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finallymed2018

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  1. We might have talked to the same advisor seeing as I went with the same approach Thanks for the input. I think you may be right. Either way, I am going to call Scotiabank to make sure I can make those monthly interest payments if I want to. Sorry for the mix-up; just goes to show how far my Grade 9 econ class goes...haha.
  2. Hi guys. Just wanted to add my 2 cents! I have been a lurker on this thread for a long time (probably because I'm super frugal with my money) and I see that a lot of people in this forum are debating between the Scotia LOC and the RBC LOC. I have been leaning towards Scotia for a long time but I just spoke with an advisor from RBC who clarified the following: Yes, the perks of Scotiabank's credit cards and no mandatory monthly LOC payment seems very attractive at first. However, what many students don't account for is compound interest. Since Scotiabank adds your monthly interest to the principal borrowed amount at the end of every month, your interest is being compounded. Let's say that both banks are offering you interest at prime - 0.25 calculated daily with prime being 3.45: $10000 * (3.45%-0.25%)/365*30 = $26.30 With Scotiabank, you are borrowing $10000 in September to pay for your school tuition. At the end of September, your balance becomes $10026.30. At the end of October, your balance becomes 10026.30 + 27.25 = $10053.55. At the end of November, it is $10079.99, and by Christmas, your balance is: $10,107.36. You have accumulated $107.36 interest. Now with RBC, you are also borrowing $10000 in September to pay for your school tuition. However, you are required to pay your interest at the end of every month. Thus, at the end of September, you must pay $26.30. This means that your principal borrowed balance REMAINS at $10,000. At the end of October, you pay an interest of $27.18. November, you again pay $26.30, and December, you pay $27.18. For the four months, you have paid a total of $106.96 in interest. This might seem minimal, but over 4 years of MD + 2-5 years of residency... (Let's go with $100,000 for 6 years) With compound interest (Scotia): you will be paying at total of $ 121,166.03 ($21,166.03 in interest over 6 years). With no compound interest but monthly payments (RBC), you will be paying a total of $119200.00 ($19,200 in interest over 6 years). Note that it will may take 10...20 years until your line of credit is fully paid off. Maybe I'm just overthinking (maybe you can save just as much with the credit card perks...) but I just wanted to share my knowledge with the rest of you because reading some of your comments these past few months have been very helpful. Thanks for reading : ) PS: If someone can confirm this is true, that would be great and would really help me pick a suitable institution!
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