Passage vs Canadian bank loans for international students: full comparison

International students applied for over CAD $4.6 billion in education financing for Canadian studies in 2024 alone, and the single most common question we hear is the same one you're probably here for: should I go through a Canadian bank, or use a lender like Passage?

The honest answer: it depends on whether you can actually get a Canadian bank loan in the first place. Most international students discover, after weeks of paperwork, that they can't. Canadian banks design their student lending products for Canadian citizens and permanent residents, and the few options open to international students almost always require a Canadian cosigner with strong credit. Passage was built specifically to fill the gap that creates.

This guide breaks down both options head-to-head: eligibility, interest rates, repayment terms, speed, and the practical realities of each, so you can make the decision with your eyes open. If you'd rather check what you qualify for first, our eligibility tool takes about two minutes.

The quick answer

For most international students applying from outside Canada, a Canadian bank student loan is technically the cheaper option, if you can secure a Canadian cosigner with strong credit and Canadian permanent residency. If you cannot (which is the case for the majority of international students), Passage is built for your situation: no Canadian cosigner, fixed 11.95% APR, and your loan approval counts as IRCC-accepted proof of funds.

Below is the full comparison.

What is a Canadian bank student loan?

A Canadian bank student loan is typically structured as a student line of credit (SLC) offered by one of the Big Five banks: RBC, TD, BMO, Scotiabank, or CIBC. It works like a revolving credit facility rather than a lump-sum loan. You draw funds as you need them across your study term, and you're only charged interest on the amount you've actually withdrawn.

Standard features include:

• Variable interest rates tied to the bank's prime rate (typically prime plus 0.5 to 2.0%)
• Borrowing limits between CAD $10,000 and CAD $100,000 depending on the program type
• Interest-only payments while you're in school
• Full principal repayment beginning after a 6 to 12 month grace period post-graduation
• Strong consumer protection under Canadian banking law

The catch is big. These products were designed for Canadian residents. To qualify as an international student, you almost always need a Canadian citizen or permanent resident to cosign with you. That cosigner is legally on the hook for the loan if you cannot pay, and they need verifiable Canadian income and a strong credit score (typically 680+).

What is a Passage student loan?

Passage is a Canadian-licensed lender built specifically for international students. We exist because traditional banks were turning away qualified students for one reason: they didn't have a Canadian cosigner.

A Passage loan is a fixed-amount education loan with these features:

• Fixed 11.95% APR for the entire repayment period
• No Canadian cosigner required
• Cash collateral required (typically 25 to 35% of tuition)
• Loan amount sized to cover tuition, GIC, and living expenses
• Loan approval letter accepted by IRCC as proof of funds for your study permit
• Funds disbursed directly to your Canadian bank (for the GIC) and to your college (for tuition)
• Payments reported to Canadian credit bureaus, which helps you build a Canadian credit score while you study

You can check your eligibility for a Passage loan. It takes around two minutes and doesn't affect your credit.

Side-by-side: Passage vs Canadian bank loans

Eligibility: who actually qualifies

This is where most international students hit their first wall.

Canadian bank student loans

To be approved for a Big Five bank student line of credit as an international student, you'll generally need:

• A Canadian cosigner who is a citizen or permanent resident, has a credit score of approximately 680 or higher, and has stable Canadian employment income
• An offer of admission to a Canadian Designated Learning Institution (DLI)
• Proof of enrolment for a program of two years or longer (most banks won't fund shorter programs at competitive rates)
• A Canadian bank account (which most international students don't have until they arrive)
• Sometimes, an in-person appointment at a Canadian branch

For most international applicants applying from India, Nigeria, the Philippines, or anywhere else outside Canada, the cosigner requirement alone disqualifies them. Even students who have a relative in Canada often find that relative doesn't meet the bank's strict income and credit thresholds.

Passage loans

Passage was designed around a different question: can this student succeed in Canada and repay this loan? That's a more useful question for international students because it doesn't depend on whether you happen to know a creditworthy Canadian.

To qualify for a Passage loan, you'll need:

• An offer of admission to a Canadian DLI in a Passage-supported program (skilled trades, healthcare, ECE, or STEM)
• To be applying from a country Passage currently serves
• To meet our internal credit and capacity assessment

You can check your eligibility in two minutes without any commitment.

Interest rates and the real cost difference

Canadian bank student loans look cheaper at first glance, and they often are. But only if you can actually access one. Consider a CAD $35,000 loan repaid over 10 years.

Canadian bank student line of credit (assuming you qualify):

• Rate: Prime + 1.0% = ~6.5% variable (2026 estimate)
• Estimated monthly payment: ~CAD $397
• Total interest paid over 10 years: ~CAD $12,673
• But if Bank of Canada raises rates, your payment goes up

Passage loan:

• Rate: 11.95% fixed
• Estimated monthly payment: ~CAD $501
• Total interest paid over 10 years: ~CAD $25,177
• Your payment never changes for the entire repayment period

Yes, that's a meaningful difference of roughly CAD $12,500 over ten years. But two things matter here. First, the bank loan rate is variable, which means it can rise. A 1% rate increase on a 10-year CAD $35,000 loan adds about CAD $2,100 in interest. Second, and more importantly, most international students cannot access the bank rate at all. Comparing 6.5% to 11.95% only matters if 6.5% is actually available to you.

Use the Passage loan calculator to estimate your specific monthly payment.

Application process and speed

Canadian bank loans

Expect a 4 to 8 week timeline. The typical sequence: gather cosigner documentation, schedule a branch appointment, complete in-person paperwork, wait for credit checks, sign disclosures, and receive funding. Banks will not approve a study line of credit before you've received your Letter of Acceptance from a DLI, and most banks require the cosigner to attend in person.

For students still in their home country, the practical timeline often stretches to 10+ weeks because nothing happens until you can physically book a branch appointment in Canada.

Passage

We aim for a decision within 48 hours of receiving a complete application, and the entire process is online. You can complete the application from your home country, before you've arrived in Canada, before you've opened a Canadian bank account. Once approved, your loan approval letter can be submitted to IRCC immediately as part of your study permit application.

Repayment terms

Both Canadian bank loans and Passage loans offer a grace period: a window after graduation where you don't need to make full principal payments while you find a job.

Canadian bank student lines of credit typically require interest-only payments while you're studying, followed by a 6 to 12 month grace period after graduation, then full principal-and-interest repayment over a term of up to 10 years.

Passage loans typically begin with an interest-accrual period while you study, followed by a 6-month grace period after graduation, then full repayment over 5 to 10 years depending on your loan size and program. The fixed 11.95% APR means your monthly payment is locked in. No surprises if interest rates rise.

Both options report your payment history to Canadian credit bureaus (Equifax Canada and TransUnion Canada), which helps you build a Canadian credit score while you study. That credit score is what makes the rest of your Canadian financial life (renting an apartment, buying a car, getting a regular credit card) significantly easier after graduation.

Other factors worth weighing

Proof of funds for your study permit

IRCC requires international students to prove they can cover first-year tuition plus living expenses (CAD $20,635 minimum for 2026). Both Canadian bank loans and Passage loans are accepted as proof of funds, with one important difference. A Passage loan approval letter can be issued in days from your home country. A Canadian bank loan approval typically can't be obtained until you've physically been to a Canadian branch with your cosigner. For students still finalizing their visa, that timing gap is often the deciding factor.

Customer support that understands your situation

Canadian bank loan officers are excellent at their jobs, but they're often not specialists in the international student journey. They may not be familiar with the nuances of IRCC documentation, GIC providers, or program-specific PGWP eligibility. Every Passage borrower gets access to a licensed Canadian study permit lawyer at no additional cost. That helps when your visa application hits an unexpected question.

Available country coverage

Canadian banks rarely advertise loan products to international students applying from abroad. Passage actively supports students from a growing list of countries including India, Nigeria, the Philippines, and others. If you're applying from a country we don't yet support, our team can point you toward the closest available option.

When a Canadian bank loan is the better choice

If you have a creditworthy Canadian cosigner who is willing to take on the legal obligation of your loan, and you can wait 4 to 8 weeks for approval, a Canadian bank student line of credit is the cheaper option. The interest rate advantage is real. It's also why we built Passage in a specific lane: not to compete with the bank product for students who genuinely qualify for it, but to serve the much larger group of students who don't.

A bank loan is likely the better fit if all of the following are true: you have a Canadian citizen or PR willing to cosign, that cosigner has stable Canadian income and a credit score above 680, you have enough lead time before your program intake to complete the bank's full review process, and you can attend a Canadian branch appointment in person.

When Passage is the better choice

A Passage loan is built for students who fit this much more common profile: you're applying from your home country, you don't have a Canadian cosigner (or your cosigner doesn't meet bank requirements), you need a financing decision quickly to submit your study permit application, you want a fixed interest rate that won't rise, and you want a lender that understands international student logistics, from GIC providers to panel physicians to PGWP eligibility.

If that sounds like your situation, check your eligibility for a Passage loan.

How Passage helps international students

Passage is a Canadian-licensed lender built specifically for international students who don't have a Canadian cosigner, Canadian credit history, or Canadian collateral. We finance tuition and the GIC for students enrolling in PGWP-eligible programs at partner colleges across Canada, primarily in skilled trades, healthcare, early childhood education, and STEM.

What makes us different from a traditional Canadian bank:

• We don't require a Canadian cosigner. Our underwriting is built around your program, your career outlook, and your profile, not whether you happen to know someone in Toronto with good credit.
• We approve loans in 48 hours so you can submit your study permit application without delay.
• Our 11.95% fixed APR doesn't move when interest rates do.
• Every borrower gets free access to a licensed Canadian study permit lawyer.
• We report to Canadian credit bureaus so you build a Canadian credit score from day one.

Check your eligibility for a Passage loan. It takes two minutes and doesn't affect your credit score.

Frequently asked questions

Can I get a Canadian bank student loan without a Canadian cosigner?

Almost never, in practice. A few global banks like HSBC offer international student banking products, but unsecured loans from the Big Five Canadian banks (RBC, TD, BMO, Scotiabank, CIBC) almost always require a Canadian citizen or PR cosigner with strong credit. Passage was built specifically to fill this gap.

Does Passage charge any hidden fees?

No. The 11.95% APR is the all-in fixed rate. There's no application fee, no origination fee, and no prepayment penalty. You can pay your loan off early without extra cost.

Will a Passage loan satisfy IRCC's proof-of-funds requirement?

Yes. Your Passage loan approval letter can be submitted as proof of funds with your study permit application, alongside your GIC if applicable. This is one of the most common reasons students choose Passage over a Canadian bank: the approval letter can be issued before you've left your home country.

Can I switch from a Passage loan to a Canadian bank loan after I arrive in Canada?

Technically yes. After you've built Canadian credit history and potentially found a cosigner, you may qualify to refinance into a lower-rate bank product. Many of our borrowers do exactly this 2 to 3 years into their program. Passage loans have no prepayment penalty, so refinancing is straightforward when it makes sense.

Do Canadian banks offer fixed-rate student loans?

Most Canadian bank student lines of credit are variable-rate, tied to the bank's prime rate. Fixed-rate student loans from the Big Five are rare. Passage offers a fixed 11.95% APR for the full loan term.

What credit score do I need to qualify for a Passage loan?

If you're applying from outside Canada, you almost certainly don't have a Canadian credit score, and you don't need one. Passage underwrites based on your program, your career outlook, your country of origin, and other factors specifically suited to international students.

Can I use a Passage loan to cover living expenses, not just tuition?

Yes. Passage loans can cover tuition, the GIC deposit, and living expenses. Use the loan calculator to size your loan to your full first-year costs.

Are Passage loans available to students from any country?

Passage actively supports students from a growing list of countries. The fastest way to check coverage for your country is the eligibility tool, which will tell you in two minutes.

Take the next step

If you have a creditworthy Canadian cosigner and time to spare, a Canadian bank student line of credit is the cheaper option. Pursue it. If you don't, Passage was built for your situation.

Check your eligibility for a Passage loan. Two minutes, no impact on your credit, decision in 48 hours.

Continue reading

• International student loans where a cosigner isn't mandatory
• How much loan can international students get to study in Canada?
• Credit scores in Canada: A complete guide for international students

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Disclaimer: this article is informational, not financial or legal advice; funding is subject to Passage approval. Interest rate and loan terms are subject to underwriting and may vary by applicant. Canadian bank product details cited reflect publicly available information as of May 2026 and may change.