Guest AhhhNice Posted June 20, 2006 Report Share Posted June 20, 2006 I'm wondering if anyone has any informed opinions on who to get a line of credit with, RBC, CIBC, National Bank (via MD management). It would be great if someone can suggest another thread that might cover the same info. I'm mostly concerned with things like repayment terms, credit limits, any horror stories dealing the banks. A/N Link to comment Share on other sites More sharing options...
Guest aneliz Posted June 20, 2006 Report Share Posted June 20, 2006 I don't know of anyone that has had any 'horror' stories with any of the major banks... basically they are all good... and the terms are all pretty much identical. I would suggest that you set up a few appointments with different banks and go talk to them. Find out which one YOU feel most comfortable with... because it is ultimately about dealing with your account manager and whether you find them to be nice to deal with... You can also check out some of the threads in the med school 101 forum for more on LOC's. Link to comment Share on other sites More sharing options...
Guest Lurkergonepublic Posted June 20, 2006 Report Share Posted June 20, 2006 I made a choice largely on what bank's represenative was easy to deal with, accomodating, and seemed to know what they were doing (some of them were surprisingly clueless, and others are stubborn about pushing terms you know you don't need to stand for). In the world of automation if you have a peson you can work with and who will actually act as though they want to encourage your business with them, then you've got something most people won't have. And for me the fact that there were only 7 bank machines in all of Calgary where I could make a deposit in the National bank (and none of them near me) was the main reason I didn't chose them. With similar plans I think it mostly comes down to convenience. Link to comment Share on other sites More sharing options...
Guest Steve MD09 Posted June 20, 2006 Report Share Posted June 20, 2006 People around here have mentioned that RBC may reassess and raise your interest rate when you enter repayment, although Scotia and NB remain at prime. Otherwise, convenience and customer service are probably the most important issues for most people, since the repayment terms and credit limits are very similar. I personally wanted to stay with my own bank rather than switch, and the deal they offered was more or less the same as anywhere else. There are a few things that you may or may not think are important. Some banks let you make free transactions directly out of the LOC (e.g. Scotiabank, and possibly National Bank), whereas others give you a separate chequing account with a couple of monthly transfers (e.g. RBC, I think). If you have a separate chequing account, you have to estimate how much money you'll need for the next couple of weeks and transfer that to your chequing account. I think that's a bit of an inconvenience, and also, you're paying interest on that money sitting in your chequing account (probably no more than a dollar or two per month, but it adds up). Another issue you might want to consider is whether the bank offers a banking specialist. I think RBC has medical student specialists that presumably know about your typical banking needs. Scotiabank sets you up with a small business account manager, who has some knowledge about professional students, and can also be a useful contact after you graduate and start your practice. You deal with your National Bank plan through your MD Management representative, who should be a useful contact as well. I'm not sure about the other banks. Location of ATMs and branches is probably a fairly important issue for most people. NB doesn't have too many locations in most cities, although they supposedly give you free access to The Exchange network of ATMs, which is more widespread. The other major banks shouldn't be too hard to find, although you might want to ensure there are some conveniently located branches. Link to comment Share on other sites More sharing options...
Guest biomedengr Posted June 24, 2006 Report Share Posted June 24, 2006 Hi guys, I met with RBC yesterday to figure out how much money I can get. I have a bunch of outstanding bank loans and gov't student loans from my undergrad and masters. The bank rep took these outstanding loans into account and took that value off the max $150,000....so now I'm getting a fair bit less than $150K.... I kinda expected them to take my other bank loans into account, but not my gov't student loans. Did anyone else come across this, where they weren't granted the full $150K?? Thanks. :\ Link to comment Share on other sites More sharing options...
Guest Kenola Posted June 25, 2006 Report Share Posted June 25, 2006 Hi there, I was able to secure the full $150,000 LOC from Royal Bank while maintaing my prior $18,000 LOC and a Visa with a $22,000 limit on it. I had about $7000 balance on the prior LOC and a $0 balance on the Visa. I was expecting my Medical LOC to be reduced to reflect my prior Visa and LOC, but it did not even enter into the discussion. Granted, however, that I was working for many years prior to entering med school and had a clean credit history, AND there was only $7000 left outstanding. However, again, I still felt that they would take a look at the $40000 unsecured credit potential and would reduce the Medical LOC appropriately. The fact that they did not made me smile, and probably made them smile too considering the potential interest they stand to gain! God I hope I don't have to use it all! :-) I hope that is of some assistance. Kenola Link to comment Share on other sites More sharing options...
