Posts Tagged ‘student loans in Canada’

Canadian Private Student Loans in Canada

October 12th, 2010

Student Loans in Canada

Canadian Private Student Loans


Canadian private student loans in Canada were once very easy to secure, but since the federal government no longer guarantees those loans – since they offer direct Candian student loans to students in Canada – these loans are harder to and obtain. You must see things from the banks point of view – if you are young, if you have no job, if you have no property, if you have no credit history, if you have no education you may never pay them back.

Some people would call this a ‘catch-22.’ You can’t get the education to get the job to pay the loan back, unless you get the loan to pay for that education. It’s a never ending circle that can get very frustrating. This doesn’t mean that you cannot obtain a private student loan in Canada – you can. You just have to know how.

First, there are traditional private Canadian student loans in Canada. These are low interest loans in most cases, and you do not start repaying the loan until you graduate from college, or leave school. In some cases, interest is charged while you are in school, and in some cases it is not. Because the loan is not guaranteed by the federal government, the bank may require you to have a co-signer or collateral for the loan.

Another option that more banks are offering is a line of credit for Canadian students. The interest rates on this line of credit are usually the prime rate at the time that the money is used. For example, if you have a $5000 line of credit available to you as a student, and you use $400 of those funds, without using the rest of it, you will be charged the prime rate of interest on the $400, and that interest plus the $400 is what you have to repay.

Some banks will require you to pay the interest on a Canadian private student loan in Canada while you are still in school, with the principle paid off in payments after you graduate, while others will have different payment schedules. The key is that you do not pay back the other $4600 that you did not use, and you do not pay interest on that $4600 either – you never spent it, and the bank still has those funds.

With a line of credit, you must also prove that you are credit worthy and that you can repay the loan. This means that you will most likely need a co-signer, and in many cases, the parents of the student open the line of credit through the bank for their son/daughter, since they are better credit established.

Before you seek out private student loans in Canada, it is essential that you get as much aid through the federal government and the government of your providence or territory first. These Canadian student loans cost less money in the long run, and of course there are many sources of financing that never have to be repaid, such as Canadian grants, bursaries, and scholarships.

If you want a bright future, you need a great education. Such an education can be very expensive, and you should tap into the funds that are available to help pay for your education. This includes Canada grants, federal student loans, bursaries, and possibly even Canadian private student loans.

For more information about Canadian private student loans in Canada, visit your bank, and other banks in your area. Remember that you may not necessarily get the best deal at the bank that you currently do business with for your student loans, and you can use a different financial institution for this purpose.

Canadian Student Loans for College Students

October 7th, 2010
Canada Student Loans

Canadian Student Loans

One of the best places to obtain Canadian student loans for Canada college students is through the government. This is important because this is typically where you will get a very good interest rate, making it easier and more cost effective to pay off the loan after your graduation. If you are a fulltime student, no interest will accumulate on the loan until you have graduated or left school. If you are a part time student, however, interest accumulates while you are in school.

In either case, payments are not required until six months after you have graduated or left school. Interest starts accumulating on your loans one month after leaving school or graduating, if you were a fulltime student, even though payments are not due for another five months. You can, however, start repaying the loans while you are still in school, and those payments are applied directly to the principle, significantly reducing the amount that is owed, including interest, once you graduate.

These “student loans in Canada” are available to Canadian students who attend a post secondary institution as a full time student or as a part time student, if financial need is demonstrated. However, regardless of how much financial need actually exists, these programs will only provide up to 60% of the need. The most that you can get from these loans is $210 for each week that you are in school. The other 40% of the financial need will be provided for by provincial or territorial Canada student loans, instead of Canadian federal student loans.

These are ‘directly financed student loans’ from the government of Canada. This is not the same as a guaranteed student loan, or a private student loan, such as a loan you may receive from a financial institution. These are also not ‘risk-shared’ loans, which is a different program. Canada student loans that are issued directly by the government are governed by the Canada Student Financial Assistance Act, and they are administered by the National Student Loans Service Centre, or NSLSC.

Applications for these student loans for Canadian students can be obtained through your high school, the university that you will attend, or through the Student Financial Assistance Office in your province or territory. You can apply online as well, which usually results in a quicker response. Apply as early as possible, since it generally takes four to six weeks for your application to be processed. Loan proceeds are disbursed twice each year – at the beginning and middle of the academic year. You will have to apply for a new loan each year that you are in school, as they do not automatically renew.

After you have applied for all of the Canada grants that you are eligible for, as well as Canadian scholarships that you are eligible for, you may find that you still haven’t completely covered the cost of your education. If this happens, and if you are a Canadian student, you need to then apply for Canadian student loans for college.

Related Reading

BC Student Loans for Canadian Students

CIBC Student Loan Program for Canadian Students

NSLSC National Canadian Student Loan Service Centre

OSAP Ontario Student Loan Assistance Program in Canada