Student Lines of Credit

Student lines of credit, offered at banks, provide funding at a lower interest- rate than with credit cards. If students are looking for an additional resource, a line of credit may be an option for them. Many banks offer varying amounts for student lines of credit, and eligibility criteria differ from bank to bank.

What is a student line of credit?
A student line of credit is a personal loan given out by banks to help students with costs during their studies at any accredited post-secondary institution.

Who is eligible for a student line of credit?
The student line of credit is designed for students pursuing post-secondary education at an accredited/recognized post-secondary institution. Usually full-time and part-time students qualify for the line of credit, with part-time students having lower credit line maximums. Some banks even give out lines of credit for students who are studying abroad in non-Canadian institutions.

How does a line of credit work?
Students borrow money from the line of credit that they need to cover their costs while in a post-secondary education. During this time, students usually pay the monthly interest. After students finish their studies, banks usually allow a grace period where students only make interest payments. After the grace period expires, repayment is negotiated with the lending bank and students must start making monthly payments that include part of the principal as well as the interest.

What is a co-signer?
A co-signer is a person who acts as a guarantor for a student (who may have a poor or limited credit history) in case the student is not able to pay off the line of credit. Usually a co-signer is a parent or guardian who co-signs the line of credit so that, if the student is unable to make payments, the co-signer will take over and pay the balances. Most banks require co-signers for undergraduate students, but usually not for graduate students.

How much money can a student qualify for?
It depends on which bank a student chooses to borrow from. Different banks lend out different amounts of money, and their grace periods may differ as well.

What is the difference between a student line of credit and a government student loan?
Please see the chart below for more information for both full-time students and part-time students.

For other questions on lines of credit, feel free to visit the bank that you wish to borrow from, or visit a Financial Aid Advisor at SFAIC.