How I got International Student Loan in Canada without collateral ? Personal Experience
This entire article will be about student loans and what was the entire procedure by which I got loan, which bank was mine, how much loan did I take and did I have troubles, what difficulties can you have, and how much loan you can get!
Similarly, I will also share how much loan can be obtained by mortgaging the land, or how much loan can be obtained without providing any collateral.
In this article, I will explain everything that I know based on my experience. And first, for those who do not know, I took a student loan when I first moved to Canada.
So, first of all, let's talk about how you can take loan, what is the type, how can you take loan.
The bank that offers you student loan are in two types.
First, There is a loan with collateral,
which means you have to give your documents or your land papers or your house papers or anything else you have as a security to the bank, and the bank will grant you the loan on that basis. The bank will return your papers as soon as you pay off the debt.
The second approach does not require any collateral, which means you do not need to mortgage any paper or anything. You will receive the loan as usual. The bank will not demand anything from you.
However, there is a maximum loan amount, and you cannot borrow more than that. So the amount is 7.5 lakhs Indian Rupees (Roughly $10,000).
I took a loan of 5 lakhs.
I have also not mortgaged any papers.
How can you get the student loan in Canada without collateral?
So, let me walk you through the entire process.
First, let me tell you that if you mortgage any collateral, ie. if you mortgage your land and the property's value is 50 lakhs, at that time. Some banks may grant you 50% of the amount, which would be 25 lakhs on a property worth 50 lakhs. Some banks will grant up to 50 lakhs on land worth 50 lakhs, while others will provide more than 50 lakhs at a higher interest rate.
So it depends because each bank has a different policy, a different interest rate, and a different way of determining how much loan they will grant.
So the second item is the loan without collateral, which I believe is 7.5 lakhs and would be the same in every bank.
And the one key criteria you have on that 7.5 lakh loan, I'm going to tell you right now, pay attention.
Who can get student loan loan without collateral?
Firstly, this loan will not be available to everyone.
If your parents file ITR (Income Tax Returns), and you have an excellent credit history, haven't had any troubles with the bank, etc., and have always made payments on time, you should be able to get this loan easily.
For example, if we file ITRs every year and our previous record is likewise good, our file can be easily applied. So, in whose name you are taking a loan, his entire history, credit score, and ITRs are reviewed.
Secondly, my bank was NRB Bank, as you may know I am from Nepal.
What is the criteria get the student loan without collateral?
In the bank, if you want to take a loan without collateral, you need two granters, which means two persons whose income comes in every month in that bank, whether from a government source or a private source, but someone who is stable.
They wanted someone whose salary was directly transferred to the bank.
Now, the guarantors can be anyone, whether it is a blood related, your parents, a relative, a friend of yours, or someone who does not know you, but is ready to sign a paper stating that
if you are unable to pay the loan, he/she will pay the loan.
So, the money will be deducted from their account. It is quite difficult to find two such persons because, as you are aware, no one nowadays takes someone's guarantee. That's why it took me so long.
I had a problem with the loan process because guarantors were not available. I only had a friend whose father is a policeman, so he assisted. So, just like I had a bank requirement, I required two guarantors.
Every bank has its own set of rules and procedures, and on this topic, I'll go over everything in detail. So, it was about my bank.
So, two guarantors were required, and there was a loan in my mother's name. They went through her full profile and everything was good. The third item was the college fees.
The fees is listed on the offer letter from the college to you. As a result, if you attach them to your documents, the bank will have an idea of how much money you require. Now you're probably wondering how it would work because our fee is 16 lakhs for two years
and the loan is only 7.5 lakhs.
So, you must deposit the remainder of your funds in your loan account, which is a bank created account for you.
I took out a loan for 5 lakhs, but my annual fee is 8 lakhs. As a result, I must deposit 3 lakh myself. So I set up a loan account to pay for my college fees.
So, if you have to pay the fees for two years, you must deposit the outstanding amount into your loan account, but only if you have to pay all of the fees at once. In my instance, though, I received assistance from the bank for only the first year's fees and paid the second year's fee myself.
What troubles did I face while searching for student loan?
I had a lot of trouble with this as well since many times when I went to the bank, they stated, "You provide us comprehensive details whether you would be able to pay your next year fees or not." We honestly don't know you'll get your job or drop out depending solely on a prediction.
The bankers stated that we will grant you a one-year fee, but if you drop out after one year because you are unable to pay the cost, you will not get any job and will be unable to repay the loan.
