future_doc Posted November 14, 2009 Report Share Posted November 14, 2009 Aren't we now talking about the availabiloty of a 200K LOC at prime for the life of the loan? Link to comment Share on other sites More sharing options...
Mourning Cloak Posted November 14, 2009 Report Share Posted November 14, 2009 The 150k LoC at prime throughout residency is not unique to Scotia. I'm with RBC and I have a 150K LoC at prime that will last me through residency and fellowship (I asked my rep). I'm pretty sure TD offers a similar package. Actually, what we're excited about is the intimation that with Scotiabank, your loan remains at prime AFTER you begin practice and start repayment (which takes up to 20 years). In other words, remains at prime FOREVER. (You can't use the line of credit once it goes into repayment, but in most cases they pop the interest rate up on your once you're no longer a resident. According to the original post, this doesn't happen at Scotiabank!) Pretty bloody amazing, if it's true. Link to comment Share on other sites More sharing options...
future_doc Posted November 14, 2009 Report Share Posted November 14, 2009 The LOC with Scotia at prime until paid is at 200k - not 150k. Link to comment Share on other sites More sharing options...
CdnatWayne Posted November 15, 2009 Report Share Posted November 15, 2009 Actually, what we're excited about is the intimation that with Scotiabank, your loan remains at prime AFTER you begin practice and start repayment (which takes up to 20 years). In other words, remains at prime FOREVER. (You can't use the line of credit once it goes into repayment, but in most cases they pop the interest rate up on your once you're no longer a resident. According to the original post, this doesn't happen at Scotiabank!) Pretty bloody amazing, if it's true. Do you have anecdotal evidence that the bank increases the the interest rate once your done residency? If you read the bank documents that you signed, they actually state that the bank can change the interest rate at any time (including during your medical training) but they do not. At least that's my understanding of the med LoC that I got from my banker because if its not true than Scotia is truly offering an exciting deal! Additionally, once you are a practicing physician, I doubt you will ever have a LoC that is not at prime (You should be able negotiate one at prime). Link to comment Share on other sites More sharing options...
Mourning Cloak Posted November 15, 2009 Report Share Posted November 15, 2009 Do you have anecdotal evidence that the bank increases the the interest rate once your done residency? Not anecdotal, actually. My husband has a bank loan (he finished family med) and his interest rate on the repayment increased from prime to RBC's standard small business loan rates. If you read the bank documents that you signed, they actually state that the bank can change the interest rate at any time (including during your medical training) but they do not. You bet they do. Both Bank of Montreal and CIBC increased their rates this past year for med students from prime to prime +0.5-1% - other banks may have done the same. A lot of people had to switch their LOCs away from these banks, which is not an inconsequential amount of bother if you're a clerk or resident. My husband's bank documents actually say that upon completion of residency + a grace period of 6 months, the LOC is converted into another banking product e.g. a business LOC. And this is what happened, with the consequent increase in interest rates. Additionally, once you are a practicing physician, I doubt you will ever have a LoC that is not at prime (You should be able negotiate one at prime). Better double check that. I've never seen a LOC for a practicing physician at prime (especially when prime is so low!) and we called around to everyone. That's why everyone on this thread is so shocked . . . money for nothing is pretty damn incredible. Link to comment Share on other sites More sharing options...
future_doc Posted November 15, 2009 Report Share Posted November 15, 2009 . . . money for nothing is pretty damn incredible. It is simply good business for them to attract a client who will likely make them a fortune in the decades ahead. The greedy banks, or individuals w/i the bank who want to make more money than they should, will nail you to the wall if you are unaware of what the competition offers. You need to be aninformed consumer always. Link to comment Share on other sites More sharing options...
rmorelan Posted November 15, 2009 Report Share Posted November 15, 2009 Pretty bloody amazing, if it's true. Exactly what I was thinking. Got an appointment on Tuesday with them to look into this. Link to comment Share on other sites More sharing options...
