Education Financing Options For Masters in Canada

Canada warmly welcomed 67,000 new international students amid January and April 2020 from 156 different countries. Canada’s overseas student populace has skyrocketed in recent times. In 2019, Canada had over 640,000 foreign students which indicates that the international student population has tripled over the decade. International students are fascinated by Canada’s high quality of education, variety, security, affordable budget, job opportunities, and immigration ways.

This article dives deep into the education loan options accessible to aspirants for funding their further studies in Canada to assist them to choose a befitting one.

Student loans concept

Educational Loan Options for STEM Masters


Taking into account the cost of education and staying, an
education loan for Canada is a cushion financing choice for Indian students. These loans differ from conventional loans as the interest is levied only on the money used by the student. 

Educational Loans comprise of two broad categories namely:

  • Without collateral which is also termed as an Unsecured Loan and
  • With collateral which is also known as a Secured Loan

A loan, taken against immovable property or financial possessions, is termed as an education loan with collateral or a secured education loan. In case the amount of loan offered by the bank is high, it makes up for the risk of a loss. A collateral loan makes sure that the bank is freely allowed to mitigate that loss and remain safe in the case of loan defaults. The approval of the loan amount depends on the collateral. Alternatively, unsecured loans are approved without any property or assets as collateral.

Educational‌ ‌Loan‌ ‌Options with‌ ‌Collateral‌ ‌for Canada


The most popular Indian banks demand collateral as security in order to reduce the risk associated with paying off the credit. Shares, bonds, fixed deposits, mutual fund units, gold, debentures, bank deposits, life insurance policy, and government securities, are considered as collateral. Assets such as immovable property such as a house, any commercial possession, or just land are acknowledged as collateral.

Educational‌ ‌Loan‌ ‌Options without‌ ‌Collateral‌ ‌


Educational Loans without collateral are offered by Nationalized banks for up to ₹ 7.5 lakhs, which might not sound promising to many. Students who cannot afford to offer collateral can opt for unsecured education loans for studying in Canada. These loans that cover the cost of education in Canada are offered by private banks and Non-Banking Financial Companies (NBFCs). Unsecured loans are approved on the basis of the applicant’s dependability and co-applicants income.

Graduation cap mortarboard with tassel propped on a jar of money cash, concept school loans debt

Key points to remember

  • Payment Period – Educational loans without collateral procured from private banks, the payment period is 20 years. Alternatively, the period of repayment for education loans from NBFCs is 10 years or more, since you can avail of a customized loan tailored to your needs. 

  • Approval Time – Private banks approve of educational loans without collateral in 5-7 days, whereas NBFCs take around 4-5 working days for the same. In the scenario where the lending institute delays in processing the loan, an escalation team gets in touch with a specialized team and gets the loan approved on a priority basis. 

  • Costs Covered – Private banks cover 85% of the costs covered whereas NBFCs cover 100% of the expenses.

  • Co-Applicant Income Requirement – The minimum co-applicant income demand for MS in Canada education loans without collateral is about 35k monthly, while for NBFCs it is around 25k per month. As per NBFCs, on average 50% of the co-applicant salary should be enough to bear the interest per month. As far as banks, this number is roughly 65%. The good news is multiple co-applicants can be combined.

  • Reasons for Loan Decline – Private banks at times decline applications for educational loans without collateral – if the co-applicant’s income does not match the interest to be paid during the duration of the study. If the course enrolled for is a non-STEM one. NBFCs state these reasons for loan decline – low co-applicant salary proof and CIBIL scores. 

  • Documents Demanded – Banks and NBFCs demand a standard set of documents when an aspirant applies for an education loan. List of common documents includes student’s and co-applicants KYC, applicable mark sheets, letter of admission from the institution, fee structure details, certificate of income of co-applicant, etc. In case the documents are not aligned and submitted in order as demanded, they face hurdles. A loan expert prepares a customized document list at the beginning of the process which ensures everything is submitted thus speeding up the process. 

For better education loan consultation, you can get in touch with education loan counselors. They understand your financial profile thoroughly and evaluate which lender fits you the best!

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