roycer Posted June 2, 2008 Report Share Posted June 2, 2008 Hello everyone, I was just accepted to medical school in Manitoba and will be taking out a LOC in the near future. However, I haven't made an appointment with an RBC credit specialist yet and just wanted some answers from fellow RBC LOC users. This thread applies only to RBC... 1) How easy is it to take out a 150k LOC? Do they look at your credit history at all? Do they offer better interest rates for 150k as opposed to 100k? 2) What does 'OSAP' mean? 3) Does the interest accumulate after I'm done my 4 years of medical school or immediately after I use some of the LOC money? 4) Do I need to make any payments to my LOC during my 4 years of school? 5) How do I use the LOC money to make large payments or purchases? (tuition, laptop etc.) 6) If I want to use the LOC money for general purchases, do I always need to transfer money from the LOC into my chequing account? Please answer if you can!! It will be greatly appreciated!! Link to comment Share on other sites More sharing options...
flying kumquat Posted June 2, 2008 Report Share Posted June 2, 2008 1) How easy is it to take out a 150k LOC? Do they look at your credit history at all? Do they offer better interest rates for 150k as opposed to 100k? It's fairly easy, but they take a look at your credit history. When I went in before 1st year, they only really wanted to give me access to 30k a year. I talked them into the whole 150k before 2nd year, mostly because I was tired of making appointments to go see them. 2) What does 'OSAP' mean? substitute X student loans, where X = your home province, whenever you see OSAP. It's an Ontario thing. 3) Does the interest accumulate after I'm done my 4 years of medical school or immediately after I use some of the LOC money? Immediately. That money ain't free. 4) Do I need to make any payments to my LOC during my 4 years of school? Just interest payments. They typically take this out of your chequing account. If you have no other means of income, this basically means transferring money out of your LOC to chequing to cover the money that will be withdrawn for the LOC interest payment. Overdraft is highly recommended, in my opinion. 5) How do I use the LOC money to make large payments or purchases? (tuition, laptop etc.) For tuition, I treated it just like any other online bill payment. Your debit card/chequing account should have something like a $2500 daily limit on it. For large purchases, however, I tend to use my credit card and pay it off with my LOC. 6) If I want to use the LOC money for general purchases, do I always need to transfer money from the LOC into my chequing account? Yes, or have overdraft. I tend to use my credit card for many general purchases because (a) I don't have to worry about not having enough funds in chequing, ( interest accumulates immediately on my LOC but only if I don't pay my monthly bill with credit card, and © I like PC points and free groceries. Link to comment Share on other sites More sharing options...
roycer Posted June 2, 2008 Author Report Share Posted June 2, 2008 It's fairly easy, but they take a look at your credit history. When I went in before 1st year, they only really wanted to give me access to 30k a year. I talked them into the whole 150k before 2nd year, mostly because I was tired of making appointments to go see them. substitute X student loans, where X = your home province, whenever you see OSAP. It's an Ontario thing. Immediately. That money ain't free. Just interest payments. They typically take this out of your chequing account. If you have no other means of income, this basically means transferring money out of your LOC to chequing to cover the money that will be withdrawn for the LOC interest payment. Overdraft is highly recommended, in my opinion. For tuition, I treated it just like any other online bill payment. Your debit card/chequing account should have something like a $2500 daily limit on it. For large purchases, however, I tend to use my credit card and pay it off with my LOC. Yes, or have overdraft. I tend to use my credit card for many general purchases because (a) I don't have to worry about not having enough funds in chequing, ( interest accumulates immediately on my LOC but only if I don't pay my monthly bill with credit card, and © I like PC points and free groceries. Thanks a lot! Just a few more questions for you: 1) What is overdraft? Sorry I know this is a dumb question. 2) You pay for tuition like an online bill payment? Do you make 'Faculty of Medicine' a payee just like all your other bills? My debit account has $1000 daily limit which will probably be increased. 3) I don't understand this statement: "interest accumulates immediately on my LOC but only if I don't pay my monthly bill with credit card." Don't you pay off your credit card with your LOC and not the other way around? Thanks a lot!! Link to comment Share on other sites More sharing options...