Guest UWOMED2005 Posted June 26, 2006 Report Share Posted June 26, 2006 IMHO, MD Management/National Bank, RBC, Scotiabank and BMO are all worth looking at. Main point for LOCs: get prime. And make sure you're only paying prime in residency!! Link to comment Share on other sites More sharing options...
Prime Posted July 9, 2007 Report Share Posted July 9, 2007 People around here have mentioned that RBC may reassess and raise your interest rate when you enter repayment, although Scotia and NB remain at prime. Otherwise, convenience and customer service are probably the most important issues for most people, since the repayment terms and credit limits are very similar. I personally wanted to stay with my own bank rather than switch, and the deal they offered was more or less the same as anywhere else. There are a few things that you may or may not think are important. Some banks let you make free transactions directly out of the LOC (e.g. Scotiabank, and possibly National Bank), whereas others give you a separate chequing account with a couple of monthly transfers (e.g. RBC, I think). If you have a separate chequing account, you have to estimate how much money you'll need for the next couple of weeks and transfer that to your chequing account. I think that's a bit of an inconvenience, and also, you're paying interest on that money sitting in your chequing account (probably no more than a dollar or two per month, but it adds up). Another issue you might want to consider is whether the bank offers a banking specialist. I think RBC has medical student specialists that presumably know about your typical banking needs. Scotiabank sets you up with a small business account manager, who has some knowledge about professional students, and can also be a useful contact after you graduate and start your practice. You deal with your National Bank plan through your MD Management representative, who should be a useful contact as well. I'm not sure about the other banks. Location of ATMs and branches is probably a fairly important issue for most people. NB doesn't have too many locations in most cities, although they supposedly give you free access to The Exchange network of ATMs, which is more widespread. The other major banks shouldn't be too hard to find, although you might want to ensure there are some conveniently located branches. It's best to have a representative who knows exactly what they're doing and what they're talking about. I was informed by a medical specialist that RBC will keep your LOC at prime once you finish residency and enter repayment. Link to comment Share on other sites More sharing options...
The Bunny Posted July 12, 2007 Report Share Posted July 12, 2007 This is a really dumb question. I know I should know this but how is interest applied to a LOC. Like if my rate were prime (~6.25%) is that 6.25 annualy or monthly and how is it compounded. Thanks Link to comment Share on other sites More sharing options...
Kuantum Posted July 12, 2007 Report Share Posted July 12, 2007 at scotia, i believe it is calculated and compounded monthly Link to comment Share on other sites More sharing options...
The Bunny Posted July 12, 2007 Report Share Posted July 12, 2007 does that mean they charge you 6.25% every month? Link to comment Share on other sites More sharing options...
Kuantum Posted July 12, 2007 Report Share Posted July 12, 2007 yea it does Link to comment Share on other sites More sharing options...
The Bunny Posted July 12, 2007 Report Share Posted July 12, 2007 thanks a lot! Link to comment Share on other sites More sharing options...
NLengr Posted July 12, 2007 Report Share Posted July 12, 2007 6.25% is the annual rate. They don't charge 6.25% interest on a balance every month. They charge 6.25% over the whole year, but they compound it monthly. I believe anyway. I'm not a finance guy. Directly from RBC website: Interest Rates Royal Bank's posted interest rates for loans are subject to change without prior notice. We will charge you interest on amounts you owe under your Royal Credit Line at a rate of our Prime Rate plus a 'premium'. Our prime rate is the annual rate of interest announced from time to time by us as a reference rate then in effect for determining interest rates on Canadian dollar commercial loans in Canada. Our prime rate is posted at all of our branches and on our web site. When you submit this application, one of our Lending Specialists will call you within two business days to discuss the 'premium' amount with you. Upon acceptance and endorsement by Royal Bank, this 'premium' will be guaranteed during a period of up to 30 days between the date your application is accepted or endorsed and the date you sign your loan agreement. Link to comment Share on other sites More sharing options...
SSudS Posted July 12, 2007 Report Share Posted July 12, 2007 Dredging up this from my engineering economics class, an annual interest rate compounded monthly can be calculated in the following manner, where i is the interest rate as a decimal. monthly payment = outstanding balance x 1+(i/12) In the end, if you had $100 outstanding, you would pay a little bit more than $6.25 in interest by the end of the year, if you did not make any payments at all (because the interest gets calculated on the interest of the previous month). Link to comment Share on other sites More sharing options...
AMmd Posted July 12, 2007 Report Share Posted July 12, 2007 thanks a lot! you should check out Desjardins... last time i went they had pretty good deals for docs or pharmacists... Link to comment Share on other sites More sharing options...
