2014? Posted March 25, 2010 Report Share Posted March 25, 2010 A bit of a pre-mature question as I have 5 months to sort this out... but I'm curious. Do most people get the max they can from student loans and then dip into the LOC? Or is it easier to just use LOC from the get go and not bother with student loans? Are they federal, provincial loans, both? If I go out of province will provincial money follow me? I apologize as I'm assuming these are fairly silly questions.... I've been lucky enough to not need student loans up until this point and am completely in the dark! Link to comment Share on other sites More sharing options...
HBP Posted March 25, 2010 Report Share Posted March 25, 2010 Your provincial money will follow you. It's foolish to use your LOC without tapping into your student government loans first. LOC will carry interested as soon as you withdraw, your provincial loans will be interest free until the end of medical school (I believe in some instances, until the end of residency). Link to comment Share on other sites More sharing options...
astudentis Posted March 26, 2010 Report Share Posted March 26, 2010 Yes, I believe you only start to pay interest on student loans 7-12months after finishing med school. Unlike LOC, which have prime interest rate/annual compounded daily on what ever amount you take out, which you have to pay monthly. Link to comment Share on other sites More sharing options...
xi88 Posted March 26, 2010 Report Share Posted March 26, 2010 is everyone eligible to government loans? It depends in your gross household income. If you are not married, and dont have children, then you are your own family. If your annual income (amount you filed on your last year's tax return) + value of assets (car, house, etc.) + scholarships you receive - your living expense (rent + food, which is calculated per a formula on the applicaiton form) is < your tuition, then you will get a loan. Yes, I believe you only start to pay interest on student loans 7-12months after finishing med school. Unlike LOC, which have prime interest rate/annual compounded daily on what ever amount you take out, which you have to pay monthly. Some banks dont compound daily; they compound instantaneously at the per anum rate . Most banks dont actually make you pay monthly. You can have it rollover (just add the interest amount to your total principle balance each month). Link to comment Share on other sites More sharing options...
JB_15 Posted March 26, 2010 Report Share Posted March 26, 2010 I am not sure I agree with this. It seems to me that some lines of credit don't require interest once money is withdrawn. See for example this info on the line of credit from MD Management (national bank): "Statement of account • Mailed every 30 days. There is no obligation of interest or capital payment during medical school and residency. Interest will accrue during this period. Interest and insurance premium fees (if applicable) always appear on the monthly statement of account; and bear interest beginning at this time. It is possible to pay those fees if desired. No annual fees. No administration fees." Link to comment Share on other sites More sharing options...
xi88 Posted March 26, 2010 Report Share Posted March 26, 2010 "Statement of account • Mailed every 30 days. There is no obligation of interest or capital payment during medical school and residency. Interest will accrue during this period. Interest and insurance premium fees (if applicable) always appear on the monthly statement of account; and bear interest beginning at this time. It is possible to pay those fees if desired. No annual fees. No administration fees." This means that you dont have to pay it, but its still there. It just adds on to your principle balance. For example, if borrowed $1000 by the end of the month your monthly interest would be $2.08. You wouldnt have to write the bank a cheque for $2.08, you balance would just become $1002.08. Link to comment Share on other sites More sharing options...
JB_15 Posted March 26, 2010 Report Share Posted March 26, 2010 This means that you dont have to pay it, but its still there. It just adds on to your principle balance. For example, if borrowed $1000 by the end of the month your monthly interest would be $2.08. You wouldnt have to write the bank a cheque for $2.08, you balance would just become $1002.08. Yes, yes of course, I understand. But what I'm saying is that its a good option if cash flow during school and residency is the priority. Once you are making staff dollars, the accrued interest is easier to handle, and this gives you more money to manage your day to day expenses while you still have no income. Link to comment Share on other sites More sharing options...