flying kumquat Posted June 2, 2008 Report Share Posted June 2, 2008 1) Overdraft is a certain amount of money you're allowed to go below $0 (i.e. negative money). So, you have $20 in your chequing account, you use it to buy a $50 item, and you have -$30 afterward in your account thanks to overdraft. This is instead of the debit machine saying "insufficient funds". It also saves your butt when the bank is taking out LOC payments and you're not exactly sure how much they'll be, so you don't get charged if you don't put exactly the right amount in. I hope that makes more sense. I'm sure there are better explanations out there, as I am clearly not in banking. 2) Yes, I pay to "Queen's University" with my account number as my student number. I don't know if it would be the same for University of Manitoba. 3) You have to pay interest eventually. If you put your purchases on your credit card, you have that little bit of extra interest-free time before the next bill rolls around (which I then pay off with my LOC). This is in contrast to putting everything on your chequing account/LOC immediately, thereby being charged interest, even if it's a small amount, immediately. So, yes, I do pay off my credit card with my LOC, but I somewhat defer racking up interest by not immediately putting those purchases on my LOC. It's probably not a big amount, but as I said, there are other perks to using credit cards too. Hope that clears some things up! Link to comment Share on other sites More sharing options...
Sergie Posted June 2, 2008 Report Share Posted June 2, 2008 Wanted to add some fresh experience with RBC LOC. I was able to get 125K from RBC instead of adverised 150K, which was immediately decreased to 30K\year at prime. Checks, transactions, Gold VISA, 2 (?)money orders - all for free. No monthly fees. When I talked to MD management (working with National Bank), the offer was 150k over 4 years, reduced to 50k first year. This is in Montreal. Hope, you will get what you need. I couldn't. Link to comment Share on other sites More sharing options...
roycer Posted June 2, 2008 Author Report Share Posted June 2, 2008 1) Overdraft is a certain amount of money you're allowed to go below $0 (i.e. negative money). So, you have $20 in your chequing account, you use it to buy a $50 item, and you have -$30 afterward in your account thanks to overdraft. This is instead of the debit machine saying "insufficient funds". It also saves your butt when the bank is taking out LOC payments and you're not exactly sure how much they'll be, so you don't get charged if you don't put exactly the right amount in. I hope that makes more sense. I'm sure there are better explanations out there, as I am clearly not in banking. 2) Yes, I pay to "Queen's University" with my account number as my student number. I don't know if it would be the same for University of Manitoba. 3) You have to pay interest eventually. If you put your purchases on your credit card, you have that little bit of extra interest-free time before the next bill rolls around (which I then pay off with my LOC). This is in contrast to putting everything on your chequing account/LOC immediately, thereby being charged interest, even if it's a small amount, immediately. So, yes, I do pay off my credit card with my LOC, but I somewhat defer racking up interest by not immediately putting those purchases on my LOC. It's probably not a big amount, but as I said, there are other perks to using credit cards too. Hope that clears some things up! Thanks for the clarification! Anyone else have problems taking out 150k from RBC? I wonder what the issue is... Link to comment Share on other sites More sharing options...
Kirby Posted June 2, 2008 Report Share Posted June 2, 2008 I recently went to RBC to get my LOC. I was given free overdraft, gold visa, banking, cheques and money orders. I was also given the full $150,000 up front - no limited release over my degree. When I asked about this I was told "If you're responsible enough to get into medicine, you can handle $150,000"! I should mention that I currently have a student loan from my UG for $30,000. Also, they did perform a credit check before approving the loan! Link to comment Share on other sites More sharing options...
Laika Posted June 2, 2008 Report Share Posted June 2, 2008 I was also given the full $150,000 up front - no limited release over my degree. When I asked about this I was told "If you're responsible enough to get into medicine, you can handle $150,000"! My financial planner at MDM would beg to differ... he said he was amazed at how many MDs abused LOCs during med school and were therefore burdened with huge, unnecessary debt as residents. Link to comment Share on other sites More sharing options...
