Savanna Hoffman
International students in Canada often rely on private student loans to cover tuition fees and living costs. While the IRCC (Immigration, Refugees and Citizenship Canada) expects international students to finance their studies themselves, there are no formal prohibitions on taking out a loan to do so. International students can apply for private student loans without a cosigner if enrolled at a Canadian school approved by a lender. Lenders will consider academic success, career path, home country, graduation date, and the school being attended. Federal loans are available but may be limited to Canadian citizens or permanent residents.
| Characteristics | Values |
|---|---|
| Availability of loans | Yes, international students can get loans in Canada, but options are more limited than for domestic students. |
| Sources of loans | Private lenders, banks, and some private companies. |
| Loan types | Secured and unsecured loans. |
| Interest rates | Variable, depending on the lender and the borrower's situation. |
| Eligibility criteria | Academic success, career path, credit history, income verification, assets for collateral, citizenship status, etc. |
| Application process | Online applications are common and usually involve providing proof of financial security. |
| Disbursement | Funds are typically disbursed directly to the educational institution within about six weeks. |
| Repayment | Repayment terms vary and may include interest. |
| Alternative options | Scholarships, grants, and bursaries are available from universities, governmental bodies, and private organizations. |
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What You'll Learn
Private student loans
International students in Canada often rely on private student loans to cover their tuition fees and remaining costs. While federal loans are more affordable, they usually have restrictions and are limited to Canadian citizens or permanent residents. Private loans, on the other hand, offer more options but might be more expensive.
International students can apply for a private student loan without a cosigner if they are enrolled at a Canadian school that is already approved by a private lender. The lender will look at the student's academic success and career path, not their credit history or that of a cosigner. However, some lenders may still require a good credit score/history, while others may take into account the borrower's future potential to repay the loan balance. A few other factors they will consider include the student's home country, expected graduation date, and the school they attend.
There are several companies that offer private student loans for international students in Canada. MPOWER Financing, for example, provides no-cosigner, no-collateral student loans to international students in Canada and the United States. With MPOWER Financing, students make monthly interest-only payments while in school and for six months after graduation. After that, they begin repaying the interest and the principal amount. Prodigy Finance is another company that offers international student loans for eligible borrowers, with competitive interest rates, flexible repayment options, and personalised support.
The application process for private student loans is generally simple and can be completed online. Once the application has been reviewed, the student will receive details on their offer, including the interest rate and how much they can borrow. This process usually takes about six weeks. If the application is approved, the funds are disbursed directly to the student's college or university.
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Federal loans
International students in Canada are not eligible for federal loans. However, some international students with protected status, such as refugees, are eligible for federal loans through the Canada Student Loan Program. The primary loan source for international students is through private lenders.
Private student loans are available to international students enrolled at select Canadian institutions. These loans are offered by banks and financial institutions and can be customized to the borrower's needs. They may, however, require a cosigner or collateral. Private lenders will consider the applicant's academic success, career path, home country, expected graduation date, and the school they attend. While most lenders will review the applicant's existing credit report and some require a good credit history, there are lenders that operate in other ways and take into account the borrower's future potential to repay the loan.
International students can apply for private student loans without a cosigner if they are enrolled at a Canadian school that is already approved by a lender. A cosigner is an individual who will take responsibility for loan repayment if the borrower fails to do so. While a cosigner is not required in Canada, having one may improve the interest rate offered.
The Canada Student Financial Assistance Program offers grants and loans to full-time and part-time students to help pay for their post-secondary education. The Government of Canada works with most provincial or territorial governments to offer student grants and loans. The provinces and territories determine which schools and programs can be designated for funding.
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Scholarships and grants
International students can apply for private student loans without a cosigner if they are enrolled at a Canadian school that is already approved by a lender. However, before applying for a loan, it is recommended that students exhaust all scholarships, personal funds, and other options first.
- The Study in Canada Scholarships provide international students from a wide range of countries and territories with short-term exchange opportunities for study or research at Canadian post-secondary institutions.
- Scholarships for students in Latin America and the Caribbean to pursue short-term studies or research in Canada.
- Scholarships for students in select countries and territories in Asia, Europe, the Middle East and North Africa, and Sub-Saharan Africa to pursue short-term studies or research in Canada.
