prodigy Finance
Prodigy loans feature a 6-month grace period post-study before initiating payments for students studying abroad. The repayment term spans from 7 to 20 years, supporting programs in Business, STEM, public policy, law, and health sciences. Prodigy Finance offers a minimum APR of 11.18%, with individual rates varying based on circumstances, loan amount, and term, averaging 14.88% for student loans. These terms provide flexibility for diverse programs. To qualify for Prodigy Financing, applicants must:
1. Gain admission to a supported school and program in the US, Canada, or the UK.
2. Be open to studying abroad.
3. Reside in one of the countries supported by Prodigy Financing.
3. Discover
Discover, until January 31, 2024, accepts student loan applications with features like a 1% cash reward for good grades, interest-only payments, and zero fees. However, it lacks pre-qualification, provides a single repayment term (15 years for undergraduates, 20 years for graduates), and lacks a co-signer release program. Discover offers a 0.25% interest rate discount for automatic payments and an additional 0.35% discount for interest-only payments during school. Borrowers can earn a 1% reward for achieving a 3.0 GPA or equivalent.
Repayment options include deferred payments, interest-only payments, and fixed payments. Eligibility requires enrollment in an eligible program at least half-time, a creditworthy U.S. citizen or permanent resident co-signer for international students, and adherence to academic progress criteria. Applicants must be at least 16 years old, intend to earn a degree, and submit a full application without pre-qualification. To be eligible:
1. International students require a creditworthy co-signer who is a U.S. citizen or permanent resident.
2. Enrollment must be at least half-time in an eligible program (bachelor’s, associate’s, graduate, MBA, law, or health professions) at an approved school.
3. Intent to earn a degree is a prerequisite.
4. Satisfactory academic progress must be maintained as defined by the college or university.
5. Applicants must be at least 16 years old at the time of application.
What is the Minimum Amount Required for International Students in Canada?
The minimum amount you need to study in Canada as an international student varies based on your degree program and the school you choose. Each institution has different tuition rates. On average, you can expect to pay around CAD20,000-CAD 30,000 per year for tuition, and an additional CAD 15,000 for living expenses. Keep in mind that these are estimates, and it’s advisable to consult your university’s financial aid office for a more accurate total cost of attendance. Despite the costs, Canada is generally considered one of the more affordable study destinations.
What is the Maximum Amount of Student Loans Available for International Students?
Lenders set the borrowing limit, but it’s recommended to borrow an amount covering both your education costs and living expenses at your study location. If you have other financial aid sources like scholarships or grants, it’s wise to borrow less in loans. While primarily for tuition fees, the borrowed amount should also cover additional costs such as accommodation, books, and school supplies.
Do Canadian Universities Offer Financial Aid to International Students?
Yes, Canadian universities offer financial aid to international students through various means such as:
1. Scholarships
Scholarships are financial aid awarded to students based on criteria such as academic excellence, volunteer experience, athletics, or community involvement. They may also focus on specific research areas, particularly for graduate students. While some scholarships require an application, others, especially entrance scholarships, may be automatically offered to eligible students. Scholarships do not require repayment and can be renewable for multiple years.
2. Entrance Scholarships
Entrance scholarships are merit-based awards specifically for first-time university or college students entering an undergraduate degree program. International students are eligible based on academic and language proficiency requirements. Many universities and colleges automatically offer entrance scholarships, typically requiring a minimum GPA and full-time enrollment. These awards do not need to be repaid.
3. Bursaries
Bursaries are monetary awards granted based on financial need. Federal and provincial governments, as well as organizations, offer bursary funds. Colleges and universities also provide internal bursaries for international students. To apply, students submit an application form and undergo a financial needs assessment. Like scholarships, bursaries do not require repayment.
4. Grants
Grants offer monetary assistance for post-secondary education and do not require repayment. Students usually apply for grants and loans together through their selected province’s application process.
5. Fellowships
Fellowships support international students in studying and conducting research in Canada. These can be found in various disciplines and are offered by schools, organizations, and the Canadian federal and provincial governments. Fellows receive a stipend, and examples include the Banting Postdoctoral Fellowships, Vanier Canada Graduate Scholarships, and others. Fellowships do not require repayment.
Conclusion
If you’re unable to secure scholarships or need additional financial aid alongside grants, student loans can be an option to fund your studies in Canada. However, it’s important to familiarize yourself with the workings of student loans before applying. We hope this article has shown you all you need to know about student loans for international students in Canada.