jkj Posted March 31, 2010 Report Share Posted March 31, 2010 I think what xi_88 is trying to say is that you should spend the government student loan money first, not that you should do one over the other. Canada/provincial student loans carry no interest while you are in school or doing a post-grad training program (residency). You can take that money, which maxes out somewhere around $19 000/year and use it to pay your tuition and some of your living expenses. If you have no other income or support, you're going to need an LOC on top of that anyway. Using the loan interest-free loan money first will make your borrowing costs less during your education. Once you are done residency your government student loans will need to be repaid. The interest rate on that loan will be higher than on your LOC. At this point you can use the LOC to pay off the government loans to minimize your cost of borrowing. Also, because you have (most likely) been out of high school for four years, you are now essentially your own family (i.e. your parents' incomes have no bearing on your financial need) and if you don't have significant income or assets (a car over a certain value or a home, etc.) you will be eligible for about $2200 in government grant money to use toward your education. This alone makes it worth applying for loans to use either alone or in combo with an LOC. **Not sure if this is provincial or federal. I'm a NS student. Related: regardless of which bank you plan on using for your LOC, talk to someone at a main branch in Halifax about your LOC. They have representatives there who deal specifically in professional school loans and are familiar with the borrowing terms. As a medical student you are eligible to borrow at PRIME, which is not common. Bankers who do not deal with professional students regularly may not be aware of this and could try to sign you on at prime+1%, prime+2%, etc. If this does happen, thank them for their time and call someone who is more familiar with this type of account. Link to comment Share on other sites More sharing options...
drhm Posted March 31, 2010 Report Share Posted March 31, 2010 Hi jkj, I read on the Royal Bank website for student line of credit (professional student) that the rate is prime + 1%. Are you with royal bank? Thanks for all the info..very helpful! Link to comment Share on other sites More sharing options...
future_doc Posted March 31, 2010 Report Share Posted March 31, 2010 God post jk. You are one of our hidden assets, keep it up! Link to comment Share on other sites More sharing options...
oldtrout Posted March 31, 2010 Report Share Posted March 31, 2010 The car/assets part of this interests me. In buying a car (which is almost necessary for some school locations) are you effectively reducing changes at getting loans/grants from the gov't? Link to comment Share on other sites More sharing options...
LawDoc79 Posted March 31, 2010 Report Share Posted March 31, 2010 Keep in mind as well that any interest you pay on Government Student Loans once they go into repayment can be used as a tax credit when filing your income tax returns - the same does not apply to any interest paid on LOCs. Link to comment Share on other sites More sharing options...
HBP Posted March 31, 2010 Report Share Posted March 31, 2010 The car/assets part of this interests me. In buying a car (which is almost necessary for some school locations) are you effectively reducing changes at getting loans/grants from the gov't? Yes. If possible, buy it in someone else's name. The government will expect you to sell your car to pay for school. Link to comment Share on other sites More sharing options...
astudentis Posted March 31, 2010 Report Share Posted March 31, 2010 Hi jkj, I read on the Royal Bank website for student line of credit (professional student) that the rate is prime + 1%. Are you with royal bank? Thanks for all the info..very helpful! its at prime http://www.rbcroyalbank.com/student/medical/plan.html Link to comment Share on other sites More sharing options...
medgirl2014 Posted April 16, 2010 Report Share Posted April 16, 2010 I was just looking at contact person's for Scotiabank's LOC and they list a person in Halifax area for Dalhousie. I was wondering if the people going to the NB campus should try to contact someone in the SJ area or go through the contact person in Nova-Scotia. I imagine that it would be easier to deal with a bank that is close to where I study. Link to comment Share on other sites More sharing options...
w8kg6 Posted April 16, 2010 Report Share Posted April 16, 2010 I was just looking at contact person's for Scotiabank's LOC and they list a person in Halifax area for Dalhousie. I was wondering if the people going to the NB campus should try to contact someone in the SJ area or go through the contact person in Nova-Scotia. I imagine that it would be easier to deal with a bank that is close to where I study. Call Tom Burns at (506) 658-3301 ext. 3002. He's in SJ, and he just set me up with mine. Link to comment Share on other sites More sharing options...
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