Kirby Posted June 2, 2008 Report Share Posted June 2, 2008 My financial planner at MDM would beg to differ... he said he was amazed at how many MDs abused LOCs during med school and were therefore burdened with huge, unnecessary debt as residents. I'm not sure if that was a slight to my own personal financial management skills, but I tend to agree with you haha. In the end the bank will profit when we pay them back so I don't think they have too much reason to fret. Hence my RBC specialist's attitude! Link to comment Share on other sites More sharing options...
Laika Posted June 2, 2008 Report Share Posted June 2, 2008 No, I didn't mean to direct that at you personally! I think the FP just meant some people go nuts when they get a large LOC and don't appreciate how quickly interest accrues and how long it will take to pay back... Link to comment Share on other sites More sharing options...
roycer Posted June 2, 2008 Author Report Share Posted June 2, 2008 People actually use their LOC's to buy cars I hear. Crazy stuff. Link to comment Share on other sites More sharing options...
roycer Posted June 3, 2008 Author Report Share Posted June 3, 2008 Is 150k the standard for medical student LOC's? Are there any students here that have taken out smaller LOC's? Link to comment Share on other sites More sharing options...
ouchitburns Posted June 3, 2008 Report Share Posted June 3, 2008 why does it matter? just take the biggest LOC possible and don't use it if you don't need to. You don't have to pay anything on what you don't use. Link to comment Share on other sites More sharing options...
roycer Posted June 3, 2008 Author Report Share Posted June 3, 2008 why does it matter? just take the biggest LOC possible and don't use it if you don't need to. You don't have to pay anything on what you don't use. That's what I thought. My parents seem to believe that with a larger LOC I will be tempted to do more unnecessary spending. Gah! Link to comment Share on other sites More sharing options...
ouchitburns Posted June 3, 2008 Report Share Posted June 3, 2008 well, I think it can be an issue, but they can't protect you forever. Tell them that this is the best time to learn fiscal responsibility! I think that you, or the bank, can impose limits to your yearly allowance. That will provide some safety if the 'rents are really concerned Link to comment Share on other sites More sharing options...
epigal Posted June 3, 2008 Report Share Posted June 3, 2008 I should mention that I currently have a student loan from my UG for $30,000. Also, they did perform a credit check before approving the loan! hi Kirby, I am in a similar situation, with a LOC from my masters program. Was RBC willing to amalgamate your two loans, so that you paid off the first 30,000? Or did you try to do that? I think it may be a good idea for me, as my current LOC is at Prime + 2 (vs Prime for a med LOC) thanks! Link to comment Share on other sites More sharing options...
Kirby Posted June 3, 2008 Report Share Posted June 3, 2008 Hi epigal, The student loan from my undergrad, like yours, is paid back at prime +2.5%. That said, it is interest free while I am in school. Since I'll be entering into med in August it makes sense to keep that loan under the government until I graduate from the program. At that time, I'll try and pay off the student loan with my LOC in order to get the prime rate. Hope that helps! Link to comment Share on other sites More sharing options...
MillerTime Posted June 3, 2008 Report Share Posted June 3, 2008 hi Kirby, I am in a similar situation, with a LOC from my masters program. Was RBC willing to amalgamate your two loans, so that you paid off the first 30,000? Or did you try to do that? I think it may be a good idea for me, as my current LOC is at Prime + 2 (vs Prime for a med LOC) thanks! Even if they didn't "almagamate" the loans, if you got the med LOC, you could just pay off the other LOC with the med LOC. And then if you end up running out of money on your med LOC (which hopefully wouldn't happen!) you could then dip into the higher interest rate LOC. Link to comment Share on other sites More sharing options...
epigal Posted June 3, 2008 Report Share Posted June 3, 2008 That definitely helps, thanks. Link to comment Share on other sites More sharing options...
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