For those that have signed off already

[nbsam]

On your 150K LOCs with either Scotia, RBC, or TD....

 

I just signed off on mine (yikes kind of cool and scary all at once).

 

Anyway, there is a small blurb on the very last page of the agreement entitled "Changing this agreement". It basically says they can change the rate of interest charged over above the prime rate to arrive at the variable interest rate.

 

In other words, buried on the last page of the loan agreement, there is a small paragraph that seems to say they do not guarantee current rates of prime + 0% forever; they reserve the right to change it.

 

Anyone have a similar legal clause buried somewhere in their multi-page loan agreement?

 

When I asked him about it, the bank guy I've been dealing with focused his explanation on factors that are within my control (meaning they'd change the rate for misuse of LOC or default on payments, etc). These are non-issues really, what I'm more worried about is not being "grandfathered" in the event that the industry decides to change to prime + higher than 0%.

 

I am just worried now because many of you seem to have absolutely secured "lifetime" prime + 0% rates.

 

Or is it just like my scenario, where you are told 'prime + 0%' and your loan document lists that figure as the rate on the main cover agreement but you also have that same "right to change" legal clause buried in the small print of your loan terms and conditions too?

 

I would truly appreciate it if someone could have a peek and let me know....

 

I guess I could switch the whole product over to another bank if I got screwed here somehow. Because if some of you do NOT have this clause in your loan agreement terms and conditions, then you are evidently somehow buffered against any industry changes with respect to the prime + 0% for med students, and I should switch banks asap....

 

thank you in advance for your help!!

[xi88]

Usually all bank LOC agreements have that clause in it for their own protection. Usually though, it wont change unless something drastic happens. Especially now, when prime rate is at a miminum right now and can only go up, theres no reason why they would randomly increase your rate.

 

My father had a home equity LOC a while back when prime was higher. His LOC was prime as well. But when the interest rates dropped, the banks changed it to prime +2. He called them and threatened to change to a different bank, and they gave him his old rate back again.