Study Loan Canada: Complete Guide Students

Canada is one of the most popular countries for higher education. Many Indian students dream of studying in Canada, but the biggest challenge is money. College fees, living expenses, GIC, flight tickets – everything costs a lot.

In this blog, we will explain “Study Loan Canada” in very simple language. You will learn:

What is a study loan for Canada
Difference between Canada government student loans and Indian education loans for Canada
Eligibility, documents, and process
Cost and EMI examples in rupees
Smart tips to reduce your loan burden

This blog is written in easy English, so even class 10–12 students and parents can understand.

What Does “Study Loan Canada” Mean?

When people search “study loan Canada”, they usually mean one of two things:

Canada Student Grants and Loans
- Given by the Government of Canada to students studying at Canadian colleges/universities.
Education loan from Indian banks/NBFCs to study in Canada
- Loan taken in India, in rupees, to pay tuition fees and living expenses in Canada.

Both are real, but they are very different. You should know the difference clearly.

Point	Canada Govt Student Loan	Indian Study Loan for Canada
Who gives it?	Government of Canada + provinces	Indian banks / NBFCs
For whom?	Students studying in Canada	Indian students going to Canada
Currency	Canadian Dollars (CAD)	Indian Rupees (INR)
Apply where?	Provincial/territorial website	Bank/NBFC website or branch in India

Most Indian students first deal with Indian education loans when they plan to go to Canada.

Canada Student Grants and Loans (For Students in Canada)

The Canada Student Financial Assistance Program gives grants (which you don’t repay) and loans (which you must repay) to eligible students.

Important features

You apply through your province or territory.
Based on your family income, tuition fees, living costs, disability status, dependants, etc.
There are different grants for:
- Full-time students
- Part-time students
- Students with dependants
- Students with disabilities

There is also a maximum number of weeks for which you can get this aid. After your studies, you usually get a 6-month grace period and then you start repaying your loan.

This part is more useful if you are already in Canada or become a resident there.

Study Loan for Canada from Indian Banks

Now, let’s focus on what most Indian students really need:
Education loan from Indian lenders to study in Canada.

Many Indian public sector banks, private banks and NBFCs give study loans for Canada. Some websites like DBS digibank explain the whole process and conditions in detail for Indian students.

What costs does the loan cover?

A typical study loan for Canada can cover:

Tuition fees
Living expenses (hostel/rent, food, transport)
Books and study material
GIC amount (for SDS visa)
Travel expenses (one-time)
Insurance and other academic fees

Always check with your bank exactly which expenses are included.

Approximate Cost to Study in Canada (Simple Example)

The total cost depends on your course and lifestyle. Let’s see a simple example.

Example: 2-year Master’s Program in Canada

Assume:

Tuition fee: CAD 25,000 per year
Living expenses: CAD 15,000 per year
So, total per year = 25,000 + 15,000 = CAD 40,000

Convert to INR (assume 1 CAD ≈ ₹62, just as an example):

Yearly cost ≈ 40,000 × 62 = ₹24,80,000 (~₹25 lakh)

For a 2-year course:

Total tuition + living ≈ ₹25 lakh × 2 = ₹50 lakh

Now add:

GIC CAD 10,000 ≈ ₹6,20,000
Flight, visa, insurance, etc. ≈ ₹2,00,000 (approx.)

Total estimated cost ≈ ₹50,00,000 + ₹6,20,000 + ₹2,00,000
= ₹58,20,000 (about ₹58 lakh)

You may not need a loan for the full amount if your family can pay part of it from savings.

SDS and GIC Requirement

If you apply under the Student Direct Stream (SDS), you usually have to show that you have money for:

First-year tuition fees, and
CAD 10,000 as Guaranteed Investment Certificate (GIC)

This GIC is kept in a Canadian bank and you get the money back in monthly instalments during your stay.

GIC Cost Example in INR

GIC required: CAD 10,000
Assume 1 CAD = ₹62
So, GIC cost in INR ≈ 10,000 × 62 = ₹6,20,000

Many Indian students use part of their education loan money to purchase this GIC.

Types of Study Loan for Canada (From Indian Lenders)

According to information from bank guides and education loan pages, Indian students generally get two types of loans for Canada:

Secured education loan (with collateral)

You keep property, fixed deposits, or other assets as security.
Interest rate is usually lower.
You can get a higher loan amount, suitable for expensive courses.
Often preferred by public sector banks for large sums.