- Scholarships for students from the member states of the Association of Southeast Asian Nations (ASEAN) to pursue short-term studies or research in Canada.
- Global Affairs Canada’s Flight PS752 Commemorative Scholarship is accepting applications for the 2025-2026 academic year.
- The Canada-China Scholars' Exchange Program (CCSEP) offers scholarships to Chinese scholars and professionals wishing to conduct research in Canada, specifically in the area of Canadian studies.
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Loan eligibility
Credit History and Co-signers
One of the biggest challenges for international students is the lack of a credit history in Canada, which is often required by lenders. Traditional banks may require a creditworthy co-signer who is a Canadian citizen to secure an education loan. However, some lenders do not require a co-signer and may instead consider the borrower's future potential to repay the loan.
Loan Terms and Interest Rates
Understanding the loan terms and interest rates is crucial. Federal loans offered by the Canadian government may have favourable interest rates but could be limited to Canadian citizens or permanent residents. Private loans offer more flexibility but might be more expensive. Variable interest rates can offer lower initial rates but come with the risk of increasing over time, while fixed-rate loans provide stability with constant rates throughout the loan term.
Academic Performance and Career Path
Private lenders may consider the borrower's academic success and career path when evaluating loan eligibility. International students should also research scholarships, bursaries, and grants, which do not need to be paid back and can help cover some of the costs of studying in Canada.
Financial Need and Support
To be eligible for a Canadian study permit, international students must demonstrate proof of financial security. A single student in most provinces of Canada would need to show funding to cover tuition plus $10,000 for a year, with additional funds required for accompanying family members or dependent children.
School and Program Eligibility
Eligible students must be attending a university with a student loan program supported by a private lender. Certain private companies may only lend to students studying in specific fields or from particular regions.
In summary, international students seeking loans in Canada should carefully research the eligibility criteria of different lenders, including banks, private companies, and government loan programs. They should also explore alternative funding options, such as scholarships and grants, to ensure they meet the financial requirements for studying in Canada.
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Interest rates and repayment
Most international students in Canada rely on private lenders, such as Canadian banks or specialised platforms like Passage, which offers a fixed interest rate of 11.95% APR on its loans. MPOWER Financing is another specialised platform that provides tailored solutions for international students, including monthly interest-only payments while in school and for six months after graduation. After this period, borrowers begin making payments on both interest and the principal amount.
When it comes to interest rates, borrowers can choose between fixed and variable rates. Fixed interest rates remain constant throughout the loan term, providing predictable monthly payments that aid in budgeting. While they may start higher than variable rates, they offer stability and peace of mind. On the other hand, variable interest rates fluctuate with market conditions and can offer a lower initial interest rate. However, they come with the risk of increasing over time, which can be challenging for borrowers trying to stick to a consistent budget.
The amount borrowers can take out in loans is also up to the lender, and it is generally recommended to only borrow the total cost of education plus the cost of living. Repayment schedules typically begin six months after graduation, and during the studies, payments are often reduced or zero. Early repayment is encouraged by some lenders, and there is no penalty for closing the loan early. To obtain a loan, borrowers may need to demonstrate their ability to repay through bank statements, credit reports, or other financial documentation.
While private lenders typically require a credit check, some operate based on the borrower's potential to repay the loan in the future. Additionally, most private student loans require a cosigner, but international students enrolled at select Canadian institutions may be eligible to apply without one. In these cases, lenders may consider the borrower's academic success, career path, home country, expected graduation date, and the school they are attending.
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Frequently asked questions
International students can get loans from private lenders, which can be spent on educational and everyday living expenses. Students can apply for a private loan without a cosigner if their university is approved by a lender. Some private companies may require students to study in a certain field or come from a specific region.
The requirements for getting a loan as an international student in Canada vary depending on the lender. Some lenders require a credit history, while others may look at the borrower's academic success and career path. It is important to research the eligibility criteria and loan terms before applying.
Yes, international students can explore scholarships, bursaries, and grants offered by organizations within or outside Canada. These options do not need to be paid back and can provide valuable funding for international students. Additionally, students can work part-time to help pay off their loans faster.
Interest rates and repayment terms vary depending on the lender. It is important to understand the different types of interest rates, such as fixed and variable rates, before choosing a loan. Students should also be aware of the repayment terms, as some loans may require immediate repayment upon graduation.