CdnatWayne Posted November 15, 2009 Report Share Posted November 15, 2009 Thanks for sharing that information Mourning Cloak, it was very informative to say the least for me. I guess I was under the wrong impression from my rep, I'm going to look into this for sure. Be sure to update us rmorelan! Link to comment Share on other sites More sharing options...
rmorelan Posted November 16, 2009 Report Share Posted November 16, 2009 Thanks for sharing that information Mourning Cloak, it was very informative to say the least for me. I guess I was under the wrong impression from my rep, I'm going to look into this for sure. Be sure to update us rmorelan! Will do Link to comment Share on other sites More sharing options...
leviathan Posted November 17, 2009 Report Share Posted November 17, 2009 My mom is a branch manager with Scotiabank, I will have to ask her details on this. Link to comment Share on other sites More sharing options...
leviathan Posted November 19, 2009 Report Share Posted November 19, 2009 Apparently when you're finished your student line of credit is switched over into a personal line of credit, but it should stay at the same rate you were getting with the professional student LOC. Link to comment Share on other sites More sharing options...
future_doc Posted November 19, 2009 Report Share Posted November 19, 2009 The devil is always in the details. Presumably, the loan documentation will make it very clear that the interest rate "shall" rmeain at prime until fully repaid (whether or not it is transferred to a personal line) and the borrower will not thereby need to rely upon the good faith of the banker, perhaps a different person, years later. Bottom line, the documentation should be very clear and not subject to interpretation later on. Link to comment Share on other sites More sharing options...
rmorelan Posted November 19, 2009 Report Share Posted November 19, 2009 Apparently when you're finished your student line of credit is switched over into a personal line of credit, but it should stay at the same rate you were getting with the professional student LOC. How seriously can we take the phrase "should stay at the same rate" - is that enforced somehow? Link to comment Share on other sites More sharing options...
future_doc Posted November 19, 2009 Report Share Posted November 19, 2009 How seriously can we take the phrase "should stay at the same rate" - is that enforced somehow? Logic/common sense dictates that you need to read the fine print and ensure bank is obliged to maintain prime throughout payment of loan until paid in full, even if it is given a different designation after you are no longer a student - otherwise, you will be deasd in the water and not have a leg to stand on. Link to comment Share on other sites More sharing options...
leviathan Posted November 21, 2009 Report Share Posted November 21, 2009 How seriously can we take the phrase "should stay at the same rate" - is that enforced somehow? I don't think it is enforced. It sucks, but I'm assuming my mom is saying this based off experience that it's always offered at prime. Don't take my word on it though, and if you're signing something try to get it in more concrete language. Link to comment Share on other sites More sharing options...
Coach Posted November 21, 2009 Report Share Posted November 21, 2009 How seriously can we take the phrase "should stay at the same rate" - is that enforced somehow? I've mentioned before that I'm currently a divisional director at one of the big banks (hint: it might even be Scotiabank ). The reason why the branch manager is saying "should" is because once you graduate, your LOC accountant basically changes. You are no longer a student. You will either be classed as a preferred / high value personal client of that branch or a small business account (if you open a medical practice). It is probable that your LOC would be somewhere in the prime rate range, but banks (and the branch managers to some degree) adjust rates and rules in line with what's happening in the market. Bottom line is that the manager can't promise an exact long-term LOC interest rate once you are no longer a student. But you can expect to get the best-of-the-best rate as long as you pay your bills and maintain a good credit rating. Once you graduate you have a lot of leverage. If another bank offers a better LOC interest rate then your current bank, your bank WILL match or beat the rate. Trust me. I'd say Scotiabank has upped their game in terms of medical student LOCs. And by the way, don't worry about the % being enforced in several years time. You can enforce it through competition and the freedom to move your account. Link to comment Share on other sites More sharing options...