Unsecured education loan (without collateral)

No collateral is needed.
Interest rate is usually higher.
Banks may give unsecured loans up to a limited amount (e.g., around ₹7.5 lakh in many public banks), while NBFCs may offer higher amounts but with higher interest.
Approval mainly depends on:
- Your university ranking
- Course/job prospects
- Co-applicant’s income and CIBIL score

Eligibility for Study Loan Canada (Indian Student)

Exact rules can differ from bank to bank, but generally you must:

Be an Indian citizen
Be 18 years or above (or your parent is main borrower)
Have a confirmed admission letter from a recognised Canadian university or college
Generally choose a professional or technical course (Engineering, IT, Business, Health, etc.)
Show a good academic record

Banks may reject applications if:

Family income is too low to pay interest during study period
Co-applicant has low CIBIL score
Course has poor job prospects
Collateral documents are incomplete or unclear

Documents Required

Most banks and NBFCs ask for similar documents:

Admission letter from Canadian institution
Completed loan application form
Academic mark sheets (10th, 12th, degree)
Entrance exam scorecards (IELTS/TOEFL/GRE/GMAT, if needed)
Identity proof (Aadhaar, PAN, passport)
Address proof
Income proof of co-applicant (salary slips, ITR, bank statements)
Collateral documents (property papers, FD receipts, etc., if secured loan)

Keep scanned copies ready. This saves time during online or branch application.

How to Apply for Study Loan Canada – Step by Step

Here is a simple step-by-step process that most banks follow:

Step 1: Calculate how much you really need

Make a basic budget:

1 year tuition fees
1 year living expenses
GIC amount (CAD 10,000)
Flight + visa + insurance + emergency money

Small Example

Tuition: ₹20,00,000
Living: ₹7,00,000
GIC: ₹6,20,000
Other costs: ₹1,80,000

Total = 20,00,000 + 7,00,000 + 6,20,000 + 1,80,000 = ₹35,00,000

If your family can pay ₹10 lakh, then you need ₹25 lakh as loan.

Step 2: Compare different lenders

Compare:

Interest rate
Processing fee
Maximum loan amount
Moratorium period (time before EMI starts)
Years for repayment (loan tenure)
Prepayment charges
What all expenses are covered

You can check bank websites, aggregators, or visit branches for details.

Step 3: Fill application form and upload documents

Most banks allow online applications now. You:

Fill the form
Upload academic and income documents
Do KYC
Visit branch if any document verification or property valuation is needed

Step 4: Get sanction letter

If the bank approves your loan:

They issue a sanction letter showing approved amount, interest rate, tenure, and terms.
Read the document carefully before signing.
Keep copies safe; you may need them for your visa and for paying university fees.

Step 5: Loan disbursement

Bank disburses money directly to your university or to your (or your parent’s) account as per requirement.
Part of the amount can be used for GIC and living expenses.

EMI Example for Study Loan Canada

Let us see a rough EMI example to understand your future burden.

Example: ₹25 Lakh Study Loan

Assumptions:

Loan amount: ₹25,00,000
Interest rate: 11% per year (typical for many unsecured abroad loans; actual may differ)
Tenure: 10 years (120 months)

Using a standard EMI formula, the approximate EMI comes to around ₹34,000–₹35,000 per month.

This is only an approximate example, but it helps you see reality:

If your expected salary after course is, say, ₹1,00,000 per month in India or its equivalent in Canada or another country, then ₹34,000 EMI is heavy but still possible.
That is why choosing a good course with high job chances is very important.

Tax Benefit on Education Loan (Section 80E)

One relief for Indian borrowers is Section 80E of the Income Tax Act.

You can claim a tax deduction on the interest portion of your education loan EMI for up to 8 years or until the interest is fully paid, whichever is earlier.
There is no upper limit on the amount of interest for this deduction (within the period).

This reduces your taxable income, which means you may pay less income tax, and your effective cost of the loan becomes slightly lower.

Tips to Use Study Loan Canada Smartly

Here are some practical tips to make your study loan for Canada safer and lighter:

Choose your course wisely
- Prefer courses with strong demand in job market (IT, Data, Engineering, Healthcare, Finance, etc.).
- Check salary levels and employability.
Apply for scholarships
- Even small scholarships of CAD 2,000–5,000 can reduce your loan amount.
- Check both Indian government scholarships and Canadian institution scholarships.
Work part-time during studies (if your visa allows)
- Earnings can help pay for daily expenses or part of interest.
- Always follow your visa work-hour rules.
Maintain good credit habits
- Co-applicant should pay all EMIs and credit card bills on time to keep CIBIL score high.
- Good credit = better loan offer.
Borrow in stages if possible
- Some banks disburse money semester-wise, so you only pay interest on what is actually disbursed.
- This can slightly reduce interest burden.
Prepay whenever you get extra money
- If there are no big prepayment penalties, use bonuses or extra income to reduce principal early.
- This cuts overall interest cost.

Conclusion

A study loan for Canada can change your life if you use it wisely. It allows you to:

Study in a top country like Canada
Gain global exposure
Improve your career and income potential

But remember, it is still a loan, not free money.

So, before you apply:

Calculate your total cost and real need
Compare different banks and NBFCs
Understand all terms like interest rate, moratorium, EMI, and tax benefits

Choose a course and college that give you a strong chance of getting a good job later