Student Lines of Credit from 5 Major Canadian Banks

Everything you need to know about student lines of credit from the 5 major Canadian banks and how they compare to each other.

Post-secondary education is not cheap, especially if you’re paying for everything yourself. It can be difficult navigating the economic world and the many financial aid options it can provide while you’re studying at school. One common option for students to use to pay for tuition, rent, supplies, and more is a student line of credit.

What is a student line of credit?

A student line of credit is a product offered by financial institutions to help students pay for expenses related to their post-secondary education. These lines of credit are a type of loan that lets you borrow money up to a pre-set limit depending on the bank.

The benefit of student lines of credit is that interest rates are typically lower than government student loans and you only have to pay back the interest amount while you’re working towards graduation. After graduation, each bank offers a grace period in which you will continue only paying back the interest amount. Once this grace period is over, you will then begin to pay back the money you borrowed (the principal) and the interest. A student line of credit can also increase your credit score as long as payments are made on time. But, if you don’t make your payments on time, it can also negatively affect your credit score.

One of the most important things to remember when applying for a student line of credit is to compare the bank’s interest rates because this is the amount of money that you will be repaying monthly while in school. The interest rates for most banks will typically be the Prime rate — the base rate of interest any bank can use — as well as an additional percentage, but remember that interest rates vary from each bank and are subject to change during your line of credit contract.

What is the difference between a student line of credit and a loan?

For a loan, you would have to pay back all the money and interest of the total amount that you received, whereas for a student line of credit you pay back what you’ve spent and interest. For example, if your line of credit is $5,000 and you spend $2,000, you only pay back the $2,000 plus interest. Your student line of credit is a separate account from your chequings and savings accounts, where you can withdraw up to your maximum amount per year. You can access this money with online banking, cheques, and through ATMs and your financial institution.

Every student line of credit is unique for each bank, so we’ve put together a brief comparison between the five major Canadian banks and their student lines of credit for undergraduates to help you with your search.

BMO

BMO’s Student Line of Credit offers students up to $20,000 per year, for up to a maximum of $80,000 over four years.

Interest rate:

Low variable interest rate

Payment plan:

Only pay interest on what you borrow, with no annual or monthly fees. Make interest-only payments while in school and for two years after graduation. After the two years, your repayment of your initial amount begins (pdf).

Eligibility:

To be eligible for a student line of credit, you must be enrolled at an eligible post-secondary school in either a diploma, degree, or certificate program. This program must be at least 12 weeks and is taught on a full-time basis (20 or more hours of instruction per week). You must also be a Canadian citizen or permanent resident.

Required documentation:

• Proof of enrollment
• Government-issued photo ID
• Co-signer is required (someone who can take on the payments if you cannot)
  • co-signer’s government-issued photo ID
  • co-signer’s proof of employment, such as a letter from an employer or recent paystubs
  • co-signer’s recent tax forms

Are you in a post-graduate degree or in a medical or dental program? If so, BMO also has student line of credit options for you! Check out their Professional Student Line of Credit and their Medical or Dental Student Line of Credit.

CIBC

CIBC’s Education Line of Credit offers a range of credit as low as $5,000 and up to $80,000. As a full-time undergraduate student, you could receive up to $20,000 per year, and as a part-time undergraduate student, you could receive $10,000 per year.

Interest rate:

CIBC Prime Rate + 1.00%

Payment plan:

Pay interest only on the amounts you use while you are in school, and for two years after graduation (or six months if you leave your program before graduating).

Eligibility:

To be eligible for a student line of credit, you must be enrolled at a Canadian university, college, or trade school. You must also be a Canadian resident and you have reached the age of majority in your province. Additionally, you haven’t been declined for credit by CIBC in the past six months and you haven’t declared bankruptcy in the past seven years.

Required documentation:

• Proof of enrollment
• Government photo ID
• Co-signer may be required

Are you in a professional graduate degree or specialized health sciences programs? Are you a medical, dental, or optometry student? If so, CIBC also has student line of credit options for you! Check out their CIBC Professional Edge Student Program.

RBC

RBC’s Student Line of Credit offers a range of credit limits, starting at $5,000, based on your program of study.

