Interest Rates for Canada Student Loans
The interest rate is multiplied by the outstanding principal on your student loan to calculate your interest payments.
The conditions of repayment for your Canada Student Loan are set at the time you enter repayment.
You can select a fixed interest rate or floating (variable) interest rate when it comes time to begin repaying your student loan.
As of October 2009, the interest rate was 4.75% for the floating rate and 7.25% for the fixed rate.
For Canada Student Loans issued on, or after August 1, 1995:
- the fixed interest rate is prime + 5% and;
- the floating rate is prime + 2.5%.
For Canada Student Loans issued prior to August 1, 1995: the annual interest rate is 3.265%.
Full-time students:
- While you are in school full-time, the Government of Canada pays the interest on your federal student loan, as long as you provide confirmation of enrolment to the National Student Loans Service Centre (NSLSC). If you have loans issued prior to August 1, 2000, you must advise the appropriate loan holder (your bank and/or the NSLSC).
- Interest accumulates on your loan principal when you end your full-time studies, including during the six-month grace period. However, you are not obligated to make payments until you have entered into a Consolidated Loan Agreement.
Part-time students:
- While you are in school part-time, interest accumulates on your federal student loan.
- You will not have to start repaying your loan while in study, but you can choose to pay the interest accumulating on your loan during this period.
Tips for Managing Interest Rates
- Check out the Loan Repayment Estimator which helps you estimate the monthly payments you'll need to make to repay your Canada Student Loan or other government student loans.
- Make interest payments as soon as possible. Payments made during the 6-month grace period will go towards paying off the interest that is accumulating during that time.
- Make lump sum payments. This will decrease the total amount of your loan, resulting in less interest charged in the long run.
Click on the links below for more information on student loan payments:
