Repay a student loan - How to start
Start repaying 6 months after leaving school
There is a 6-month non-repayment period until you must begin making payments on your Government of Canada student loans. Interest will start to accumulate at the beginning of this 6-month period, so you can make payments if you wish.
The 6-month non-repayment period starts after you:
- finish your final school term
- reduce from full-time to part-time studies
- leave school or take time off school
Paying before the 6-month period ends
You can make payments at any time after receiving your loan, even while studying, by making lump-sum payments. You don't have to wait until after the 6-month period ends. If you pay off your loan in full before you finish school, you will not pay any interest.
Choosing your repayment options
Before the 6-month non-repayment period ends, you will receive a consolidation package in the mail from National Student Loan Service Centre (NSLSC).
You can send back the consolidation package to:
- choose an interest rate option
- change the day of the month the payments are withdrawn
- change the payment frequency
- change the bank account from which payments should be withdrawn
If you do not sign it and send it back, the NSLSC will automatically use the suggested payment plan.
Repayments will begin to be withdrawn automatically from the account in which the loan was deposited or that you indicated in your consolidation package, if you are set up for automatic withdrawals. If you are using another monthly payment method, you will need to make payments each month before your deadline.
Choose an interest rate option
You have 2 interest rate options to choose from:
- floating interest rate: 6.45% (prime rate + 2.5%)
- fixed interest rate: 8.95% (prime rate + 5%)
These rates are subject to change as the prime rate varies and was last updated on December 5, 2018. Please contact the NSLSC to confirm the current rate.
By default, your student loan has a floating interest rate.
At any time, after you enter repayment, you can change to a fixed interest rate.
However , if you switch to a fixed interest rate, you will not be able to change back to a floating rate.
To choose a fixed interest rate in your repayment plan or to switch to a fixed interest rate anytime during your repayment period, contact us.
Choosing between a floating or fixed interest rate will have important consequences on your monthly payment. While a floating interest rate is lower at the beginning, it can go up if the prime lending rate goes up.
Use the Repayment estimator to understand the effect of interest rates on your monthly payments.
If you have a provincial or territorial part to your loan, it might be under a different interest rate, set by your province or territory.
For Canada Student Loans issued before August 1, 1995, the current interest rate is 3.125%.
This rate is updated annually and was last updated on August 1, 2018.
Lump-sum payments after the 6-month non-repayment period
After the 6-month period, you can continue to make lump-sum payments at any time. Lump-sum payments during your repayment period will be applied to the interest on your loan before the principal.
Still studying or in the Canadian Forces
As long as you're in school or a reservist in the Canadian Forces in a designated operation, you do not have to make payments on Canada Student Loans or provincial or territorial student loans.
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