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Do you know you can apply for a travel loan to Canada regardless of your country of residence?
Applying for a travel loan to Canada might be necessary where your personal finance is not enough to foot your relocation expenses. You can obtain a loan from the Canadian government to cover the cost involved when applying for permanent residency in Canada.
The Canadian government offers a specific program called the Immigration Loans Program (ILP) to assist eligible immigrants with relocation funds that covers their travel costs and other expenses associated with resettlement in their new country of residence. It is through this program that your eligibility for an immigration loan can be ascertained.
The new immigrants must book their travel with the assistance of the International Organization for Migration (IOM) to be eligible for a travel loan.
The Transportation Loan is designated for refugees and some immigrants to Canada, and not for regular tourism purposes. You should check with Immigration, Refugees and Citizenship Canada (IRCC) to see if the ILP applies to you as an intending immigrant.
The IRCC will pay the costs directly to the IOM, but the money is considered a loan that you need to repay after you arrive in Canada.
The duration within which you must repay the loan depends on factors such as the amount involved. It is after the specified repayment period that determines if the loan accrues an interest or not (although, there is usually no interest rate charged before issuing the loan).
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Moreso, your sponsor should be aware of their obligations regarding the sponsorship process, including the Travel Loan.
Documents Required to Apply for a Travel Loan
Depending on the lender, some documents required to assess your eligibility for a travel loan include the following:
1. Identity Card
As an immigrant applying for a travel loan, you are required to present a valid Government-issued Identity card. Your International passport, National ID card, or a Driver’s Licence could cover for identification.
2. Proof of Residency
Any document that shows your current residential address can be presented as proof of residency. Examples include utility bills (such as electricity, water, waste management, cable subscription, etc), bank statements, tenancy agreements, and insurance cards.
3. Proof of Income/Employment
Proof of Income / Employment shows that you are either employed or have a sustainable means of income to repay the loan. Usually, the following document would be required:
i. Current Employment letter
An employment letter by your employee reveals your employment status, your salary, your employer, and your job role.
ii. Salary Payslip
This document confirms your salary for the past 1-3 months.
ii. Income tax
This shows how much tax you pay from your monthly salary.
4. Other documents
You may be required to present other documents such as Bank statements (to reveal your current account balance), Travel documents (to show estimated costs of your travel, the time, and the plan), and a Credit report to assess your creditworthiness and ability to repay loans.
Steps To Apply For a Travel Loan
Although each loan agent has their peculiarities for issuing loans, the following steps apply to the Canadian government.
1. Sponsorship Application
Your Canadian sponsor initiates the application process with IRCC by providing some supporting documents about your eligibility and proof of relationship with you.
2. IRCC Assessment
The IRCC will assess your eligibility to relocate to Canada and your sponsor’s ability to support you financially.
3. Accessibility of the Travel Loan
If your eligibility is confirmed, the IRCC will arrange for a loan to cover your travel costs directly with the airline or travel agency.
4. Repayment
You will be responsible for repaying the Transportation Loan after you arrive in Canada. Usually, the loan does not accrue interest. However, there is a repayment schedule based on the loan amount.
The immigration officer would have to assess your ability to repay an immigration loan before issuance.
Note: The above steps are applicable when applying to IRCC which might differ from other lenders.
Generally, the following steps may imply when applying for a travel loan to fund your Canadian trip:
1. Choose the Lender for your travel plan
Compare the travel loan options offered by banks, credit unions in your country, or family and friends. Check for the interest rates, loan terms, additional charges, and eligibility requirements.
Research online reviews from previous customers about the lender’s reputation and the quality of customer service. This would help you know if such a lender is your best bet for a loan.
2. Provide the necessary Documents
Get the required documents for a travel loan ready before applying. Proper research from customer reviews and testimonials would help you know what is obtainable from a particular lender.
3. Apply for the Loan
You can either apply online or offline. An online loan application would require you to fill out an online form by providing your details, while an offline loan application would require you to visit the branch office for an application.
4. Await the Approval of the Loan
The lender will review your application and creditworthiness within a few business days. The status of your loan application will be communicated to you via phone call, email, SMS, or the portal.
5. Loan Approval and Disbursement
If approved, you would need to read through all the terms and agreement before appending your signature. The conditions might include the date of the loan repayment, the interest rates, and the penalty for defaulting.
Once you agree to the terms and conditions implied in the agreement, the loan amount would be paid out to you.
Conclusion
You can successfully obtain a travel loan to Canada no matter your country of residence if you follow the steps outlined in this article.
It is advisable to weigh the options before taking a travel loan. It is expedient to check the interest rate to know if it’s favourable. More so, borrow an amount you can comfortably repay within a specified loan term.
Have a budget for the travel loan so that you don’t have to spend more than the available funds.
Following the procedures and meeting the eligibility criteria increases your chances of securing a travel loan to Canada.
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