Student Loan Repayment in Canada – Rates, NSLSC and Timelines

Learn more about student loan repayment in Canada, including rates and timelines.

What is the average student loan repayment rate in Canada? How much does it cost to repay my student loans? Also, what is the timeline for repaying my student loans?

Let us assume you are currently studying at a university in Canada. You have two federal government student loans (one from the Canada Student Loans Program and another from the Ontario Student Assistance Plan). The total amount borrowed is $28,000. The interest rates are 4% per year.

The question is: Is it possible to pay off the student loans early? If yes, then how much would it cost? And how long would it take to pay them off? This article effectively explains the modes, rates, and timelines of repaying your student loans in Canada.

What is Student Loan in Canada?

A student loan is an unsecured personal loan that does not require collateral or security from the lender. The average Canadian student borrower has $27,000 in outstanding student loan debt.

Student loans are a great way to finance your higher education. However, if you want to pay off your student loans faster, you should consider refinancing or consolidating your loans.

In addition, Student loan consolidation is a good option because it allows you to repay multiple loans at once. This means you’ll only have to make one monthly payment instead of several.

Canada Student Loan Program

The Canada Student Loan Program is a government-funded financial assistance program that provides loans to full-time and part-time students enrolled in a post-secondary institution. The program is available to students who are Canadian citizens or permanent residents, and it offers financial assistance for both undergraduate and graduate studies. Loans are provided to cover the cost of tuition, textbooks, living expenses, and other associated costs.

To be eligible for a Canada Student Loan, students must meet specific criteria. For example, they must be enrolled in an approved program at a qualified institution and demonstrate that they have sufficient financial needs. Loan amounts vary depending on the student’s situation, but the maximum loan amount for undergraduates is $210 per week of study.

Students who receive a Canada Student Loan must repay their debt six months after completing their studies.

Private Student Loans

Private student loans in Canada are offered by various lenders, including banks, credit unions, and online lenders. Borrowers can get private loans to cover their entire cost of education or to fill the gap between what they receive in government loans and the total cost of school.

Private student loans typically have a higher interest rate than government student loans. But borrowers often get a lower interest rate if they have a good credit score.

To apply for a private loan, borrowers must provide information about their income, assets, and educational expenses. In some cases, you may be required to provide a cosigner- an individual who will assume responsibility for loan repayment if the borrower fails to do so.

The lender will then decide how much money to lend based on the borrower’s credit history and ability to repay the loan.

Borrowers should compare lenders to find the best interest rate and terms available.

In addition, International students enrolled at certain Canadian institutions may be eligible to apply for student loans without a cosigner.

You can check the list of schools in Canada that have received loan approval to see if you are eligible to apply. This list will also show whether or not a school has been approved for no cosigner loans.

Interest rates on Student Loans in Canada

The government sets the interest rates for student loans in Canada. The current rate for new loans is 5.95%. In addition, this rate applies to both federal and provincial student loans. The interest rate is fixed for the life of the loan.

The Canada Student Loan Program offers several benefits to students. One of these benefits is that the interest rate is fixed for the life of the loan. As a result, students do not have to worry about their interest rates increasing over time.

Another benefit of the Canada Student Loan Program is that there is no penalty for paying off your loan early. As a result, students can save money on interest by paying off their loans sooner than expected.

The Canada Student Loan Program also offers several repayment options. Students can choose from various repayment plans, including monthly, semi-monthly, or annual payments.

Repayment and Timelines

In Canada, student loan repayment begins six months after completing your studies. You have a nine-month grace period following your graduation, during which you are not required to make any payments. Your loan servicer will contact you about repayment plans and options before your grace period ends.

Several repayment plans are available in Canada, including standard; extended; graduated; income-based, and income-contingent. You can choose the plan that best suits your needs and ability to repay. Payments under all plans are typically due monthly.

Your loan servicer will collaborate with you to develop an affordable payment plan that meets your needs. If you have difficulty making payments, please get in touch with your loan servicer as soon as possible so they can help you find a solution.

How to Get a Student Loan from NSLSC

Applying for a student loan from the National Student Loans Service Centre (NSLSC) is simple. But first, you must be eligible to apply.

You are automatically considered for Canada Student Grants and Loans when eligible for student financial aid. The application process consists of five steps:

#Step 1: Begin application

First, you begin the application process by applying for a Canada Student Grant and Loan online at the student financial assistance website of your permanent residence province or territory.

Depending on your location or province, you may be eligible for a combination of federal and provincial student grants and loans.

#Step 2: Wait for your province/territory to send you a Notice of Assessment

Your Notice of Assessment will indicate (via mail, online, or email) whether you are eligible for grants and loans via mail, online, or email.

If you have not previously completed a Master Student Financial Assistance Agreement (MSFAA), you may be required to do so. You must finish your MSFAA online by creating or logging into your secure NSLSC account.

If you are denied funding or dissatisfied with the approved amount, contact your province or territory’s student financial assistance office. It opens a new window for re-evaluation.

#Step 3: Review and agree to the MSFAA’s terms and conditions

Carefully review your Master Student Financial Aid Agreement (MSFAA). Besides, your MSFAA is a legally enforceable contract. Examine it thoroughly and read the terms and conditions. Before accepting, make sure you fully understand your responsibilities and commitments. Acceptance implies agreement to be bound by the MSFAA terms and conditions.

#Step 4: Submit your loan paperwork

To complete and sign your MSFAA online, you must first register or log in to your National Student Loans Service Centre (NSLSC) account.

#Step 5: Loan disbursement

Finally, wait for the payment to be made. If you provide your financial institution information, your loan will be deposited directly into your financial institution account or forwarded to your school on or after the first day of classes to pay your academic fees (e.g., tuition).

4 Steps to Easy Student Loan Repayment in Canada

Paying off student loans does not have to be a difficult task. You can take several steps to make the process easier and more manageable. Here are four simple repayment steps:

#Step 1: Understand your loan

The first step is understanding your loan. Next, read over the terms and conditions of your loan agreement, so you know what you’re responsible for. This will help you create a repayment plan.

#Step 2: Use the Personal Loan Calculator

Use the calculator to experiment with different repayment scenarios to determine an affordable amount for you. Of course, the faster you repay your loans, the less interest you will have to pay.

#Step 3: Make a budget and stick to it

Creating a budget is key to staying on top of your finances. Knowing how much money you have coming in and going out each month will help you stay accountable for your student loan payments.

#Step 4: Create a repayment plan that works for you

There are several ways to repay your student loans, so find one that best suits your needs.

Final tips for paying your Student Loan Repayment

When repaying your Canada Student Loan, staying on top of your payments is essential. Here are a few final tips to help you with the process:

  • Make a budget and stick to it. This will help you track your expenses and ensure you have enough money to cover your monthly loan payments.
  • Pay more than the minimum amount each month if you can afford it. It will reduce the interest you’ll pay on your loan overall.
  • Keep track of your loan status and account information online. It will help you stay up-to-date on what’s happening with your loan and ensure there are no surprises down the road.
  • Contact Service Canada if you have any questions or concerns about your loan repayment plan.

Frequently Asked Questions

Can I apply for a student loan while studying as an international student in Canada?

Yes, protected individuals may be eligible to apply for federal Canada Student Loans; however, federal student loans are primarily available to Canadian citizens. In addition, international students attending universities supported by a private lender can apply for private loans.

Are these private loans available to Canadians?

Yes! Suppose you are a Canadian citizen and want to check your eligibility for student loans. In that case, you can use our free comparison tool, then apply online.

Will the lender run a credit check?

They could. While most lenders require a credit check, others base their decision on the borrower’s ability to repay the loan balance in the future.

Is a cosigner required for these loans?

There is no requirement for a cosigner; however, you may be offered a lower interest rate if you do have a cosigner.


In conclusion, student loan repayment in Canada is a process that takes time and effort. However, it can be manageable with the right resources. The National Student Loans Service Centre (NSLSC) is an excellent resource for those who need help understanding the repayment process. As well, for those looking for specific information on student loan repayment rates and timelines, the NSLSC website is a great place to start.