Studying abroad, especially in Canada, is a significant financial commitment that many aspiring students find challenging to afford. Beyond tuition fees, the costs include living expenses, travel, and more. Fortunately, student loans for Canada provide a vital financial lifeline for Indian students dreaming of studying in Canada. But what exactly is a student loan for Canada? What is the eligibility criteria? Who are the top lenders? And how can you apply?
This guide explores everything you need to know about securing a student loan for Canada, including the application process, eligibility, documents required, expenses covered, top lenders and repayment terms.
Table of contents
- What Is a Student Loan for Canada?
- Types of Student Loans for Canada
- Why Do You Need a Student Loan for Canada?
- Benefits of a Student Loan for Canada
- Top Student Loan Lenders for Canada
- How to Repay Student Loan for Canada
- How to Choose the Right Student Loan for Canada
- Finance Your Canadian Education with Fly Finance
- FAQS on Student Loan for Canada
What Is a Student Loan for Canada?
A student loan for Canada is a financial aid option provided by governments banks, or private lenders to help students cover educational expenses such as tuition, accommodation, books, and travel in Canada. Unlike other forms of borrowing, these loans often come with flexible terms, including deferred repayment until after graduation.
Repayment of student loan for Canada typically begins after graduation, often with interest, following a grace period known as the moratorium period. Government-backed loans generally offer lower interest rates compared to private lenders, making them an attractive choice for students.
Key features of these loans include:
- Coverage for tuition fees, accommodation, books, and travel expenses.
- Interest rates that vary based on the lender—government loans often offer lower rates than private options.
- A moratorium period, usually 6–12 months post-graduation, before repayment starts.
- Flexible repayment tenures, ranging from 5 to 15 years, depending on the loan agreement.
With cost of study in Canada averaging CAD 20,000–50,000 annually for international students, such loans play a pivotal role in making quality education accessible.
Also Read: Top Private Student Loans for Study Abroad [2025]
Types of Student Loans for Canada
When exploring a student loan for Canada, you’ll encounter two types of education loan: secured and unsecured loans. Both public and private banks, along with Non-Banking Financial Companies (NBFCs), offer these financing solutions, each with distinct characteristics to suit different needs.
Here’s a breakdown of the two types:
- Secured Loans for Canada
- Require collateral, such as property, fixed deposits, or other valuable assets.
- Offer lower interest rates, typically ranging from 8.50% to 11.25% p.a.
- Available through public banks (e.g., SBI), private banks, and NBFCs, with higher loan amounts up to INR 1.5 crore.
- Unsecured Loans for Canada
- Education loan to study in Canada without collateral making them accessible for those without assets.
- Come with higher interest rates, often between 10.50% and 13.80% p.a.
- Banks usually limit these to INR 7.5 lakh, though NBFCs may approve larger amounts (up to INR 80 lakh), depending on the institution’s reputation, co-applicant’s financial stability, and your career prospects.
Choosing between these depends on your financial situation and the amount you need to borrow.
Why Do You Need a Student Loan for Canada?
Canada continues to attract students globally due to its high-quality education and diverse opportunities, hosting over 807,000 international study permit holders in 2023, according to Immigration, Refugees and Citizenship Canada (IRCC). However, the rising costs of education and living in Canada often make financial planning a challenge.
Here’s why securing a student loan for Canada is a practical choice:
- Tuition Fees: Range from CAD 20,000 to CAD 60,000 annually for international students, depending on the program and institution. For example, undergraduate programs average CAD 40,115 per year, with fields like medicine or engineering often exceeding this amount.
- Living Costs: The cost of living in Canada is estimated around CAD 15,000–25,000 per year, covering accommodation, food, and transportation. IRCC now requires proof of CAD 20,635 (plus tuition) for a single applicant outside Quebec.
- Additional Expenses: Include English proficiency tests like IELTS (INR 17,000 as of 2025), visa fees (CAD 150 for the study permit plus CAD 85 for biometrics, totaling CAD 235), flight tickets (INR 70,000–1,20,000 depending on season and route), and mandatory health tests or insurance (CAD 600–900 annually).
A student loan covers these critical costs, ensuring you can focus on your studies and settle into life in Canada without the burden of financial stress.
Benefits of a Student Loan for Canada
Choosing a student loan for Canada comes with distinct advantages that make it a compelling option for funding your education. These benefits cater to diverse needs, offering flexibility and long-term value. Key benefits include:
- Loan Amount: Up to INR 1.5 crore for secured loans, and up to INR 40–80 lakh for unsecured loans, depending on the lender.
- Repayment Tenure: Ranges from 5 to 15 years, offering flexibility.
- Moratorium Period: Typically, the course duration plus 6–12 months after graduation or employment.
- Tax Benefits: Unlimited deduction on interest paid under Section 80E of the Income Tax Act for up to 8 years.
- Concessions: Some banks offer lower interest rates for female students.
