Student loan payoff calculator.

Paying off student loans in Canada

Student debt is a reality for most Canadian graduates. With a solid repayment strategy, you can become debt-free faster than you think.

Student loan types in Canada

• Federal loans: Canada Student Loans (CSL) with prime rate.
• Provincial loans: OSAP (Ontario), StudentAid BC, etc.
• Private loans: bank loans with higher rates.
• Student LOC: student lines of credit with variable rates.

Repayment strategies

Avalanche method: pay minimum on all loans, extra toward highest interest rate.

Snowball method: pay minimum on all loans, extra toward smallest balance for psychological wins.

Income-driven: adjust payments based on income (Repayment Assistance Plan available).

Tax benefits

Interest paid on government student loans is tax-deductible in Canada. Keep your loan statements and claim interest on your tax return. Unused amounts can be carried forward up to 5 years.

Your loan is probably two loans

Almost every Canadian who borrowed through a provincial student aid office holds a single debt made of two separate loans with different owners, different rules and, critically, different interest treatment. Understanding which portion is which is the first step in any repayment plan, and most graduates have never checked.

The federal portion is a Canada Student Loan, owned by the Government of Canada and serviced by the National Student Loans Service Centre. The provincial portion is owned by your province: the Ontario Student Loan half of OSAP, the BC portion of StudentAid BC, and so on.

Whether you see one bill or two depends on whether your province is integrated with the federal system. In an integrated province, the NSLSC collects both halves in one payment and one statement, which is convenient and also why so many borrowers assume they hold one loan on one set of terms. In a non-integrated province you get two bills from two servicers, which is inconvenient and considerably clearer.

Quebec, the Northwest Territories and Nunavut run their own student aid programs outside the Canada Student Loans Program entirely, so borrowers there hold provincial or territorial debt only, on provincial terms.

Log in to the NSLSC and read the balance breakdown before you plan anything. The split between federal and provincial changes what interest you are paying, what relief you can apply for, and which dollar is worth paying down first.

Interest is where the two halves diverge

The federal and provincial portions of the same debt are not charged the same way, and the difference has grown wide enough to change the repayment order.

The federal portion has been permanently interest-free since 1 April 2023. The 2023 federal budget eliminated interest on Canada Student Loans and Canada Apprentice Loans outright: not a temporary pause, and not conditional on income. Every payment you make against the federal half now goes entirely to principal.

The provincial portion is set by each province independently. Several have also eliminated interest on their share; others still charge it, either at a fixed rate or at prime plus a margin. There is no national answer, and any figure you find quoted for “the student loan interest rate in Canada” is describing one province at one moment. Check your own statement.

This produces the most useful single conclusion on this page. If your federal half carries no interest and your provincial half does, then extra payments must be directed at the provincial portion, and in an integrated province, where one payment is split automatically between the two, you have to instruct the servicer to apply a lump sum to a specific loan or it will be allocated for you. Paying down an interest-free loan while an interest-bearing one sits beside it is pure waste, and it is the default behaviour if you do nothing.

The six-month period after you leave school

Repayment does not begin the month you graduate. You get a six-month non-repayment period from the end of your study period before the first payment is due, and it applies whether you graduated, transferred or withdrew.

Two things about it are commonly misunderstood. First, it is not a suspension of the loan: it is a delay of the payment. Second, whether interest accrues during those six months depends on the same federal-versus-provincial split as everything else: no interest accrues on the federal portion because none accrues at all, while a province that charges interest may or may not charge it during the grace period.

You can also start paying voluntarily before the six months are up, and if any part of your debt carries interest that is usually worth doing. Nothing penalises early payment on a government student loan: there is no prepayment charge on any of it, ever.

The Repayment Assistance Plan, in detail

RAP is the most valuable and most under-used feature of Canadian student debt, and it is genuinely more generous than the income-driven plans borrowers in other countries get.

You apply, and the plan reduces your required payment to what the formula treats as affordable given your family income and family size. If that affordable amount is zero, your required payment is zero: while remaining in good standing, with no default, no collections and no credit damage. Approval lasts six months at a time and you reapply; it is not permanent and it is not automatic.

Two further points that matter more than the payment reduction itself:

• Interest is covered, not deferred. Under RAP the government pays any interest your reduced payment does not cover rather than adding it to your balance. This is the structural difference between RAP and a simple deferral: your debt does not quietly grow while you are being helped.
• There is an end point. Continuous participation eventually leads to the remaining balance being cleared, on a horizon measured in years rather than decades. RAP is designed so that a borrower whose income never recovers does not carry the debt indefinitely.

The hard limit is coverage: RAP applies to government student loans only. It does nothing for a student line of credit, a bank loan, a credit card or a family loan. And it works far better applied for early than after missed payments; once a loan is in default it leaves the RAP-eligible system, collections begin, and getting back is much harder than never leaving.

The interest claim is a credit, not a deduction

Interest paid on a government student loan generates a non-refundable tax credit at the lowest federal tax rate, plus a provincial equivalent. It is not subtracted from your income the way an RRSP contribution is, so it is worth the credit rate rather than your marginal rate: a smaller benefit than “deductible” suggests, and a meaningful distinction if you are deciding how hard to attack the loan.

Being non-refundable, it can only reduce tax you actually owe; it cannot create a refund on its own. That is exactly the position most recent graduates are in, which is why the five-year carry-forward matters: if you owe no tax this year, do not claim it. Carry it and claim it once you are earning enough for it to offset real tax.

Only government loans qualify. Interest on a student line of credit, an ordinary bank loan, or money borrowed from a relative generates no credit at all, and it is worth noticing that if you consolidate a government student loan into a line of credit, you permanently forfeit the credit, RAP eligibility and any forgiveness horizon along with it.

The student line of credit is the dangerous one

A student line of credit from a bank looks like the same kind of debt and behaves nothing like it. Every protection attached to government student debt is absent:

• No repayment assistance, no interest relief and no forgiveness of any kind.
• No tax credit on the interest.
• A variable rate that moves with prime, so the cost rises when the economy is weak, which is exactly when a new graduate is most exposed.
• Interest charged from the moment of the first draw, throughout school, with no grace period.

The specific cliff to plan for is the end of the interest-only period. Most student lines of credit let you pay interest only while in school and for a period after graduation, then convert to a term loan with amortising payments. The payment can double or triple on conversion, and it arrives at the point in life when income is least established. Find your conversion date now and build the payment into your budget before it lands, rather than discovering it.

If you hold both kinds of debt, the order is unambiguous: the line of credit first, aggressively, and the government loan afterwards at its minimum; unless the provincial portion carries a comparable rate, in which case compare directly.

What the number means for the decision

This calculator shows you a payoff date and a total interest figure. Both are worth acting on, but not in isolation, because government student debt is the most forgiving debt most people will ever hold and its position in the queue reflects that.

A sensible order of priorities looks like this: clear any credit card balance, capture any employer pension match in full because that is an immediate return nothing else matches, build a small emergency fund so the next unexpected expense does not go back on a card, clear the student line of credit, and only then accelerate the government loan; provincial portion first if it is the only part charging interest.

There is one non-financial argument for paying it off faster than that ordering suggests, and it is legitimate: a government student loan counts in the debt-service ratios a mortgage lender calculates, so a balance can reduce how much house you qualify for even at zero interest. If a purchase is close, clearing the balance buys you borrowing room. Absent that, an interest-free federal loan is close to the cheapest money you will ever have, and there is no prize for retiring it early.