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Education loan in Canada for homeowners 

Whether you’re a parent supporting your children’s post-secondary career or a working professional who wants to further their education, looking for a financing solution to pay for tuition may be on your mind.  

Despite the cost, education is an important and worthwhile investment since formal training provides access to an opportunity for rapid professional growth. Homeowners looking for an education loan or additional financing can find it through their home equity and access it with Alpine Credits’ help.  

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What is an education loan? 

Education loans, also known as student loans, are similar to other kinds of loans. They have their name because of the purpose they serve, which is to provide additional financing for your tuition and other schooling needs.  

Students and parents commonly use education loans to pay for tuition. You can find student loans from government programs, major financial institutions, or alternative lenders. Accessing each one has its unique requirements, but all can contribute to helping you achieve your educational goals for your child or for yourself.

How does an education loan work? 

You have to apply to a lender that provides educational financing. Since you can choose from the government, the bank, or an alternative lender, the requirements and the amount you receive will be different. 

Applying for federal and provincial loans is one of the more accessible forms of educational financing, especially if you’re a student who has not built a credit profile yet. However, the amount you get depends on your living situation, and those with financial support from parents or guardians may not qualify for as much as someone who does not. 

The banks are more likely to offer student lines of credit rather than student loans. Lines of credit are helpful if you’re not sure how much you or your child will need. They usually have higher credit limits than regular credit cards, and some banks will allow you to hold off paying the balance until after finishing school. Instead, you focus on repaying the interest. 

Another source of education loans is alternative lenders. From alternative lenders, you can find financing solutions like home equity loans that allow you to access your equity as a lump sum. Home equity loans have potentially high values for comparatively lower interest rates than credit cards. They also have fewer eligibility requirements, and the criteria you need to meet is that you own your home.   

Overall, education loans work simply. After you apply, you’ll receive the funding from the lender, provided that you meet their criteria. Once you have the loan, you can use it right away for your child’s tuition or yours.

Why apply for Canada student loans? 

For some Canadians, an education loan is their only access to student financial assistance. However, education is a valuable investment, allowing your children to learn valuable skills to prepare them for the future. While managing a loan requires diligence, the outcome of having a higher education degree can be worth it.  

Tuition costs have steadily risen in the previous years, along with accommodation and transportation costs. Education loans can support families to pay for the tuition, housing, transportation, and other post-secondary study costs. 

Pros of an education loan

Studying to further your education or supporting your child’s schooling is an exciting journey, even if it requires student loans. Loans can provide several benefits.  

  • Ability to focus on full-time studies—if you support your child with student loans, they don’t have to work during the school year. That allows them to commit to more studying, which may lead to them completing their studies sooner rather than later.  
  • Simple qualification criteria—for the most part, you can get an education loan as long as you or your child is enrolled. You may have to provide identification and proof of enrollment for some lenders. 
  • Flexible usage—education loans aren’t limited to tuition fees. They can be used for housing if your child moves away or for bus card fare. Even though lenders don’t track how you or your child use the money, the best practice is to use it strictly for school-related expenses.  
  • Credit building after repayment—traditional lenders report to credit bureaus. If your loan is from a traditional financial institution or the government, you can demonstrate your creditworthiness and improve your credit profile by repaying your student loan consistently. 
  • Upgrade education level—you can learn new skills or improve your existing ones by getting a Master’s degree or an extra certification. By doing so, you build credibility in the industry you’re in or start on a new career path.  
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Young couple working through a loan application.

Cons of an education loan

Be sure to examine your financial situation before applying for an education loan. While it can help you further your education or build your children’s future, prepare yourself by being informed. 

  • Credit score effects—to ensure that your credit score does not change drastically, managing your payments consistently is important.  
  • Possible long repayment phase—the length it takes to fully repay traditional student loans can take several years. Meanwhile, home equity loans have shorter repayment terms, allowing you to be loan-free in a shorter timeframe.     
  • Potentially expensive—interest rates are different for each lender, with potentially high or variable rates. Because of this, home equity loans are an appealing option to homeowners because they have lower fixed interest rates compared to private student loans.  

Types of education funding 

Formal, specialized education can cost several thousands of dollars in Canada. However, you have different options for supporting your educational endeavours, which you can combine to help you achieve your goal.  

  • Scholarships—for those who have grades that exceed expectations, some schools may provide opportunities to receive partial or complete support in their studies. Students who achieve scholarships do not have to pay for some of their classes.  
  • Canada student grants—unlike scholarships, grants are a type of financial aid usually given to those who fall into specific demographics, like students with disabilities.  
  • Student line of credit—like a credit card, you can charge expenses to it and repay it monthly. Interest accumulates in real time but only on the amount you borrow, unlike student loans from the government, where interest is postponed until six months after being out of school.  
  • Personal savings—you can set aside a part of your budget to go exclusively into your child’s schooling costs. The money you save can act as supplementary to a loan. Most parents contribute to an RESP account until their child turns 18.   
  • Federal student loans—one of the most common sources of educational financing is student loans from the federal government, found through the National Student Loans Service Centre (NSLSC). They give them out to eligible students, with the amount varying between each person.  
  • Provincial student loans—each province and territory has its own student aid programs for people attending universities within, such as StudentAid BC (SABC) or Ontario Student Assistance Program (OSAP). They are separate from federal programs, so both federal and provincial can fund your or your child’s studies simultaneously. 