Interest rates:

RBC Prime Rate + 1.00%

Payment plan:

During your education, you have full access to your credit line. After you graduate, you have two years to start repaying your initial line of credit.

Eligibility:

To be eligible for a student line of credit, you must be enrolled at a Canadian post-secondary educational institute. You must also be a Canadian citizen or a landed immigrant.

Required documentation:

• Proof of enrollment
• An estimate of your education costs (including tuition, supplies, fees, accommodations, food, travel, etc.)
• A list of your financial resources (including RESPs, scholarships/bursaries, government funding, summer employment, etc.)
• Proof that you are a Canadian citizen or landed immigrant
• A co-signer

If you’re in a professional graduate degree, specialized health sciences programs, or are a medical or dental student, then RBC also has student line of credit options for you! Check out their Royal Credit Line for Students in Professional Studies and their Royal Credit Line for Medical and Dental Students.

Scotiabank

Scotiabank’s Personal Line of Credit for Students offers a range of credit limits based on your program of study.

For full-time undergraduate programs, you can receive a minimum credit limit of $1,000 per year and a maximum credit limit of $15,000 per year. The maximum credit limit is $40,000.

For part-time undergraduate programs, you can receive a minimum credit limit of $1,000 per year and a maximum of $7,500 per year. The maximum credit limit is $20,000.

Interest rate:

The interest rate for the personal line of credit for students is calculated for individuals based on your program, degree, if you’re currently employed, etc.

Payment plan:

Make interest-only payments while you’re in school and enjoy a 12-month grace period after graduation. After the grace period, you begin the process of repaying the initial amount borrowed.

Eligibility:

To be eligible for Scotiabank’s Personal Line of Credit for Students, you must be a Canadian citizen or permanent resident enrolled in a certificate, apprenticeship, degree, or diploma program at a Canadian or American post-secondary school. International students enrolled in a Canadian graduate program can apply for a Scotiabank Personal Line of Credit for Students if they have a co-borrower who is a Canadian citizen or permanent resident.

Required documents:

• Proof of enrollment
• Government photo id
• Co-signer may be required

If you’re pursuing a professional designation in a qualifying professional study program (pdf), then you should consider the Scotia Professional Student Plan.

TD Bank

TD Bank offers a Student Line of Credit for full-time and part-time undergraduate students, graduate students, and students in professional degrees.

For undergraduate students, TD Bank offers up to $20,000 per year, with a maximum of $80,000 over four years of study.

Graduate students, depending on their course of study, can receive anywhere from $80,000 to $175,000 over their degree length. If you’re in a professional degree, like dentistry, medicine, or veterinary, you could receive $200,000 to $350,000.

The maximum amount offered for a student line of credit will vary depending on your program.

Interest rates:

The interest rate for a TD Student Line of Credit will vary depending on your program and can range from the TD Prime Rate - 0.25% to the TD Prime Rate + 1.50%. For example, the interest rate for an undergraduate program is TD Prime Rate +1.00%.

Payment plan:

While you are studying in school, you must pay monthly interest-only payments. After your graduation, you will have two years to continue making the interest-only payments and once that time is over, then additional payments are required.

Eligibility:

To be eligible for a student line of credit, you must be enrolled in a full-time or part-time undergraduate, graduate, or Medical, Dental, or Veterinary professional program at an accredited Canadian university or college. International students must have a co-borrower who is a Canadian resident and a TD customer in good standing.

Required documentation:

• For an undergraduate student line of credit, you’ll probably need a co-signer
• Your current address and previous address (if your current address is less than three years old)
• Your annual income and sources
• Your monthly mortgage or rent amount
• Your monthly payments (loans, credit cards, lines of credit)
• Your household expenses (utilities, insurance, property tax, etc.)
• Proof of enrollment at an accredited Canadian university or college

There you have it! A quick guide on what you can expect when looking into student lines of credit! One important factor to keep in mind when choosing your financial institution for your student line of credit is the length of their grace period. The longer the grace period, the more time you have until you must repay your principal amount. This is helpful since you’ll likely spend the first little bit after graduation trying to find job. You won’t want to worry about making bigger payments during this time.