Repaying your education loan requires strict budget planning and understanding how to take the first critical step to pay off student loans. It can involve early repayment during the non-repayment period (moratorium period) and after completing your course. Students can also apply for scholarships and bursaries to use that amount to repay their student loans in Canada. To help you ease the financial burden, we have compiled all the necessary information for you to start taking charge of your financial journey.
Let’s understand how to start repaying a student loan in Canada and what payment options are available to effectively manage your student loan in Canada.
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Also Read: Confused between Indian Banks and Foreign Banks to apply for education loans? Check out our blog on Why Choose Indian Banks over Foreign Banks for Education Loans to Study Abroad.
How to Repay an Education Loan in Canada?
Students are granted an education loan because of the guarantee certificate promised by them to the lending institution. To start repaying their student loan in Canada, students have two options-
- Repaying during 6-month non-repayment period
- Repaying after completing the course
Students get a 6 month non-repayment period after finishing their school. During this period, they are not required to make payments, but the interest begins to accrue on the loan which must be paid later. Although it is not mandatory to pay during the non-repayment period, it is advisable to start making payments in the non-repayment period. This will enable you to repay your student loan in Canada faster. Students can pay the accumulated interest in a lump sum before making regular payments.
The second option is to start repaying your student loan on completion of the 6-month non-repayment period, also referred to as the moratorium period. It is compulsory to start making payments on your loan once this period ends. Your financial institution will send you a notice to repay your loan and the interest. You can pay it off through NSLSC- National Student Loans Service Centre.
Also Read: Check all details regarding the 10 Indian Banks providing education loans to study in Canada.
Payment Method Options- Repaying Student Loan in Canada
A student can repay a student loan in Canada through NSLSC. The National Student Loans Service Centre is an online portal to pay off student loans. You can visit the website and log in using your username and password. Your NSLSC account number is found on your loan documents or online account. If you don’t have an online account, you can create one by providing your Social Insurance Number (SIN), date of birth, and other personal details.
Follow these steps to repay your student loan in Canada through NSLSC-
- Login to your NSLSC account.
- Click on the ‘My Account’ dropdown menu and select ‘Make a payment’.
- Select the payment method from multiple options like Online Banking, Credit Card, or pre-authorised debit.
To repay your student loan in Canada, pre-authorized debit is one of the easiest ways to ensure consistent payments. Students are automatically set to the pre-authorised debit option if the loan amount is deposited directly into their bank account.
- Enter the payment details, review and confirm payment.
- Wait for a notification from NSLSC on the website or via email stating payment confirmation.
Also Read: Education student loans to study in the US are a fantastic option to bridge the gap and overcome the financial barrier. Learn all about Education Loans in the US for International Students.
Smart Tips for Early Repayment of Student Loans in Canada
Repaying student loans requires a proactive approach and informed decisions. Reducing your expenses, making biweekly payments, applying for grants and scholarships and using tax refunds to pay off your student loan are some of the smartest ways to repay student loans in Canada.
Let’s look at some more tips to pay off your student loan in Canada faster.
- Consolidate your loans if you have multiple student loans in Canada. This will help you simplify your payment options instead of juggling between paying off multiple loans at different dates.
- Start paying immediately. Use your non-repayment period to pay off the interest. Also, make as many payments as you can during this time. It all adds up to the principal amount.
- Plan your budget accordingly and cut down on all unnecessary spending. This will help you save extra dollars that you can add up to make additional payments to repay your student loan in Canada.
- Switch to biweekly payment. It means instead of paying once in month, pay once every two weeks. This implies making extra payments to repay your student loan faster.
- Apply and avail of student grants, scholarships and bursaries. Full-time students are also eligible for a 15% loan remission if they complete the course program within the stipulated time and receive a bursary each year.
- Use tax refunds to repay your student loan in Canada faster. Eligible students are entitled to various tax deductions and credits that can used for early repayment of your student loan.
FAQs on How To Repay Your Student Loan in Canada
To pay off your student loan in Canada faster, you start repaying during the 6-month non-repayment period. Although it is not mandatory to pay during this time, doing so can help you pay off loans faster.
Reducing your expenses, making biweekly payments, and using tax refunds to pay off your student loan are some of the smartest ways to repay student loans in Canada.
Yes, a full-time student is eligible for a 15% loan remission if they completed the course program within the stipulated time and received a bursary each year.
If a student has interrupted their studies temporarily for medical or parental reasons but plans to continue further, can postpone the repayment of the loan.
On missing 9-month payments of your student loan, the federal part of the loan is sent to the CRA- Canada Revenue Agency for collection. You are devoid of any kind of student aid. To be able to get the student aid, you must bring the loan your loan up to date.
This was all about how to repay your student loan in Canada. There are two ways- repaying during the non-repayment period or after completing school. Students can repay it online by logging into the NSLSC portal through online banking, credit card, or pre-authorised debit options. Considering the above-discussed tips can help you repay your student loan in Canada faster.
To know more about the loan application process, the best bank accounts for students, forex and banking experience for global students or international money transfers, reach out to our experts at 1800572126 to help ease your study abroad experience.
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