How to get a loan as a student

Find out what you need to do to get a loan as a student in Canada and how to apply.

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We’ll walk you through the options you have to take out a loan as a student and how to increase your chances of approval. Read on to find out how you can get access to more cash.

How do loans for students work?

There are two main types of loans for students: student loans to pay directly for education and personal loans.

Student loans work just like installment loans, where the money you borrow is paid back in monthly installments over a set period of time. The average amount of students in Canada borrow is $26,000 while the typical term for repayment is 10 years.

The way your student loan will work will depend on whether you take out a government or private loan Sometimes, you may even need to take out a combination of the two, if your government loan doesn’t cover all of your expenses.

  • Government loan. Interest is set at a fixed or fluctuating rate (around 6.5-9%) and starts accumulating as soon as you graduate. You’ll have to start making payments on your loan six months after that.
  • Private loan. Interest is typically higher (but not always) than with a government loan and starts accumulating as soon as you take money out. You’ll often have to start making payments on your loan from the moment it gets issued.

Personal loans can give you access to additional cash to spend on a variety of expenses. However, it can be challenging for students to qualify.

Why is it difficult to get a personal loan as a student?

There are a couple of reasons why it might be challenging to take out a loan as a student:

  • No credit. Unless you’ve taken out loans or credit cards before, you won’t have a credit history. This will make it harder to borrow since lenders won’t be able to prove you have a good track record of repaying your loans on time.
  • Little income. If you’re a student, you probably don’t have much money coming in. This can be a problem for some lenders, who may expect you to show proof of income to be sure you can make payments on your loan.
  • Bad credit. If you’ve missed payments on previous loans or credit cards (especially if you have very little credit history), your credit score might be too low to qualify for a loan.
  • Lack of assets. Assuming you’re younger than 25, chances are you may not have any assets to put up against your loan. This means you won’t be able to qualify for a secured loan and it can be much more difficult to get unsecured loans for large amounts.

What type of loans can I get as a student?

There are several types of loans you may be able to qualify for as a student. Take some time to figure out which type best suits your needs.

  • Government loans. The easiest way to borrow money while you’re in school is to go through federal and provincial student loans. That being said, many students won’t qualify because their parents’ incomes are too high.
  • Secured loans. If you own any assets (like a house or vehicle) you should be able to take out a secured loan. The downside is if you default on your payments, your lender has the right to sell your asset to reclaim its money.
  • Unsecured loans. Lenders rely on your credit score to see if you’re eligible, so it’s important to have a good credit history (which means you’ll need to have had some form of loan or credit card in the past that you’ve paid back on time).
  • Bad credit loans. If your credit history needs work, you may be able to qualify for a bad credit loan. These loans typically come with higher interest rates, so be careful about taking them out for large amounts.
  • Guarantor loans. If you want low interest rates but you don’t have a good enough credit history, then you might be able to ask family or friends to cosign your loan. This should bring your interest rates down and you may even be able to qualify for a larger amount.

Compare loans you may be approved for as a student

Select “Compare” to see if you meet the eligibility requirements before applying with a lender.

Name Product Interest Rate Min. Loan Amount Loan Term Min. Credit Score
5.9% - 46.96%
$2,000
1-5 years
540
Mogo offers loans up to $35,000 on flexible terms.
9.47% - 20.07%. Varies by loan size (excluding Quebec)
$1,600
3-5 years
N/A
A loan that you repay before gettּing access to the funds. Enjoy no upfront fees and a low interest rate.

Compare up to 4 providers

Name Product Interest Rate Min. Loan Amount Loan Term Min. Credit Score
5.9% - 46.96%
$2,000
1-5 years
540
Mogo offers loans up to $35,000 on flexible terms.
18.9% - 54.9%
$2,000
1-5 years
550
An established online lender with loans up to $10,000. Now accepting applicants on El and Social Assistance.

Compare up to 4 providers

Name Product Minimum Income
Depending on circumstances
Fairstone offers secured personal loans up to $35,000.
$2,000/month
An established online lender with loans up to $10,000. Now accepting applicants on El and Social Assistance.
$1,500 monthly
Borrow up to $15,000, based on your income and credit history, with a personal line of credit from LendDirect.
No minimum, must be able to afford repayments without financial burden
LendingMate offers loans to Canadians with poor credit with no credit checks. Guarantor required for application.
$1,000/month
A loan that you repay before gettּing access to the funds. Enjoy no upfront fees and a low interest rate.

Compare up to 4 providers

Name Product Interest Rate Min. Loan Amount Loan Term Min. Credit Score
19.99% - 23.99%. Varies by loan type and province
$5,000
3-10 years
N/A
Fairstone offers secured personal loans up to $35,000.
9.47% - 20.07%. Varies by loan size (excluding Quebec)
$1,600
3-5 years
N/A
A loan that you repay before gettּing access to the funds. Enjoy no upfront fees and a low interest rate.

Compare up to 4 providers

How to compare loans for students

To decide on which loan is the right fit for you, it can help to look into some of the following factors:

  • Lowest rates. Low interest rates are the number one factor you should look for with your student loan. Government loans usually charge around 6.5–9% while private loans can fluctuate depending on the lender.
  • Best repayment terms. Look for a lender that has measures in place to help you if you can’t make repayments on time for some reason. For example, government loans will often offer repayment assistance plans to reduce your payments if you make below a certain income.
  • No fees. If your lender asks you to pay fees on your loan, chances are you should keep looking for a better offer.
  • Good customer service. If you opt for a private loan, then make sure the lender you settle on has a good reputation and solid online reviews.

Step-by-step guide to apply for a loan as a student

The basic steps to apply for a student loan will vary based on whether you’re taking out a government or private student loan.

Government loans

  1. Create an account. You’ll want to start by creating an account with your provincial student loan organization. For example, in BC you’d go through StudentAidBC while in Ontario, you’d go through OSAP.
  2. Apply for funding. Once you’ve filled in all of the necessary information, you can apply for money. You’ll need to show proof of enrollment/income and provide details for direct deposit.
  3. Sign your contract. The first time you apply for loans, the government will send you a Master Student Financial Assistance Agreement (MSFAA) that you’ll need to sign and send back before you can access your funds.

Private loans

  1. Check your credit score. You’ll need to check your credit score before you apply for a private loan. You can do this by applying for your score through Equifax or Transunion. You should be able to take out a loan fairly easily if your score is above 650.
  2. Fill out your application. Once you find a lender, you’ll need to fill out a paper or online application, complete with your personal and banking info.
  3. Verify your ID and income. You may also have to prove some basic details like who you are and how much money you make. This will require you to submit proof of income (like your pay stubs or tax returns) as well as a government-issued form of ID.

Bottom line

If you’re a student and need to pay tuition or cover the costs of living, you may benefit from taking out a loan. Learn more about what options are out there and compare lenders to find the right loan for you.

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