Best Canadian Universities for 2015

McGill University

Simon Fraser (University of British Columbia)

University of Toronto (UofT)

Mount Allison (New Brunswick)

Queen’s University

University of Victoria

Educational Grants and Loans

Educational loans and grants are intended for students who attend post-secondary institutions and help them cover school-related expenses such as room and board, supplies and textbooks, and others.

Loans

Funding is available under government programs and through private lenders such as credit unions and banks. Federal and provincial loans are offered to students through Canada Student Loans as well as programs run by the provincial and territorial governments. Only students who are able to demonstrate financial need qualify provided that they are enrolled half- or full-time at an accredited institution of higher education. In addition to government-funded assistance, private lenders offer loans (click here or go to lifeoncredit.ca for more options) to individuals who are enrolled in professional programs. Another option is to apply for a student line of credit offered by major financial institutions such as the National Bank of Canada, Toronto-Dominion, or Royal Bank of Canada. They are available to students and their parents, and borrowers benefit from attractive interest rates and flexible limits and repayments terms.

Grants

Grants are offered by the government to persons with permanent disabilities and dependents, those enrolled part-time, as well as students from middle- and low-income families. They are available to undergraduate students who are enrolled in a diploma, degree, or certificate program at an accredited institution. Grants are offered in fixed amounts based on eligibility under the federal program. They are not available to residents of Nunavut, the Northwest Territories, and Quebec because their provincial and territorial governments maintain their own programs. Persons with disabilities are asked to provide proof of disability together with their application. This can be a psycho-educational assessment, medical certificate, or another document. Visit your financial assistance office to apply for a grant. There are different options to explore depending on your territory or province of residence, including the Québec Education Savings Incentive, the Saskatchewan Advantage Grant, Alberta Centennial Education Savings, the Canada Learning Bond, and the Canada Education Savings Grant.

RESP

The registered education savings plan is a third option to access financing for school-related expenses. This is a type of a tax-sheltered solution that allows holders to make contributions and save toward postsecondary education. Savings accumulate tax-free in a special account to fund your grandchild’s or child’s education. Before you choose a provider to open a RESP, you may want to consider factors such as payment options, penalties, limits, fees, and others. In general, there are 3 options to choose from – group, individual, or family plan. Group plans are designed for children that are not necessarily related to the RESP holder. They are usually available through dealers that specialize in low-risk investment vehicles. Non-family or individual plans can be used for children unrelated to the holder while a family plan is the right choice for parents with more than one child. The same goes for sisters, brothers, grandchildren, and stepchildren but not uncles, aunts, nephews, and nieces.

In addition to these options, there are other ways to cover college expenses, including student credit cards (see more options), consumer loans, secured loans, and others.

Other Credit Options for Students

Getting a student car loan is more difficult if you are new to credit or have no income and steady job. The good news is that there are several options for students who are looking for funds to finance the purchase of a vehicle.

Options for Students

Even if you are working part-time or are unemployed, there are options to explore. Contact your local bank to check whether they offer student loan products. Car manufacturers also offer financing options, and it is worth checking whether you qualify. Factory-direct products are available to returning students with limited credit exposure as well as new students. Another option is to check with your local union or ask your parents to contact their financial institution if they are union members. If your parents are willing to cosign for you, this can be a good way to find a low-cost loan to buy a car (click here). A cosigner can be a relative, parent, or anyone else with a stable income and a strong credit score. Just remember that the cosigner is also responsible for repayment. There are other options for students, one being to post a listing on a peer to peer lending network. Some private lenders are willing to deal with borrowers who are new to credit and have less stated income. Car dealerships also offer vehicle financing but the interest rates tend to be higher. Ask your car dealer about details such as the monthly payment, charges, term, and whether rebates are available. Extended warranties are also offered on new vehicles. A final option is to ask your parents for a loan to buy a used vehicle.

What to Expect

While there are lenders that offer car loans to students, the interest rate is likely to be higher because you are considered a high-risk customer. This means that you will be paying off expensive debt over the repayment term. But even if you are unemployed, in between jobs, or have low-paid employment, there are some ways to go about this and lower the interest rate. One idea is to offer a larger down payment to get approved and increase your chances of being offered an attractive rate. If you have secured or unsecured credit cards, you can use a low-interest card to make a down payment (click here). Avoid high-interest cards, however, especially if you only pay the minimum. Interest charges accumulate and add to the cost of your car loan. If you don’t have a credit card, this can be a good time to shop around for low-interest cards as some financial institutions offer solutions that are specifically designed for college students.