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Lines of Credit for Medical Students (Scotia is the best option)

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Hey guys,

Finally getting access to my Scotia LoC today 350k @ 2.25%). Planning to wire 150k to IBKR immediately to start investing. Is anybody else on this spicy leverage train with me?

I'm thinking about making a thread or Facebook group for med students trading with their LoC.

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On 6/1/2020 at 6:39 PM, FrannieLydon said:

What is the process for changing? 

On 6/1/2020 at 6:28 PM, FrannieLydon said:

I am wondering if anyone knows anything about transferring your LOC. I am thinking that Scotia has the best offers right now especially to sign up, but I think that in a perfect world I end up with RBC on a more long term basis. Is it possible to start with Scotia and then switch to RBC down the road? Does anyone have any other thoughts on this? 

I just did this this year! It's actually not too tricky. I went from Scotiabank/BNS to RBC. 

First had to meet with the RBC advisor and apply for their package. They ask you which credit cards you will close if you sign up for their package. I said none, and that seemed fine. Got approved, sent proof of enrolment, then had to do some other stuff next to make sure I don't get dinged by fees.

Upgraded BNS account to their Ultimate package, then downgraded the Gold Amex to the normal Amex, but kept the Passport VI. The Ultimate package gets you the annual fee waiver for the Passport VI (+ a safety deposit box if that's useful to you). So long as I keep $5k in the chequing account I don't pay any fees. Alternatively you could downgrade the Passport VI to a more basic visa card with no fee, and switch the bank account to the student package. Then it's totally free, no minimum balance needed but no fancy CCs or safety deposit box. After going through all this, ask your rep to close your LOC and you're good to go. You could also just avoid going through all that and close your whole account with BNS.

After that just had to get a letter confirming my LOC was closed to my RBC rep, then RBC package was set up.

Hope this helps. 

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On 6/1/2020 at 6:28 PM, FrannieLydon said:

I am wondering if anyone knows anything about transferring your LOC. I am thinking that Scotia has the best offers right now especially to sign up, but I think that in a perfect world I end up with RBC on a more long term basis. Is it possible to start with Scotia and then switch to RBC down the road? Does anyone have any other thoughts on this? 

totally possible, and in fact since that can be done is the very thing that is keeping all these LOCs in check. It allows competition to exist which is great for us. Switching takes about 2 days - I have personally done that twice already. 

 

Edited by rmorelan

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4 hours ago, baloneymaloney said:

Hey guys,

Finally getting access to my Scotia LoC today 350k @ 2.25%). Planning to wire 150k to IBKR immediately to start investing. Is anybody else on this spicy leverage train with me?

I'm thinking about making a thread or Facebook group for med students trading with their LoC.

I am planning to do this as well! Definitely make a thread for this. I don't know how willing people will be to share financial information on facebook groups. 

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2 hours ago, Keyboards4Days said:

After going through all this, ask your rep to close your LOC and you're good to go. You could also just avoid going through all that and close your whole account with BNS.

After that just had to get a letter confirming my LOC was closed to my RBC rep, then RBC package was set up.

Thanks that is really helpful! But what do you do if you have a balance on the LOC. Say you have used $100,000 - how do you close that if you do not have the $100,000 to pay back to scotia? Would you have to open the new LOC at RBC first, and essentially use room on the new line to pay off the old line? Or am I missing a step here... 

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2 hours ago, SnowmanTheSWOMEN said:

I don't know if this is a very silly question but is it possible to get mortgage (with LOC) as a medical student? 

We're just milking the system at this point hahahaha

If you want to invest in properties, throw your LoC entirely in a Portfolio margins account and buy $1M worth of REIT shares. My personal favorite would be AVB.

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1 hour ago, baloneymaloney said:

We're just milking the system at this point hahahaha

If you want to invest in properties, throw your LoC entirely in a Portfolio margins account and buy $1M worth of REIT shares. My personal favorite would be AVB.

If you qualify, the only REIT to buy is Centurion, see Centurion.ca. It’s past and future is outstanding due to the sector it is in, apartment buildings. Fantastic management, superlative track record that cannot be beat!

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Hi everyone! i dont know if it helps To know but RBC is now offering what they call a “forever LOC” so we apply once and have it forever at prime-0.25%. A first year med student can apply once and have it for the next 60 years. Basically it means we apply once and it never goes into grace period at all. Less hassle as my sister is a physician and she had to provide so much documents when she converted to the professional line. 

I spoke with a Scotia rep and they couldn’t guarantee this at all. 
 

any thoughts? Also I’m in Vancouver!!

