When it comes to preparing for higher studies in Canada, a study permit is the most important document you need to obtain. However, this entails detailed financial planning, which ensures your stay and transition into the country is smooth and without any hiccups.
Thus, if you’ve received admission to your dream institute in Canada, you should now begin your financial preparation without delay.
It’s vital that you plan-ahead and secure adequate funds to cover your tuition fees and living expenses throughout each year of your course in Canada. Without careful planning, financial difficulties may arise during your stay, potentially impacting your ability to focus on your studies or even hindering your course completion.
In this blog, we cover different aspects of financial planning that are required for you to pursue graduate education in Canada.
When Should I Start My Financial Planning for Canada-based Education
Initiate financial planning early (up to 1 year in advance) to gather necessary documents and funds for your Canada student visa application. This would help in preventing last-minute stress.
To begin with, you need to do the following:
- Research expenses and create a budget in advance.
- Open a dedicated savings account and seek financial advice to make informed decisions. This is especially important if you only have accounts in co-operative banks/small finance banks/non-banking finance companies (NBFCs). Such bank accounts are not acceptable while applying for Canada study permit. Thus, you should open this new savings account with a nationalized or private bank.
When starting your financial planning for a Canadian visa application, the first step is determining the suitable category for your visa application.
Canada provides two distinct categories for visa applicants – SDS and Non-SDS Category
- 1. The Student Direct Stream (SDS) offers faster processing for applicants from specific countries who meet the following criteria:
- IELTS score should not be less than 6.0 in any of the four modules and more than 6.5 overall.
- Student has paid the first-year tuition fee
- We recommend this category since the visa acceptances rate in this category are much higher than the non-SDS category.
If you do not meet the above criteria, you will have to apply through the non-SDS route, which is a conventional visa route for studying in Canada and has different requirements and longer processing times.
Financial Planning for Canadian Visa Applications
Biometric and visa application fees are CAD 235.
The financial requirements vary based on your individual circumstances and the type of visa application you’re pursuing, whether through SDS or Non-SDS.
For SDS applicants, specific financial documents and actions are recommended:
- Paying the first-year fees and obtaining a Guaranteed Investment Certificate (GIC) of CAD 20,635 which covers your living expenses.
- For the second year, demonstrate funds for tuition fees and living expenses (@CAD 20,635 per year depending on program duration – this figure is as per the IRCC, but may vary depending on the lifestyle).
- Arranging funds for tuition and living expenses. (Students should consider expenses like rent, utilities, groceries, dining, transportation, and personal costs. Researching the cost of living in your study city can provide insight into potential expenses.)
- Consulting with financial institutions for GIC and compliance.
- Organizing financial documents and creating a budget plan.
Financial planning For NON-SDS Category
As against the rules for SDS applications, non-SDS applicants must demonstrate liquid assets to cover at least the first year as well as second year. Acceptable liquid assets are:
- Savings
- Fixed deposits (FDs)
- GIC of CAD 20,635
- Education loan.
For showing the minimum fund requirements, a non-SDS applicant can use a combination of any of above four mentioned liquid assets (GIC being compulsory). Apart from these, a non-SDS applicant may use PF, Insurance, mutual funds, and other liquid assets to show additional amount funds over and above the minimum requirements.
For SDS Year 1 and NON-SDS Year 1-2 visa categories for Canada, you'll need to demonstrate:
i. Primary funding sources:
- Savings Account
- Fixed deposits (FD)
- Education Loan (Ensure that your loan amount adequately covers tuition fees, living expenses, and any other associated costs throughout your study program.)
ii. Backup funds:
- Other liquid assets for contingency.
Sponsorship Requirements for Canadian Visa Application
Only you and your parents can be sponsors. You will need an ‘Affidavit of Support’ from your parents.
If you are planning to show an educational loan, then you need to compulsorily submit Income Tax Returns (ITR) of your sponsors (which may include you). We recommend that the total annual income of all your sponsors should be Rs. 12 lakhs at least.
Collegepond Financial Advisory Services-
Again, if the amount of funds that you can show falls short, you can approach the Collegepond Financial Team for advice on how you can display the required funds in an acceptable way.
Please note that this advice is provided bespoke after we evaluate your case.
What should I ensure when I gather the above supporting financial documents?
There are a few things that you must bear in mind while you collect the requisite proof of financial funds:
- Financial documents should be recent, genuine, and in English or accompanied by certified translations.
- Statements should include the account holder’s name, account balance, currency, date, and bank seal or stamp.
- It is advisable that you show that you hold these funds with reputable financial institutions (for instance, it is preferable that you show savings account or term deposits with nationalized banks as opposed to cooperative banks)
Also, remember there are many scholarships available for study abroad aspirants (aside from those offered by universities). We have helped several of our students in securing such scholarships that can substantially reduce the financial burden of your education on your family.
If you wish to know about the different types of educational loans that you can avail of, you may refer to our write-up on education loans for foreign education.
Banking Advisory for Students Securing a Study Permit in Canada
- Open a Canadian bank account to streamline financial management.
- Conduct research on various banks, comparing services and fees to make an informed decision.
- Explore reliable and cost-effective methods for currency exchange from your home currency to Canadian dollars.
- Investigate debit and credit card options offered by Canadian banks as convenient alternatives to cash.
- Prioritize effective debt management strategies when using credit cards.
Once you have done the above, ensure that you have an emergency fund in place for unforeseen expenses like medical emergencies or unexpected travel needs. Dedicate a portion of your budget to safeguard your education against unexpected expenses.
For a detailed assessment of your financial planning, education loans for Canada, or any specific queries please contact Collegepond Financial Team at _____________________.
