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Student Lines of Credit

In addition to applying for government loans and grants, we recommend that students also explore the student line of credit options available at most major Canadian financial institutions.

Frequently Asked Questions

A line of credit is a personal loan from the bank. Unlike a regular loan for a fixed amount, the bank doesn't provide you with the full amount of the loan at once. Instead, the bank establishes a "credit limit" for you as the maximum amount you can borrow. As you make withdrawals, the available credit is reduced. However, as you pay the money back, the amount available for withdrawal increases. You control how much of your credit limit you want to withdraw and when.

Yes, if you qualify.

This will depend on your bank. Students usually only have to pay the monthly interest. After students finish their studies, banks usually allow a grace period where students only make interest payments. After the grace period expires, repayment is negotiated with the lending bank and students must start making monthly payments that include part of the principal as well as the interest. For exact details, use the contact information on this page or speak with your bank representative for full details.

The student line of credit is designed for Canadian or Landed Immigrant students pursuing post-secondary education at an accredited/recognized post-secondary institution. Usually, full-time and part-time students qualify for the line of credit, with part-time students having lower credit line maximums. Some banks even give out lines of credit for students who are studying abroad in non-Canadian institutions.

A co-signer is a person who acts as a guarantor for a student (who may have a limited or poor credit history) in case the student is not able to pay off the line of credit. Typically, a co-signer is a parent or guardian who co-signs the line of credit so if the student is unable to make payments, the co-signer will take over and pay the balances. Most banks require co-signers for undergraduate students, but usually not for graduate students.

Financial Institutions

For your convenience, you can find the websites of major Canadian banks listed below:

Student Lines of Credit vs. Government Student Loans 
(Full-time Funding)

 

Student Lines of Credit

Government Student Loans

Amount of Assistance

Ranges from $5,000 to $8,000 a year depending on the bank. More funding is available for professional programs.

Maximum loans for an 8-month academic year is $13,300; more funding is available for higher cost programs and professional programs.

Interest Payments While in School

Yes.

No, as long as the student is registered in full-time studies.

Interest Rate

Varies depending on financial institution.

Prime + 2.5% for Canada Student Loans
Prime + 1% for Ontario Student Loans

Co-signer Required

Usually for undergraduates. Usually not required for graduate students.

No.

Repayment Assistance

No - Discuss the rate for monthly interest payments in advance.

Yes - Remission, Interest relief, etc.

Other Funding Programs

Not automatically considered for any assistance programs.

Automatically assessed for government bursaries and grants.

Student Line of Credit vs. Government Student Loans 
(Part-time Funding)

 

Student Line of Credit

Government Student Loans

Amount of Assistance

Ranges from $5,000 to $8,000 a year depending on the bank. More funding is available for professional programs.

Only covers educational expenses - to a lifetime accumulated 'outstanding' limit of $10,000.

Interest Payments While in School

Yes.

No payments are necessary while registered as a student, however, interest is accumulating during this time period.

Interest Rate

Varies depending on financial institution.

Prime + 2.5% for Canada Student Loans
Prime + 1% for Ontario Student Loans

Co-signer Required

Usually for undergraduates. Usually not required for graduate students.

No.

Repayment Assistance

No - Discuss the rate for monthly interest payments in advance.

Yes - Interest relief, etc.

Other Funding Programs

Not automatically considered for any assistance programs.

Automatically assessed for government bursaries and grants.