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Credit

Credit cards

Use credit cards sparingly. If you don’t have the cash to pay for something, don’t buy it! If you choose to have a credit card:

  • Shop around. Many banks offer student credit cards with special terms geared towards meeting student needs.
  • Pay your full balance each month to avoid interest and the added pressure of accumulating debt.
  • Manage your credit card debt well and repay your debt on time, so you can establish a good credit history.

Student line of credit

A student line of credit is a repayable loan from a banking institution that helps you pay for your post-secondary education. Unlike government student loans, a student line of credit is not based on financial need. You can combine a student line of credit with other forms of financial assistance (bursaries, scholarships and government loans).

Benefits

While each banking institution has its own terms and interest rates, most student lines of credit have these benefits:

  • Interest rates are usually the prime rate of interest plus one per cent, which is less than government loan rates (around prime plus 2.5 per cent) and credit card rates (up to 20 per cent).
  • You can borrow money as you need it, rather than borrowing all the money upfront.
  • You don't have to pay back any principal while you are a full-time student.
  • You pay interest only on the amounts you actually use while you are in school.You begin to repay the loan after you complete your studies and often there is a grace period.
Qualifying

To qualify for a student line of credit you must usually:

  • Be a Canadian citizen or landed immigrant.
  • Be a full-time student enrolled in program leading to a degree or diploma at a recognized post-secondary institution.
  • Have a valid Canadian co-signer (e.g. parent or guardian).
Where to apply

Most major Canadian banks offer a student line of credit: