Paying back student debt

From: Financial Consumer Agency of Canada

Make a plan to repay your student debt

Consider the following before paying down your student debt.

Who you need to repay

You may have loans or lines of credit that you need to repay to the government and/or your financial institution.

In some provinces and territories, Canada Student Loans are issued separately by the federal and provincial or territorial governments. This means that you could have more than one loan to pay back.

Verify your contracts to determine where your debt comes from and where you need to repay it.

How much you need to repay

Verify your loan or line of credit contract to figure out the following:

  • the total amount you owe
  • the interest rate that will be applied to your debt
  • how you’ll repay your debt
  • how much you’ll pay
  • how long it will take to pay back your debt

Contact the organization that provided your student loan or line of credit if you don’t have the information listed above.

When you need to start paying

Different repayment rules may apply depending on your type of student loan.

Canada Student Loans

If you have a Canada Student Loan, you’ll have a 6-month non-repayment period after you graduate. During that period, you won’t have to make payments and you won’t be charged interest on your loan.

The 6-month non-repayment period starts after you do one of the following:

  • finish your final school term
  • transfer from full-time to part-time studies
  • leave school or
  • take time off school

Before the 6-month period ends, you’ll have to log in to your National Student Loan Service Centre account to find out your repayment schedule.

Note that you can still make payments at any time after receiving your loan. You don't have to wait until after the 6-month period ends to start repaying.

Find out more about the repayment schedule and options for your Canada Student Loan.

Log in to your National Student Loan Service Centre account to customize your payments.

Provincial student loans

The repayment rules of provincial student loans vary depending on the province or territory where you applied for your loan.

Find out about repayment rules and schedule for student loan programs in your province.

Student lines of credit

If you have a student line of credit through your financial institution, you'll have to pay the interest on the amount of money you borrow while you’re still in school.

After you graduate, many financial institutions give you a 4 to 12-month grace period. During this time, you only have to pay the interest on your line of credit. After this period, you’ll pay back your debt through a repayment schedule agreed upon with your financial institution.

Contact your financial institution to get information about paying back your student line of credit.

If you’re having trouble repaying

If you need help with repaying your Canada Student Loan, you may qualify for the Repayment Assistance Plan (RAP).

Find out more about the Repayment Assistance Plan for your Canada Student Loan.

If you’re having trouble repaying a provincial student loan, contact your student aid office. For repayment assistance with a loan or line of credit provided by your financial institution, contact your branch to determine what your options are.

Understand that by making your payments smaller, it will take you longer to pay back your loan. You’ll end up paying more interest on your loan.

Find the student aid office in your province or territory.

If you consider refinancing or consolidating your student loan, note that there are important disadvantages. 

If you transfer your federal or provincial student loan to a private lender, you will lose any tax deductions on your student loan interest. You won’t qualify for the interest free period while you're in school and will end up paying more interest over time. 

By keeping your student loan with the federal or provincial government, you’ll keep your access to their repayment assistance programs.

Find out how to deduct your student loan interest on your taxes.

How student debt affects your credit score

Student loans and lines of credit form part of your credit history. If you miss or are late with your payments, it can affect your credit score.

Your credit score shows future lenders how risky it can be for them to lend you money. A poor credit score can also affect your ability to get a job, rent an apartment or get credit.

Learn how to order a free copy of your credit report.


Understand that if you file for bankruptcy within seven years of finishing your studies, your Canada Student Loan won’t be discharged. You’ll have to continue paying back your loan.

Learn how bankruptcy affects your Canada Student Loan debts.

Tips to repay your student debt faster

Consider doing the following to help you repay your student debt faster.

Make lump-sum payments

Making lump-sum payments at any time will help you pay down your loan faster. Lump-sum payments will go toward interest first and then to the principal of your loan. The principal is the amount of money you borrowed.

Consider making lump-sum payments while you’re in school or during the 6-month non-repayment period. If you make any payments during these periods, the amount will go toward the principal of your loan.

Paying down the principal reduces the total amount you owe, which means you pay less interest.

Find out about making lump-sum payments on your Canada Student Loan.

Increase the amount of your payments

The amount you pay over and above your minimum payment will go toward the principal of your loan. This decreases your total loan amount, which reduces the amount of interest you’ll have to pay.

Find out about changing your monthly payments on your Canada Student Loan.

Use the Financial Goal Calculator to see how increasing your payments will lower the interest you pay.

Include payments in your budget

Build your student debt payments into your budget and make payments that are larger than the minimum payments. You can also speak with your financial institution about setting up automatic payments.

When planning your budget and automatic payments, make sure you know when your payments are due. Remember that if you have more than one loan or line of credit, you may have more than one payment due date.

Use the Budget Planner to help include student debt payment in your budget.

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