Alternative lenders for education loans 

Like other types of loans, educational financing also has alternatives to accommodate those with specific financial situations.  

  • Private student loans—you can find a private student loan for your children from banks, credit unions, and alternative lenders, but they will potentially consider your credit score and income history.  
  • Home equity loans—if you’re a homeowner, you can take advantage of your most valuable asset. Loans from your home equity value can be significantly higher than scholarships or student loans with eligibility criteria that are easier to reach, with relatively lower interest rates than credit cards and unsecured personal loans.

See how Alpine Credits compares

There are several ways you can finance a post-secondary education. See how other loan options compare to a personal education loan from Alpine Credits.

RESP

RESP

Nearly 2 out of 3 students say they do not have a Registered Education Savings Plan (RESP).

Scholarship

Scholarships and grants

While these are great options, they are difficult to come by, and may be subject to change, and are considered taxable income.

personal

Student line of credit

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loan chart monthly payments
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Canada student loans from Alpine Credits 

Whether you need the money for your personal education or your child’s, home equity loans from Alpine Credits are available to provide the funds.  

  1. Apply online—the application only takes a few minutes to complete. You only need to provide your home appraisal value and a few details.  
  2. Get approved—your application can be processed within a few days, which keeps the wait time shorter than traditional lenders. 
  3. Pay tuition fees and other schooling costs—afterwards, the money will be deposited into your bank account. You can use it as soon as it’s time to pay the balances from your educational institution.  

Education loans from alternative lenders can be a reasonable option for those who require more financial support than what traditional lenders can give. If you have at least 25% home equity, you’ll be eligible for a home equity loan with us. The more equity you have, the more the loan can be.  

Alpine Credits offers a simplified loan process that is accessible to any homeowner in Canada. Regardless of your credit score, income, or education needs, a home equity loan can fulfill them. Traditional student loans have requirements that change the outcome of your eligible loan amount, but home equity loans only rely on how much property equity you have.

Approved stamp

Own your home? You’re approved.

All you need to qualify for a loan is to own your home (or other real estate). Traditional banks look at factors such as your age, income, and credit history to approve you for a loan. At Alpine Credits, we focus on the amount of equity you have in your home or other real estate properties. We make the process as quick and easy as possible.

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Frequently asked questions

Canadian residents and citizens who demonstrate financial need are eligible for student loans. If you’re over 22 years old, you may undergo a credit check when you apply for a student loan for the first time.  

Part-time and full-time students are eligible for student loans, but you must declare which category you fall under. If you’re part-time, you must enroll in 20-59% of a full course load; if you’re studying full-time, you must register in at least 60% of a full load.  

For home equity loans, the only qualification you need to meet is that you’re a homeowner with sufficient equity. If you’re a Canadian homeowner who owns at least 25% of your home, you’re eligible for approval.  

The exact amount depends on your financial situation. In your application, student loan lenders determine how much you’re qualified for depending on where you live and how many courses your child will study. Typically, students receive not more than $10,000 a semester. If your children need more student financing, consider applying for a home equity loan, which gives you access to more money. 

Education loans can be used for any school-related purpose, like transportation, living expenses, books, or materials, not just tuition. If a loan gives you access to higher education that allows you to earn more, it can be worth it.

How you take out a loan can be done differently, depending on what kind of education loan you decide on. Federal and provincial governments provide traditional financial assistance programs, while major financial institutions offer private student loans. Alpine Credits offers home equity loans to homeowners who need the tuition, and you can easily apply online on our website.  

A traditional education loan does not require collateral, but you must provide your home as security in a home equity loan. With Alpine Credits, you must have at least 25% home equity to be eligible. The higher your equity, the bigger your loan can be.

**The above chart entitled “Monthly Loan Payments on $35,000” is for discussion purposes only. The graph is intended to illustrate various monthly payments associated with different product offerings to the reader. Please see below for the unique terms and conditions related to each offering. Final rates and payments for all loans in question are subject to change and vary based on each individual’s situation.
Bank Loans: $35,000 interest-only loan with fixed rate prime (2.95%) + 3% / monthly payment. Two-year term in which 100% of principal is owed at the end of the term. Other fees (appraisal/legal) may apply.
Alpine Credits 1st Mortgage: $40,500 (net $35,000) interest-only loan with 5.75% interest rate in year one and prime + 4.00% in year two. Two-year term in which 100% of principal is owed at the end of the term. Monthly payment and APR associated closing costs (legal fees, appraisal, brokerage fees).
Alpine Credits 2nd Mortgage: $40,500 (net $35,000) interest-only loan with 8.75% interest rate in year one and prime + 6.05% in year two. Two-year term in which 100% of principal is owed at the end of the term. Monthly payment and APR associated closing costs (legal fees, appraisal, brokerage fees).
Credit Cards: $35,000 loan paid off in 5 year & monthly PMT. 19.99% interest rate & fee of primary and secondary user ($99 + 30$ = $129 Yearly).
Online Loan 1: $35,000 loan paid off in 46 Months/Bi-weekly PMT with a 26.90% interest rate. Loan details have been taken directly from the online lending company’s website. Other fees may apply.
Online Loan 2: $35,000 loan paid off in 4 Years/Bi-weekly PMT. Loan details have been taken directly from the online lending company’s website. Other fees may apply.