These advantages make student loans a practical solution for funding your Canadian education.
Top Student Loan Lenders for Canada
Choosing the right education loan lender for Canada is a key step in financing your education in Canada. Interest rates for student loan for Canada vary widely among providers, so it’s essential to compare your options carefully. Public banks often offer more affordable rates than private lenders.
Here’s a snapshot of current interest rates from leading providers.
| Top Lender | Loan Amount (INR) | Interest Rate (p.a.) |
|---|---|---|
| State Bank of India (SBI) | Up to 1.5 crore | Starts at 11.15% |
| HDFC Credila | No upper limit (min. 1 lakh) | 10.25%–13.5% |
| Bank of Baroda (BOB) | Up to 80 lakh | Starts at 9.15% |
| Axis Bank | Up to 75 lakh (min. 50,000) | 9.5%–11.5% |
| Punjab National Bank (PNB) | Need-based (up to 40 lakh) | Starts at 9.2% |
| ICICI Bank | Up to 2 crore | 10.5%–12.5% |
| Avanse Financial Services | Up to 75 lakh | 11%–14% |
| Canara Bank | Up to 40 lakh (higher with collateral) | Starts at 9.25% |
| IDBI Bank | Up to 30 lakh (unsecured) | 9.5%–11% |
| Union Bank of India | Up to 40 lakh (unsecured); 1.5 crore (secured) | Starts at 9.3% |
| Bank of India | Up to 40 lakh (unsecured) | Starts at 9.35% |
| InCred Finance | Up to 60 lakh | 11.5%–13.5% |
Note: Rates are indicative and subject to change based on loan amount, tenure, and applicant profile. Secured loans (with collateral) typically have lower rates, while unsecured loans carry higher rates due to increased lender risk. Comparing these options helps you select a loan that aligns with your budget.
Also Read: 5 Government Education Loans to Study in Canada
Expenses Covered by a Student Loan for Canada
A student loan for Canada isn’t limited to tuition—it extends to a range of expenses tied to your academic journey. Understanding what’s covered ensures you maximize the loan’s potential.
Typically, these loans fund:
- Tuition fees for your chosen program.
- Accommodation costs, including hostel or off-campus housing.
- Study materials like books, laptops, and lab equipment.
- Travel expenses, such as flights to Canada and local commuting.
- Miscellaneous costs, including visa fees, health insurance, project work or study tour expenses.
Before committing, verify with your lender, as coverage varies. This clarity helps you plan your finances comprehensively.
Eligibility Criteria for a Student Loan for Canada
Securing a student loan for Canada requires meeting specific eligibility standards set by lenders. These criteria ensure that the loan is granted to individuals with a clear academic and repayment plan.
You’ll need to fulfill these student loan requirements to study In Canada:
- Hold citizenship of the country where you’re applying (e.g., India).
- Gain admission to a recognized Canadian university or college.
- Be at least 18 years old—or have a parent apply if younger.
- Pursue a professional or job-oriented course (e.g., STEM Courses, management).
A strong academic background and a co-applicant with stable income can boost your approval odds.
Documents Required for a Student Loan for Canada
Applying for a student loan for Canada involves submitting a set of documents to validate your identity, finances, and academic intent. Having these ready streamlines the process.
Prepare the following:
- Identity Proof: Aadhaar, PAN, passport, or voter ID.
- Admission Proof: Offer letter from a Canadian institution.
- Academic Records: Mark sheets (10th, 12th, and latest qualification).
- Financial Documents: Co-applicant’s bank statements (last 6 months), income tax returns (last 2 years).
- Collateral Documents: Property deeds or FD certificates (if applicable).
- Application Forms: Loan application, guarantee, and subsidy forms.
Organizing these documents in advance, ensure all are up-to-date to prevents delays and keeps your application on track.
How to Apply for a Student Loan for Canada
Applying for a student loan for Canada demands a proactive approach to ensure timely funding. The process, while straightforward, benefits from early preparation and research. Follow these steps:
- Research Lenders: Compare interest rates, processing fees, and repayment terms from banks like SBI, ICICI, and HDFC Credila.
- Estimate Costs: After receiving your university acceptance, calculate tuition, living expenses, and personal contributions.
- Gather Documents: Assemble all required paperwork for submission.
- Start Early: Begin the process 6–7 months before your course starts to avoid last-minute issues.
- Submit Application: Apply online or at a branch, depending on the lender.
- Await Approval: Funds are disbursed post-approval, often directly to the university.
Tip: Use Fly.finance Education Loan EMI Calculator to estimate monthly repayments and choose a loan that fits your budget.
Collateral Rules for Student Loans in Canada
For loans exceeding INR 7.5 lakh, most Indian banks require collateral, such as:
- Property (house, flat, or non-agricultural land)
- Fixed deposits
- Insurance policies
Parents or guardians are typically required as co-applicants to ensure repayment. However, some private lenders like HDFC Credila and ICICI Bank offer unsecured loans (no collateral) up to INR 40–80 lakh, based on academic profile and course employability.