Many banks refused to provide me a loan because they stated that we do not pay a one-year cost, but rather a two-year fee. The bankers stated that you could either take 7.5 lakh from us and put the remaining amount in the loan account, and the entire amount would remain in your loan account till your fees were paid, or you could take a loan from us based on your collateral.
So these were some of the issues I encountered, and I was telling you about them. But later, we had a bank connection, so he offered us his guarantee, and our work was completed quickly.
I recommend that you go through each bank and discuss the loan with them, including how much money will be available and what the interest rate would be. So, as I previously stated, each bank has a unique system.
As a result, you must obtain loan information from each bank in order to choose which bank will benefit you the most. So I attempted HDFC, SBI, and J&K Bank.
So, let's talk about how you have till 5 or 7 years to pay off your debt.
Let me give you an example: suppose I have a two-year programme, and my bank says, "Your programme will conclude in two years, and we will offer you time up to one year beyond that."
As a result, you will have a total of three years to find work and return the loan. That is, my 7-year span will begin after three years.
For example, my studies began in 2017 and will conclude in 2019, thus my loan repayment process will begin in 2020.
Some students are now asking that they don't have to give any money to bank?
It is not the case,you will only have to pay interest till then.
So the interest amount you pay is less than the loan repayment amount, so what benefit do you get from it that you can pay little by little for three years, so that your loan is also maintained and then three years later,if you have a job, you will be able to pay.
Let me add one more thing: if you took out a loan in 2017, In 2018, you received 5/10 lakh. If you hand it over to them, they will accept it and your loan will be terminated. You are not required to wait indefinitely.
If you took out a loan today and received money tomorrow, you can repay it without having to wait the whole term of the loan. Another thing is that I have to pay the interest for three years.
So if you pay interest for three years, that implies that if you took out a loan today and are paying interest for three years, that interest is not your loan repayment, it's the extra money you are giving to the bank and it's your loss.
If you want to begin repaying the loan the following month, you can do so; however, the payment will be slightly higher. If you believe you can afford it, you should go with the installments since why would you pay interest for something that you will have to pay for an extra three years?
So you see how you may repay the loan, and if it is a collateral loan, then I did not take such loan by mortgaging any land, but it would have been straightforward for you.
For example, if you have sanctioned amount, you will receive the full amount. There is no trouble in that we will give half the sum and you will give the remainder; there is nothing like that. They will give you the entire amount and expected you to return it later.
So I've covered both of these topics, and if anything is unclear to you, I recommend that you go to your bank branch or the bank where you have your account and speak with their loan officials.
Get complete details, such as what the interest rate is and how much the amount is, so that everything is clear to you. Each bank has its own system. It's not as if I told you my experience, so you should be doing the same.
So this depends on the bank. Apart from the loan, the second main thing I'm going to talk about is degrees v/s diplomas. This counts a lot with some banks, for example, when I had to have the loan section done from SBI Bank, I talked to them, did everything, and when they read my offer letter, they said this is a two-year diploma course. They stated that our policy is not to provide student loans in exchange for diplomas.
Meaning, they can only provide loan for degree courses. As a result, even though my full documentation was ready, I was unable to get the loan sanctioned by SBI. That is why I had so much problem because the loan was not sanctioned in SBI and guarantors were not available at J&K Bank, causing my process to be slightly delayed.
When you go to a bank, you should tell them that you have a two-year diploma or degree and you tell them everything once, show them the offer letter, so nothing becomes an issue afterwards.
The third question I get is whether the GIC will be covered if the bank provides us a loan. If you don't know what GIC is, I have made a whole video about GIC that you can watch.
So now I'm going to discuss whether or not the bank will lend money for a GIC. So , banks do not lend money for GICs because GICs are money for our personal security.
When we deposit 5 lakh rupees from India, we receive a portion of the money every month in Canada. So that's why I'm telling you that because you get the GIC you deposit, many banks don't consider it a fee and won't grant you a loan for it.
The second thing is that if you discover any such bank, since when I went live on Instagram four or five days ago, someone there told me that there are certain banks who give loans for GIC, but their interest rates are a little high.
So you should talk to the bank about what a GIC is, how it works, and whether or not they can issue you a loan based on that. If you have savings, you can simply pay for Canada; nonetheless, the loan process can be complicated. I won't say it's impossible, but there's a stress involved, but once everything is finished, everything is fine.
So, I took a loan of 5 lakhs from J&K bank, I can now pay it whenever I want as long as I have money. So, I hope you found this video helpful, and that you have a few ideas concerning loans now that I've discussed some essential points with you.
I don't believe I left anything out, but if you have any questions, please leave them in the comments section and I will answer them. Thank you, and have a good day.