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1 hour ago, pacerpacer1 said:

Hi everyone! i dont know if it helps To know but RBC is now offering what they call a “forever LOC” so we apply once and have it forever at prime-0.25%. A first year med student can apply once and have it for the next 60 years. Basically it means we apply once and it never goes into grace period at all. Less hassle as my sister is a physician and she had to provide so much documents when she converted to the professional line. 

Hi is this on their website somewhere ? I can't seem to find this "forever LOC" option

 

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1 hour ago, ffheynowff said:

Hi is this on their website somewhere ? I can't seem to find this "forever LOC" option

 

I spoke with a medical advisor in RBC and they said this is an offer they have for everyone. To make sure I also asked 3 other medical reps at RBC. I got this email from a rep that pretty much confirms it too.
 

I was going to transfer to Scotiabank but 3 different reps told me different, and my sister did have to re apply after residency and was given a lower amount.. 

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54 minutes ago, FrannieLydon said:

I know that the Scotia rep I spoke with mentioned that once you are out of school your LOC get transferred to a professional LOC at the same rate. 

Yah my sister had to re apply and was a lower amount. Whereas RBC guaranteed never having to re apply, the LOC does not get switched to a professional line. If anyone can confirm Scotia’s? As much as I like Scotias perks, it’s really so hard having to keep changing banks all the time. I guess I would consider Scotia only if i am guaranteed never having to re apply or convert.

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11 hours ago, FrannieLydon said:

Thanks that is really helpful! But what do you do if you have a balance on the LOC. Say you have used $100,000 - how do you close that if you do not have the $100,000 to pay back to scotia? Would you have to open the new LOC at RBC first, and essentially use room on the new line to pay off the old line? Or am I missing a step here... 

I've done this 3 times. Be upfront with your (new) advisor and they will tell you their preferred process as it varies depending on the old and new bank. For example, when switching to RBC from CIBC, my advisor actually wrote a letter indicating I wanted my account closed, drew up a cheque, had me deliver it to my old LOC bank, and then I was good to go. But when I switched to Scotia, I had to provide scans, receipts, and signed documents confirming the account was closed and RBC essentially made me run back-and-forth multiple times in order to give me what I needed to leave them.

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10 hours ago, pacerpacer1 said:

I spoke with a medical advisor in RBC and they said this is an offer they have for everyone. To make sure I also asked 3 other medical reps at RBC. I got this email from a rep that pretty much confirms it too.
 

I was going to transfer to Scotiabank but 3 different reps told me different, and my sister did have to re apply after residency and was given a lower amount.. 

Any bank can change their LOC terms at any time, so i wouldn't put too much weight into RBCs claims, if that is the sole thing that is making you go towards them.

What may have been your sisters experience won't necessarily be your own experience in 6-10 years hah!  

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On 5/23/2020 at 1:38 PM, Peakapuff said:

Haha that's a typical other case of advisors giving different info everywhere :P

RBC advisor only offered me 15 000 points = 350$ travel value while scotia offered me UP TO 65 000 points (I can only meet 55 000) = 550$ travel value + 300$ if new account conditions met. (total 850$) That's also what's advertised on their website so I'm surprise it's not the same number as what your advisor gave you...

If you got 45 000 with RBC that's awesome but I'm a bit sad to see that their reward does not follow a linear curve. 15 000 points = 350 but 45 000 points is not 3x 350$ it's 900$. Unless you only use your points at 15 000 increments at a time.

Are they offering you the platinum or infitine avion? The platinum has no medical insurance  so this is something you will have to pay out of pocket for each trip. The infinite does "Under 65 years of age, 15 days of coverage. For age 65 and over, 3 days of coverage." but this is less than what scotia offers (25 days for under 65 and 10 days for over 65). That's important for me because my mom will turn 65 soon. Most of my family lives on a continent across the world. I've never had a chance to visit them more than once every 10 due to financial reasons which I plan to change now. That being said it'll give me plenty of opportunities to use the free 6 lounges you get with scotia so that they won't exclusively be useful during carm interview season.

By all inclusive I mean the chequing account scotia gives you is the second best they offer (not the best). Which means no global unlimited ATM without charge if the ATM belongs to another bank, no free draft etc. But you still get free cheques, unlimited e-transfer, unlimited debit use etc. (basically anything you would need and actually use on a daily basis). I was a bit bummed about the ATM but realistically I use cards 99.99% of the time. lol

I am neither with RBC nor scotia! I currently bank with TD. The 325k they offer instead of the 350k doesn't bother me but their credit card can't compete.

