Published date: 19 Sep 2019 Updated on: 06 Apr 2020 In 2018, the number of Indian students in Canada grew by 40%. The count was more than 172,600. This year, the total count is expected to be even more. One of the steadiest increases has been seen in the science and technology courses with more Indian students opting for such courses every year. With the demand for STEM Master’s in Canada rising, the need for educational loans for MS in the country also increases. The article delivers an in-depth insight into the educational loan options available to students for financing their higher studies in Canada to help them choose a befitting one. Get Education Loan For MS In Canada From Gyandhan. Arrange a call back from an expert by filling up this form How Much Does MS in Canada Cost? Before we get into educational loan options, let us take a look at the costs involved in studying MS in Canada. Majority of the expenses involved in studying abroad constitute tuition fees and living costs. For STEM master’s course in Canada, the tuition fee ranges from CAD 4,000 to 35,000 annually (depending upon the college and course). The tuition fees can be considerably higher for the following top five colleges of Canada: For example, the University of Toronto charges CAD $53,290 - $55,950 per year. Besides tuition, there are living expenses too which the student bears. The Canadian visa requirements state that an international student requires CAD 10,000 over and above the tuition. What Are the Different Educational Loan Options for STEM Masters Considering the high costs of education and living in Canada, as mentioned above, an education loan thus is a robust financing option for an Indian student who cannot afford to study abroad. These loans are somewhat different from conventional loans because the interest is paid only on the money the student uses. For a more detailed understanding of education loans, read this short post. Education Loans Come Under Two Broad Categories A collateral loan is taken against an immovable property or financial assets. When the amount of credit given by the bank is high, it takes up the risk of a massive loss. The collateral ensures that the bank is able to mitigate that loss and remain on the safe side in the case of loan default. The loan amount sanctioned depends upon the collateral. On the other hand, unsecured loans are approved without any property or assets as collateral. Such loans are mainly issued on the basis of the borrower’s creditworthiness and co-applicant income. What is the Education Loan Without Collateral Options For Canada? Nationalized banks offer loans without collateral for up to ₹ 7.5 lakhs, which is too little an amount for overseas education. In such cases, students who cannot afford to provide collateral can choose to go for unsecured education loans for studying in Canada. Unsecured loans that cover the cost of studying in Canada are provided either by private banks or Non-Banking Financial Company (NBFCs). The NBFCs that offer unsecured loans are Incred, Avanse, Auxilo, and Credila. GyanDhan facilitates sanction of education loans without collateral at low-interest rates from Incred, Avanse & Auxilo. GyanDhan also simplifies the process of getting educational loans sanctioned from private banks such as Axis Bank & international lenders such as Mpower Finance. Educational Loan for MS in Canada Options - Without Collateral Features Public Banks Private Banks NBFCs International Lender Example Lenders State Bank of India, Bank of Baroda Axis Avanse, Incred, Auxilo Mpower Finance, Prodigy Finance Loan Amount Public banks do not offer unsecured educational loans more than 7.5 Lakhs Up to INR 40 Lakhs Up to INR 30 Lakhs Up to 50,000 USD Interest Rate Range 11.5%-13% 12.5%-14% 8%-12% (USD)equivalent to 14%-18% (INR) Processing Fees (INR) < 20 Lakhs : 0 > 20 Lakhs : 750 per Lakh 1-2% of the loan amount 2% to 5% of the loan amount Number of Colleges Supported More than 10 More than 50 More than 30 Depending on the type of lender, the repayment period, processing time, expenses covered and other aspects of an education loan without collateral vary. Repayment Period - For education loans without collateral from private banks, the repayment period is 20 years. On the other hand, the repayment period for education loans from NBFCs is 10 years. However, if you wish to extend your repayment period, we let your requests be known to the bank and get you a customized loan offer as per your needs. Processing Time - Private banks process educational loans without collateral in 5-7 days, while NBFCs take 4-5 working days to process the loans. GyanDhan ensures that the processing is done on time. In the case of any delay by the lending institution in processing the loans, GyanDhan’s escalation team gets in touch with its upper management and gets the loan sanctioned on an immediate basis. Expenses Covered - Educational loans from private banks cover 85% of the expenses, while loans from NBFCs cover 100% of the expenses. Co-Applicant Income Requirement - The minimum co-applicant income requirement for MS in Canada education loans without collateral is generally 35k per month, whereas that for NBFCs is generally 25k per month. The exact income requirement, however, depends on the loan amount. Quoting from our experience, in the case of NBFCs, approximately 50% of the co-applicant income should be sufficient to at least bear the interest per month, whereas, in the case of banks, this number is approximately 65%. Multiple co-applicants may be combined. Common Decline Reasons - Private banks normally decline applications for educational loans without collateral for the following reasons - if the co-applicant’s income is not sufficient to bear the interest during the study period and if the course applied for is a non-STEM one. NBFCs cite the following reasons for rejecting loans - low co-applicant income and poor CIBIL scores. If your CIBIL score is low, you should let GyanDhan’s counselor know in advance. We will inspect the situation and then try to find solutions which would increase the chances of approval. Number of Documents Required - Most banks and NBFCs require a number of documents when a student applies for an education loan. Some of the common documents are student’s and co-applicants KYC (know your customer), relevant mark sheets, admission letter from the university, fee structure, income certificate of co-applicant, etc. Many times, students are confused as to the list of documents required to apply for a loan, and thus they encounter many obstacles in the loan sanctioning process. GyanDhan helps the students with a customized document checklist at the start of the process which ensures that all the documents are submitted in one round thus expediting the overall process. What is the Education Loan With Collateral Options for Canada? The biggest plus of education