How to Repay Student Loan for Canada
Repaying a student loan for Canada is a critical phase that requires planning to avoid financial strain. Most lenders offer flexible terms to ease this transition. Key aspects to consider for the repayment include:
- Moratorium Period: Payments start 6–12 months after graduation or employment.
- Tenure: Repayment spans 5–15 years, depending on the lender.
- Options: Pay via EMIs, with some lenders allowing penalty-free prepayments.
- Assistance: Programs like loan forgiveness may apply for specific professions.
Staying on top of repayments preserves your credit health and maximizes the loan’s value.
How to Choose the Right Student Loan for Canada
Selecting the right student loan for Canada is a crucial step toward funding your education without creating long-term financial stress. Here’s how you can make a smart choice:
- Evaluate Your Financial Needs
Understand how much money you require and how much you or your family can contribute. This will help you avoid borrowing more than necessary. - Consider Your Goals and Risk Tolerance
Think about your career plans, income potential, and how comfortable you are with taking on debt. - Compare Loan Types
- Private Loans: Often provide a wide range of options but may come with higher interest rates.
- Government Loans: Generally offer lower interest rates and borrower-friendly features but may include usage restrictions.
- Review Key Loan Features
Pay attention to important factors such as:- Loan tenure
- Interest rates (fixed or variable)
- Repayment plans (e.g., grace periods, flexible EMIs)
- Deferment or forbearance options
- Check for Additional Support
Some lenders provide extra services like financial literacy tools, account management apps, or career counseling. - Seek Professional Advice
If you’re unsure, talking to a financial advisor can help you understand your options and make the best decision for your situation.
Also Read: British Columbia Student Loan in Canada
Finance Your Canadian Education with Fly Finance
For a hassle-free experience, consider fly Finance by Leverage edu, a trusted loan provider. Benefits include:
- Dedicated loan experts
- Competitive interest rates
- No service fees
- Collateral-free options up to INR 40 lakh
- Comparative analysis of multiple lenders
Contact Leverage Finance to explore affordable loan options tailored to your needs.
FAQS on Student Loan for Canada
A student loan for Canada is financial aid from governments, banks, or lenders to cover tuition, accommodation, books, and travel. It offers flexible terms, like deferred repayment, to help students afford education.
Most of the cases student loan for Canada cover tuition, accommodation (hostel or off-campus), study materials (books, laptops), travel (flights, commuting), and extras like visa fees and health insurance, depending on the lender’s terms.
The moratorium period for a student loan Canada is a 6–12 month grace period after graduation or employment before repayment starts, giving you time to settle into work or life post-studies.
For getting a student loan for Canada, you must be a citizen (e.g., Indian), admitted to a recognized Canadian school, at least 18, pursuing a job-oriented course, with a co-applicant for better approval odds.
The documents are required to apply for a student loan Canada are identity proof (i.e., Aadhaar, PAN, passport), admission letter, academic records (10th, 12th), co-applicant’s financials (bank statements, tax returns), and collateral papers if needed.
The average interest rates for student loans for Canada are:
Secured loans range from 8.50% to 11.25% p.a., while unsecured loans range from 10.50% to 13.80% p.a. These rates may vary depending on the lender, loan amount, and your financial profile.
For a student loan to study in Canada, secured loans can offer up to INR 1.5 crore, while unsecured loans typically range from INR 7.5 lakh to INR 80 lakh, depending on the lender and your eligibility.
Repayment of student loan for Canada starts 6–12 months after graduation (moratorium period) and can extend 5–15 years, with flexible EMI options based on the lender’s terms.
With tuition at CAD 20,000–60,000/year and living costs at CAD 15,000–25,000/year, a loan makes Canada’s top-tier education affordable, easing financial stress.
Research education loan lenders for Canada, estimate costs (tuition, living), gather documents (ID, admission letter, financials), and apply 6–7 months early online or at a branch. Await approval; funds are disbursed post-verification, often directly to the university.
Eligible applicants for student loans in Canada should be the citizen of applying country (e.g., India), admitted to a recognized Canadian institution, at least 18, pursuing job-oriented courses (e.g., STEM), with a strong academic record and a co-applicant with stable income.
Yes, Indian students can secure loans for Canada from Indian banks (SBI, ICICI) or NBFCs for Canadian studies. Requirements include admission to a recognized university, citizenship, and often collateral or a co-applicant, depending on the loan type.
Repaying the student loans in Canada of $30,000 (≈INR 25 lakh) takes 5–15 years, depending on the lender’s tenure, interest rate (9%–13% p.a.), and EMI plan. With a 10-year term at 11% interest, it’s roughly $400/month (≈INR 33,000).
To learn more about bank accounts for students, the best education loans, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
