Here’s how to choose a lender for an education loan for Canada

Canada offers a lot of great opportunities for students who wish to pursue their higher education. But studying at one of the top universities in Canada can be difficult for most students to afford. This is why many banks and financial institutions provide education loans for Canada so that students can pursue further studies.

 Now, there are so many lenders in the market, that it often gets difficult for most students to choose a single financer from the many. If you are about to take a student loan and are wondering how to select a lender, read on for some quick tips that will prove helpful. 

Compare the interest rates

The interest rate is one of the most important factors to be considered while choosing a bank or financial institution for your education loan for Canada. Remember that even a minor difference in the interest charged can impact the overall amount that you will have to repay. This is why you must check and compare the different interest rates offered by various lenders and pick only the most economical option.

Look at the moratorium period

After the completion of your course, you would need some time to get financially independent as you search and apply for jobs. To give you some breathing space, banks and financial institutions usually provide a grace period (moratorium period) of around 6 to 12 months after you complete your course. During this moratorium period, you do not need to begin your repayment. This way, you get enough time to get a job and gain financial stability. So, look for a bank or financial institution that offers you the best moratorium period for your education loan for Canada.

Ask about the service charges

Banks and financial institutions will also usually levy a few charges when you apply for your education loan. These charges may include student loan application fees, processing fees, and so on as per their own system. Different lenders have their own rates for these additional charges that they levy on your loan. These service charges do increase the overall expense incurred by you on your education loan. This is why it is important to ask about these fees beforehand in order to make sure that there are no surprises in the future. Choose the lender with the most affordable charges.

Understand the terms of early repayment

Students often wish to pay back their education loan debt faster so that they can pursue other financial goals. Now it is important to understand that if you plan to make extra payments or pay off your loan sooner than the tenure set, there may be a penalty levied by the lender on you. So, make sure to ask the bank or financial institution about the penalty that they will charge so that you can choose the lender with the best terms.

Taking an education loan for Canada can be very easy and hassle-free with the right financer. Do keep in mind the points mentioned in this article for your reference when choosing a lender. Good luck!

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Study Loan Abroad Joined: October 9th, 2020