rmorelan Posted November 21, 2009 Report Share Posted November 21, 2009 I've mentioned before that I'm currently a divisional director at one of the big banks (hint: it might even be Scotiabank ). The reason why the branch manager is saying "should" is because once you graduate, your LOC accountant basically changes. You are no longer a student. You will either be classed as a preferred / high value personal client of that branch or a small business account (if you open a medical practice). It is probable that your LOC would be somewhere in the prime rate range, but banks (and the branch managers to some degree) adjust rates and rules in line with what's happening in the market. Bottom line is that the manager can't promise an exact long-term LOC interest rate once you are no longer a student. But you can expect to get the best-of-the-best rate as long as you pay your bills and maintain a good credit rating. Once you graduate you have a lot of leverage. If another bank offers a better LOC interest rate then your current bank, your bank WILL match or beat the rate. Trust me. I'd say Scotiabank has upped their game in terms of medical student LOCs. And by the way, don't worry about the % being enforced in several years time. You can enforce it through competition and the freedom to move your account. The logical fall out then would suggest that since it is enforced only by market pressures (which collectively would bind all the banks to essentially the lowest rate any of them offered) then the only advantage to the Scotiabank line is that is a 200,000 rather than 150,000 limit. Since the lower amount seems more than adequate anyway (considering other government loan programs in particular that offer significant loan forgiveness and grants) what advantage would there be in switching as all the banks offer prime rate interest on the LOC until after residency? Link to comment Share on other sites More sharing options...
Jochi1543 Posted November 21, 2009 Report Share Posted November 21, 2009 The logical fall out then would suggest that since it is enforced only by market pressures (which collectively would bind all the banks to essentially the lowest rate any of them offered) then the only advantage to the Scotiabank line is that is a 200,000 rather than 150,000 limit. Since the lower amount seems more than adequate anyway (considering other government loan programs in particular that offer significant loan forgiveness and grants) what advantage would there be in switching as all the banks offer prime rate interest on the LOC until after residency? I think it's mostly for people with large amounts of previous debt and with families to support. Link to comment Share on other sites More sharing options...
rmorelan Posted November 21, 2009 Report Share Posted November 21, 2009 I think it's mostly for people with large amounts of previous debt and with families to support. Thats a valid point! There would be specific cases where the extra money would be useful. Wonder what fraction of students that sort of extra need would apply to? Link to comment Share on other sites More sharing options...
Coach Posted November 21, 2009 Report Share Posted November 21, 2009 I think it's mostly for people with large amounts of previous debt and with families to support. Good point. Basically, if all things are equal (interest rate) then I'd go with the highest LOC for "just in case." In my case I have a family to support: if I get into med school then I would be giving up my job and we would need a fair wad of cash to get through the MD years Link to comment Share on other sites More sharing options...
future_doc Posted November 21, 2009 Report Share Posted November 21, 2009 Also, it gives you the opportunity to purshase a home at a very attractive int. rate if you intend to settle in the area of the med school or if it is a sound investment based upon real estate values and likelihood of increase. Link to comment Share on other sites More sharing options...
rmorelan Posted November 21, 2009 Report Share Posted November 21, 2009 Also, it gives you the opportunity to purshase a home at a very attractive int. rate if you intend to settle in the area of the med school or if it is a sound investment based upon real estate values and likelihood of increase. Thats true too! Although you can't really complain if your med school loans aren't large enough to pay for a house as well as school, and I guess you also have no assurances as to where your residency will be as well Link to comment Share on other sites More sharing options...
future_doc Posted November 21, 2009 Report Share Posted November 21, 2009 You are absolutely correct! You ave the option to do it though, if you are advetnurous like Jochi. Link to comment Share on other sites More sharing options...
rmorelan Posted November 22, 2009 Report Share Posted November 22, 2009 You are absolutely correct! You ave the option to do it though, if you are advetnurous like Jochi. Yes the adventures of Jochi and her roommate is legendary. Not sure I could handle a drum set going off where I leave Link to comment Share on other sites More sharing options...
future_doc Posted November 22, 2009 Report Share Posted November 22, 2009 I understand! Link to comment Share on other sites More sharing options...
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