Tips in Paying Down you Student Loan Quickly

The federal and provincial and territorial governments of Canada provide financial assistance to full-time and part-time students through their student loan programs.

To be eligible for these loans, a student will need to comply with certain basic requirements on citizenship and residence; proof of financial need; and proof of actual enrollment and course load in an accredited school.

And once the student loan application and supporting documents have been approved and the funds have been released, a student will need to ensure that satisfactory grades are attained.

What to keep in mind regarding loan repayment

When the fund for the student loan has been withdrawn by you, you have the obligation to pay this loan after your graduation or when you leave school or exceed the maximum lifetime limit of 340 weeks for full-time studies.

As the loan and interest payment will start on the seventh month after your graduation or when you leave school, it is important that you will regularly advise and submit documents to the government to show proof that you are still enrolled and studying.

Otherwise, interest on the loan will start to accrue from the date of graduation or when you leave school and the loan payments will start to become due after the six-month grace period. The payment period continues until you have paid all the money that you have borrowed.

In the event that you have received a Canada student loan prior to August 1, 2000 and this was cashed through a financial institution, you will need to advise the financial institution that you are continuing in full-time studies to ensure that you do not have to begin repaying the loan.

6 Month Grace Period

During the six-month grace period after graduation or after leaving school, the government will send you a Consolidated Student Loan Agreement that indicates your total loan amount, interest rate, payment schedule, and amortization period (how long the repayment is to be made).

This agreement has to be carefully read, completed, and returned to the government. A signed agreement will allow you to apply for help if you experience financial difficulty in repayment.

A separate repayment plan application can be sought to extend the payment terms.

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