The application process for a personal student loan from the Bank of Canada starts with meeting with a personal banker. This personal banker will run your employment and credit history and help you devise a loan plan that meets your needs. The personal banker will help you fill out the application and help you decide whether you will need to use your personal assets to secure the loan. During the application process you will need to confirm that you are enrolled in a Canadian educational institution, and provide an estimate of your school costs and a list of all your financial resources including savings, checking and salary data.
There are two main types of student loans from the Bank of Canada. These loans are the Royal Credit Line for Students, and the Royal Credit Line for Students with a Professional Designation. The Royal Credit Line for Students allows a credit line of up to $10,000 dollars per year, while the Royal Credit Line for Students with a Professional Designation allows a significantly higher credit line. You can apply for the professional designation only if you are pursuing optometry, engineering, pharmacy, podiatry, accountancy, occupational therapy, chiropractic, law, engineering, veterinary medicine, nursing, physiotherapy or an MBA/EMBA program. Pursuing one of these degree tracks will allow you to borrow between $40,000 and $150,000.
One of the main benefits of a Bank of Canada personal student loan is that the credit is revolving. This means that you can work with your personal banker to arrange what percentage of your loan you will receive per year. This means that you will not have to take the entire loan amount all at once, and you will not have to reapply yearly for the loan to continue.
While in school you will only be required to repay the monthly interest of the loan and none of the actual loan balance. However, you can pay on the balance at any time. After you graduate you will be given an additional 12 month time period before you will be required to pay anything on the principle balance. Once again you will still need to pay the interest on the loan during those 12 months. Once the 12 months is up, or if at any time you plan to leave school before graduation, you can set up a payment plan that fits your ability to repay with your personal banker.
A unique feature of the Bank of Canada personal student loan is not having to use the allocated funds. This means that if you are approved for $5,000 per year, but you only need $1,000 you will not be charged interest on the $5,000, only the amount of money that you use. If you choose not to use any money on your credit line, you will not be required to pay any fees or interest on the loan.