Student Lines of Credit (Financial Institution)

Many students have opted to request student lines of credit from their local financial institutions. There are many reasons a student may choose a student line of credit over a federal/provincial student loan. There are, however, benefits and drawbacks to requesting this type of credit. Please see below for more information:

Benefits

• Flexibility to borrow what you need and only pay interest on what you borrow.
• In most cases lower interest rates than Canada/Ontario Student loans.
• A high family income, or personal income will not be held against the applicant.
• Easier to make repayments as you can transfer in and out of the line of credit with online applications or web banking.

Drawbacks

• Monthly interest charges are required to be paid at the end of each month even during your studies.
• Interest paid to a financial institution cannot be used as a tax credit on your income tax return vs any interest paid to OSAP.
• A co-signer is often a requirement to be approved for a Student Line of Credit which places them responsible for payments missed by a student.
• A student line of credit will have a set limit when activated which will require a credit application on each request to increase the limit.