BMO guy Posted July 13, 2007 Report Share Posted July 13, 2007 Bunny: Interest rates are calculated on a monthly basis, what ever your balance is at the end of the month (or whatever your payment cycle is) is what interest is charged. The 6.25% or prime is an annual interest rate but is broken down to a monthly basis since each month will likely have a different balance in which interest is calculated upon. Link to comment Share on other sites More sharing options...
up doc Posted July 23, 2007 Report Share Posted July 23, 2007 For example, If you withdrew $10,000 off your credit line at the start of the month, it would roughly cost $52 a month interest. Be weary of the snowball effect. 10,000 the first month will be 10,052 the second month and so on! LOC's are evil, but necessary. Cheers Link to comment Share on other sites More sharing options...
sars Posted August 16, 2007 Report Share Posted August 16, 2007 When are you eligible to apply for an LOC? When starting med school or when starting residency? Do you need to pay monthly interest or is the interest added to your LOC? Link to comment Share on other sites More sharing options...
EESH Posted August 16, 2007 Report Share Posted August 16, 2007 When are you eligible to apply for an LOC? When starting med school or when starting residency? Do you need to pay monthly interest or is the interest added to your LOC? You can apply as soon as you get accepted into med school. You pay the annual interest rate during school (which is prime), and it's compounded monthly. The interest payment is basically taken from the balance of your LOC. Link to comment Share on other sites More sharing options...
Satsuma Posted August 17, 2007 Report Share Posted August 17, 2007 It's best to have a representative who knows exactly what they're doing and what they're talking about. I was informed by a medical specialist that RBC will keep your LOC at prime once you finish residency and enter repayment. I think if you read the fine print it says that the interest rate may be reassessed after you graduate. And I think it was true for at least one other bank I looked into (MDM?). Basically, when I asked about it, the rep said the rate will depend on so many factors, that while it is highly likely it will remain at prime, there is no 100% guarantee...depends on your credit history on graduation along with various other ecomomic factors that I don`t care to understand. I wouldn`t worry too much about the rate after you are done. If the market stays the way it is, another bank will be happy to take you on at prime, so you can just transfer your LOC. Link to comment Share on other sites More sharing options...
EESH Posted August 17, 2007 Report Share Posted August 17, 2007 I think if you read the fine print it says that the interest rate may be reassessed after you graduate. And I think it was true for at least one other bank I looked into (MDM?). Basically, when I asked about it, the rep said the rate will depend on so many factors, that while it is highly likely it will remain at prime, there is no 100% guarantee...depends on your credit history on graduation along with various other ecomomic factors that I don`t care to understand. I wouldn`t worry too much about the rate after you are done. If the market stays the way it is, another bank will be happy to take you on at prime, so you can just transfer your LOC. Scotia told me it would stay at prime after residency, and it's in their best interest to keep it at prime too (keep the customer happy, especially when they start making money). Link to comment Share on other sites More sharing options...
NLengr Posted August 17, 2007 Report Share Posted August 17, 2007 The thing is, if one bank decides that they are gonna boost interest rates after residency, the other 4 major banks are more then happy to take over the debt at a lower interest rate. They all keep each other in check. Link to comment Share on other sites More sharing options...
BlackJack Posted August 17, 2007 Report Share Posted August 17, 2007 The best thing is to completely avoid getting an LOC at all. In the long run you're paying far more than they're lending you. So if you can avoid it, do so. There are so many students who use the LOC like its free money, buying fancy cars, and fancy sound systems for those fancy cars. Then they gotta py it all back plus interest. Sure, they think they'll be making a lot of money, but there are two factors that they aren't thinking about: 1. If you go into family, peds, or psych, you're not going to be making a fortune, so you'll be in debt for a long time. 2. If you instead waited until you had liquid assets instead of using your LOC, you could buy a fancier car with a fancier sound system. Patience.... BUT, if you really need the LOC, never ever ever accept anything more than prime. If you do, you are a fool. Sure, you may cite bank loyalty as a factor, but that is a ridiculous reason. Just go for the thing that drains your pocket the least. If you're really really good, press on them such that even if prime goes up in the future, your rate says at the one you took your LOC out on. Do this at various places, so that they have competition. Heck, even lie about it. These are banks. You don't need morals when dealing with them, just legalities. Link to comment Share on other sites More sharing options...
hopeful123 Posted August 20, 2007 Report Share Posted August 20, 2007 Hey BlackJack Thanks for the great advice. Sadly, I think I will end up going into family medicine Link to comment Share on other sites More sharing options...
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