Regardless of which bank you go with just make sure you go over the conditions to redeem the points to make sure you will be able to meet them. I honestly think it comes down to personal preference and how you see yourself using the perks. 6 free lounges is pretty useless if you see yourself using it once in the next 10 years :P Does the majority of your purchases go towards food (5x points with scotia) or other stuff? (better point/money ratio for rbc). Do you shop on amazon.com/other foreign currency website often or travel enough to benefit from the no foreign exchange fee? Do you usually pay for your travel insurance? How much? Are there any other family members who could benefit from your CC medical insurance?

Hope this was somewhat helpful! :) 

Edit: the advisor I've been speaking with at scotia is kyu.tompkins@scotiabank.com. He's been great, knows his stuff and very friendly. He's the one in charge of Ottawa. I'm sure he'll be happy to answer your questions and redirect you to the right person based on your university though. 

 

Highly agreed. I reached out to Kyu as per your suggestion for uOttawa and he was quite good. :lol:

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When is the best time to get the LOC? Also what are we thinking is better RBC or Scotia bank.  I don’t know much about banking so is it important to have a forever LOC? 
 

thanks!!

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2 hours ago, MDLD said:

When is the best time to get the LOC? Also what are we thinking is better RBC or Scotia bank.  I don’t know much about banking so is it important to have a forever LOC? 
 

thanks!!

Not sure there is a perfect time - most people do get it prior to the first tuition payment date. 

Always hard determining which of those is "better" particularly as there is local variations - the base terms of the LOCs are very similar. Personally I found having a banker you can work with to be the bigger tie breaker in the end. The really important thing is to be getting the prime -0.25% rate. 

"Forever LOC" - that is the wrong mindset I would say - you have to be willing to move if suddenly one bank doesn't keep up with the current competitive terms. Banks can change the rules at any time - and have actually quite a bit over the past several years (today's LOC looks a lot different than one from 10 years ago in many ways). Your only defense is that competition is in pay and you can always move. That being said I found the LOC time to be one where people explore the bank they may stay with to see if it works (for instance I have been with my banker now after switching banks twice for about 10 years - almost all of my training at this point because we have a good professional relationship). 

 

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Question on paying interest on a LOC!

Is there a best case scenario between for instance, RBC where you have to pay the minimum interest each month vs Scotiabank where you technically don't need to pay off any interest until you are done school?

If you wait until the end of schooling to pay off any interest with Scotiabank, that interest will ACCUMULATE each month and would be astronomical if you didn't start paying anything off until 10 plus years of schooling. However, if you are with RBC and need to make a minimum interest payment and end up dipping into the LOC to pay that off doesn't that mean paying off with money that will just accumulate more interest?

Are they both basically the same situation if you don't have external money to pay the LOC off for awhile? 

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On 6/2/2020 at 2:26 PM, FingersCrossedPls said:

Hey I have a quick question -- I am looking into getting my LOC from CIBC since the majority of my banking is with them. The problem is that the advisor is telling me that you only have access to 1/4 of the funds every year. For example, if I take a 200K LOC then I get access to 50K every year. Is this normal? It doesn't make sense to me since tuition changes, housing changes, and I am only paying for the amount that I use in the first place. Do other banks do this? 

Thank you!

I would get your advisor to double check. My advisor initially said the same thing but then re-clarified that as of last year, there is no "limited" access to the LOC. You should have access to the 350k upfront if that is really important to you. Another mistake my advisor made was that you can get a minimum of a 10,000 credit limit on the credit card which is great if you plan on paying off most bills through your credit card initially to gain points. I'm thinking of staying with CIBC.

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10 minutes ago, Speculator said:

Question on paying interest on a LOC!

Is there a best case scenario between for instance, RBC where you have to pay the minimum interest each month vs Scotiabank where you technically don't need to pay off any interest until you are done school?

If you wait until the end of schooling to pay off any interest with Scotiabank, that interest will ACCUMULATE each month and would be astronomical if you didn't start paying anything off until 10 plus years of schooling. However, if you are with RBC and need to make a minimum interest payment and end up dipping into the LOC to pay that off doesn't that mean paying off with money that will just accumulate more interest?

Are they both basically the same situation if you don't have external money to pay the LOC off for awhile? 

I believe so. The difference is most likely psychological ie if someone has some initial savings they can use that to pay off the interest monthly (for RBC) until they exhaust that before dipping into the LOC to pay for the interest vs use that initially to pay for expenses until they exhaust the savings (for Scotia) before starting on the LOC. In the end it'd be the same! Right?? 

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So when I emailed RBC I was told the following information... 

 

At RBC we offer  medical student line of credit up to $225000 limit, and there is no grace period to pay off the principal after graduation.

On their website it says 350 K limit and that there is a grace period so im hella confused. 

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