loans with collateral is lower interest rates. Since the borrower offers security to the bank (if they fail to repay the loan), the risk that the bank takes is moderate. Hence, the difference in interest rates when compared to unsecured loans. How much collateral a loan requires and the value of loan approved is very subjective. It changes from bank to bank. Moreover, the academic record of the student and their future employment prospects factor in too. Educational Loan for MS in Canada Options - With Collateral Features Public Banks Private Banks NBFCs Example Lenders State Bank of India Axis Bank Avanse, Incred, Auxilo Loan Amount (INR) Up to 1.5 Cr Up to INR 60 Lakhs Up to INR 60 Lakhs Interest Rate Range 9.5% to 10% 11%-12.5% 12%-13% Processing Fees (INR) 11800 < 20 Lakhs : 0 > 20 Lakhs : 750 per Lakh 1-2% of the loan amount Payment During Study Period No payment Simple Interest Simple/partial interest Repayment Period - The repayment period for education loans with collateral in the case of public banks is 15 years. In the cases of private banks and NBFCs, the repayment tenures are 20 years and 10 years respectively. Processing Period - Public banks usually take 12-15 working days to process these loans. Private banks take 10-12 days for processing, while NBFCs take 8-10 working days. GyanDhan’s relationship officer pick up the documents from home for free, while we collect the documents we ensure all the documents are according to the requirements which expedite the process, in general students take more than 15 days just to finish the documentation Expenses Covered - Loans from public banks cover 90-100% of the total expenses, depending on the bank you are taking the loan from. While private banks cover 85% of the total expenses. NBFCs cover 100% of the total expenses. Common Decline Reasons - Both public and private banks decline with collateral education loan applications for two key reasons - incomplete collateral documents and poor CIBIL. NBFCs generally decline applications for low co-applicant income and poor CIBIL score. However, we have seen that students who apply for a loan with our help have 50% more chances of getting the loan approved as compared to those directly approaching the bank. This is primarily due to our experienced counselor who conducts a comprehensive evaluation of your profile and then selects and coordinates with that lender first that is most likely to sanction the loan. Documents Required - Some of the common documents required for a secured loan are the student’s and co-applicants KYC documents (know your customer), relevant mark sheets, admission letter from the university, documents related to security being pledged, fee structure, etc. The property documents required vary even as per different areas within a city. Again, GyanDhan comes to the applicant’s rescue by providing a customized document checklist at the start of the process which ensures that all the documents are submitted in one round thus expediting the overall process. What is the Application Procedure for Loans for MS in Canada? A student admitted to a STEM Master’s degree in Canada will need to apply for an education loan prior to applying for the visa. This is necessary because Canada demands the purchase of a Guaranteed Investment Certificate (GIC) worth CAD 10,000 under the SDS rule. The Process for Education Loan Application Involves the Following Steps: Check your eligibility for an education loan here or request a call back here. You will get a call from GyanDhan’s education loan counselor to discuss the possible education loan options. Post discussion, our GyanDhan counselor will suggest the next steps as per the type of lender from which the loan is to be availed. Submit all the supporting documents. (This is a critical step, and it is recommended that you take a loan counselor’s help at hand to make sure that every required record is submitted. If you reside in a metropolitan city and have applied to a nationalized bank for the education loan, GyanDhan’s relationship officer will pick up the documents from your home for free, however, for other cities, we will set an appointment with the branch manager of the bank and coordinate. In the case of private banks, our banking partner will pick up the documents from your home, or you can courier it to the sales manager appointed by us. If you take an education loan from NBFC, you just have to upload the documents on our website. There is no need to submit any hard copy. The bank reviews the application. During this process, the student and his/her parents may be asked to furnish additional information. If the bank finds nothing suspicious, it will approve the loan requests. Once the loan is approved, the student has to accept the offer by signing the sanction letter offered from the bank and in case of NBFC by paying the processing fees Once the student receives the sanction letter, the student & the co-applicant need to sign the agreement & disburse in 2 to 6 months depending on the validity of the sanction letter which varies from lender to lender. Once the agreement is signed, the student can apply for the disbursement of the loan. Given the length & complexity of the process, it is highly advised that students start with the application process as soon as they get the admission letter. How to Choose the Best Education Loan for MS in Canada? Funding your higher education is an excellent option, but it requires a lot of research. Add to the bargain the colossal number of options available, it can indeed get confusing. To carefully weed through the many choices, one needs to meticulously analyze critical aspects such as: Interest Rate Processing fee & Time Margin Money Moratorium Period Tax Benefits Loan Duration Expenses Covered Prepayment terms and conditions GyanDhan has helped many students in getting an education loan for MS in Canada. If you too aspire to study MS in Canada and are looking for options to finance your education, we are just a call away. We do a quick analysis of your financial requirements over the phone and let you know the education loan possibility even before you get an admit letter. Since there are many options available in the market, it is very important to be able to choose the right lender to avoid any future financial distress. Our loan counselors help you to navigate through the options and select a loan which perfectly fits your financial profile. Moreover, you can also use our education loan focused customizable EMI calculator to calculate the EMIs and interest you will have to pay for an education loan and compare different options. Or you can simply check your loan eligibility here using our Loan Eligibility tool which gives you the best options based on your requirements.
This is a companion discussion topic for the original entry at https://www.gyandhan.com/blogs/educational-loan-options-for-ms-in-canada