International Students: Borrowing Money In Canada Explained

International students can get loans in Canada, but their options are more limited compared to domestic students. While federal loans are unavailable to international students, private student loans are offered by lenders to international students enrolled at a Canadian school approved by the lender. These loans can be used for both educational and everyday living expenses. However, international students may face challenges in understanding loan terms, meeting eligibility criteria, and finding a co-signer. It is important for international students to carefully research their options and consult with a financial advisor if needed to make an informed decision.

Private student loans

As an international student in Canada, you may not be eligible for federal loans and may need to explore private loan options. International student loans are offered through private lenders, and each lender will have its own requirements and rules on eligibility.

To obtain a private student loan, you must typically have a cosigner—an individual who will take responsibility for loan repayment if the borrower defaults. However, international students enrolled at select Canadian institutions could be eligible to apply for student loans without a cosigner. Some private companies specialize in lending to international students but may require you to study in a specific field or come from a certain region to obtain a loan.

When evaluating a private student loan, you should consider the loan term, repayment options, and support services. Private loans may offer more options but could be more expensive. It is important to research all the available options and find a reputable lender that will offer a package that meets your needs. You can use a student loan comparison tool to see if your chosen school has one available. Once your application has been reviewed, you will receive details on your offer, including your interest rate and how much you can borrow, which will vary by lender and your situation.

Scholarships and grants

Scholarships, grants, and bursaries are available to international students in Canada, although these may differ from those offered to Canadian citizens and permanent residents. The University of Toronto, for example, is a publicly-funded institution and therefore cannot offer financial aid to international students. However, international students at the University of Toronto can still apply for the Lester B. Pearson International Scholarship, which is intended for students who demonstrate exceptional academic achievement and are recognised as leaders within their school. The University of Toronto also offers the International Scholar Awards, which are automatically awarded to exceptional international students and are worth over $100,000 in total.

The University of British Columbia (UBC) also offers scholarships to international students. The Outstanding International Student (OIS) Award is a merit-based entrance scholarship worth $10,000-$25,000 for the 2025/2026 academic year. The International Major Entrance Scholarships (IMES) are awarded to exceptional international students entering undergraduate programs at UBC and are valued at $10,000-$20,000 per year.

The Canadian government also offers scholarships to international students. The Study in Canada Scholarships provide students from select countries/territories in Asia, Europe, the Middle East and North Africa, and Sub-Saharan Africa with short-term exchange opportunities for study or research at Canadian post-secondary institutions. The Banting Postdoctoral Fellowships program provides funding to the best postdoctoral applicants, both nationally and internationally, who will positively contribute to the country's growth. The Emerging Leaders in the Americas Program (ELAP) scholarships provide students from post-secondary institutions in Latin America and the Caribbean with short-term exchange opportunities for study or research in Canadian post-secondary institutions. The Canada-ASEAN Scholarships and Educational Exchanges for Development (SEED) program provides students from member states of the Association of Southeast Asian Nations (ASEAN) with short-term exchange opportunities for study or research in Canada. The Canada-China Scholars' Exchange Program offers scholarships to Chinese scholars and professionals wishing to conduct research in Canada or pursue short-term study, research, or Chinese language training.

In addition to the scholarships offered by the Canadian government and universities, international students can also apply for grants and bursaries. University Canada West (UCW), for example, offers a variety of scholarships, grants, and bursaries to international students applying for associate, bachelor's, and master's degree programs.

Work-study programs

International students in Canada may have to pay for their tuition and living expenses themselves, and as such, may need to take out loans. However, there are other options for funding your studies in Canada, such as work-study programs.

Internships and co-op placements are typically integrated into academic programs and supervised by a workplace mentor or professor. These opportunities can provide valuable on-the-job training and often constitute up to 50% of the total program of study. To undertake an internship or co-op placement, international students will usually need a valid work permit, unless they are working on campus. Spouses or common-law partners of international students may also be eligible for open work permits.

Part-time jobs are another option for international students seeking to work and study in Canada. As of November 8, 2024, students are allowed to work off-campus up to 24 hours per week without a work permit, provided they meet certain requirements. On-campus jobs are also available, and some schools offer flexible part-time positions to accommodate students' academic commitments.

It is important to note that the eligibility criteria for work-study programs and work permits in Canada may vary, and students should refer to the relevant government websites for the most up-to-date information. Additionally, international students should ensure that their work commitments do not interfere with their academic studies, as maintaining good academic standing is crucial for visa requirements and academic progress.

Loan eligibility and requirements

International students in Canada face several challenges when it comes to securing loans, such as a lack of credit history and difficulty understanding loan terms and eligibility criteria. While federal loans provided by the Canadian government are often limited to Canadian citizens or permanent residents, international students can explore alternative options like private student loans or scholarships.

International students in Canada have limited options for federal loans and may need to explore private lenders. To be eligible for federal loans, international students must have protected status, such as refugee status, or be a permanent resident. The Canadian Student Loan Program is a federal option for international students who need repayable loans, but it primarily serves Canadian citizens.

Private student loans are available to international students, but the eligibility requirements vary. Some private lenders require a cosigner, while others, like MPOWER Financing, offer no-cosigner loans specifically for international students studying in Canada. To qualify for a private loan, a student may need to be enrolled at a Canadian school approved by the lender. Lenders may consider the borrower's future potential to repay the loan rather than solely relying on their credit history.

Before applying for a loan, international students should assess their financial situation, goals, and risk tolerance. They should also research the loan terms, repayment options, and support services offered by the lender. It is crucial to compare different loan options and consult with a financial advisor to make an informed decision.

In addition to loans, international students can explore scholarships, fellowships, and grants, which do not require repayment. These forms of financial aid are offered by universities, governmental bodies, and private organizations and may be based on academic merit, community involvement, or specific fields of study. International students can also work part-time while studying in Canada to supplement their income and cover some of their education expenses.

Loan alternatives

International students can also apply for grants from the Canadian government. These are available to both full- and part-time students from middle- or low-income families. Additionally, international students can work part-time on or off-campus to help cover their education expenses. Work-study programs always pay minimum wage or higher, but there are often income restrictions.

Another option is to take out a line of credit, which is a loan that allows you to borrow money repeatedly up to a preset limit. With a line of credit, you only pay interest on the money that you borrow, and you can borrow more if you need to. This can be a good option for students who need financial flexibility but are unsure if they will need a large loan.

Finally, some private lenders offer student loans specifically for international students, such as MPOWER Financing, which offers no-cosigner, no-collateral student loans.

Frequently asked questions