Education in Canada is gradually becoming costlier for average students. Students have to go through many difficulties to get admission in renowned institutes. To overcome this problem, many students are provided with student loans Canada. These loans are granted to students who want to complete their education. Though this is a good way to encourage students with their studies, it is also a burden on students, as they have to go through the process of debts and loans even before getting a stable job. Loans for students are available in two different ways.
One is through the Canada Student Loan Program, which is a government funded program and the other is through Canadian banks that offer student loans in the form of private loans and debts.
Canada Student Loan Program
The Canada Student Loan Program or generally known as the CSLP is a federal government loan given out to any permanent Canadian citizen. However, this loan has no interest charges if students wish to avail it for full-time studies at an institute. According to a policy implementation of August 1, 1995, undergraduate students can get a maximum time period of 6.5 years without paying any interest .Students pursuing a doctoral degree are eligible for 7.5 years of interest free loan period. Lastly, physically challenged students are given a relaxation of 10 years without interest on loans. Crossing this period means paying back the loan with interest charges. Students who wish to take a loan must take into account the length of their study period.
Private Banks and Institutions
Government funded loans may be interest free, but the process itself is pretty lengthy and complicated. For this reason, students opt for private banks and financial institutions to get loans quickly and effectively. The private loans of course are not free of interest, though it will be at a low rate for students. The private loans have different interest rates according to their financial strength, dealings with the university etc. Students have to be very careful when they apply for any loan from a private association, as these loans are in no way connected to government funded loans, and you would be at the mercy of the private lender, instead of governmental assistance.
Once a student picks on a federal student loans , the borrower must be extremely cautious of the way it is to be spent so as not to over-burden himself. Parents too must get on a good budget system to effectively repay the student loan. The main point is that if the payment is not done on time, the student will have bad credit history even before he gets a job for himself and this will damage his professional standing.
Our loans guide, will assist you in finding more about student loans in Canada.
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