Line of Credit Options NEW INFO

[Hercegovka]

Hey everyone.

 

So I looked at line of credit options today and I'm not sure where the previous threads are (I saw one thread for American Schools) so I thought I'd post an updated version.

 

I visited RBC, TD, ScotiaBank and National Bank yesterday and today and was able to compare them.

 

ScotiaBank, in my opinion, is the best choice.

 

I'm with RBC now and I was really frustrated with them because at first they told me the wrong information (targeted to a general student line of credit)

 

 

Here is my breakdown of info I've gathered

 

NOTES for All 4 institutions:

1) interest rate = prime rate = 2.25% as of today

2) there are no additional charges or fees associated

3) repayment period for the principal loan beings 12 months after residency

4) Canadian students studying in the U.S. qualify

5) you can use the money however you want (they won't be checking up on you... I saw in one thread someone mentioned this so I asked...) as long as you don't go over the annual cap (see each Bank separately for details)

6) you cannot lock the prime rate (have a fixed rate) while in school

7) if you are studying in the US -- you need a guarantor/co-signer

 

ScotiaBank

--> Line of Credit Max: $200 000 dispersed evenly over 4 years... if you don't use the max of 50 k per year, you can use the remainder of the line of credit during your residency so the money you do not use in years 1-4 does not go to waste

--> Repayment Option:

1) pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

2) defer interest payment + principal payment until 12 months after residency... in this case, you would have to leave some room for interest to accrue on the principal amount so the annual limit will be slightly less than 50 k ... but you can make any payments while in school if you choose to (combination of 1 and 2)

--> Amortization period is 15 years

--> Once repayment period starts (12 months after residency) you can switch from the prime rate to a (most likely) fixed rate that will not fluctuate

--> The line of credit also comes with a personal line of credit of $15 000, a Gold Visa with a limit of $5000, and overdraft protection of $5000

--> no co-signer/guarantor needed if you are studying in Canada and have a good credit rating

 

National Bank

--> they stated it was designed for students studying in Canada

--> Line of Credit Max: $200 000 dispersed unevenly: 50 k max in first year, 40 k max in second year, and 30 k years 3 and 4 (150 000 max during MD) and the other $50 000 goes towards your residency with a max of $20 000 per year

--> Repayment Option:

1) pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

2) defer interest payment + principal payment until 12 months after residency... in this case, you would have to leave some room for interest to accrue on the principal amount so the annual limit will be slightly less than 50 k ... but you can make any payments while in school if you choose to (combination of 1 and 2)

--> Amortization period is 15 years

--> Once repayment period starts (12 months after residency) you can switch from the prime rate to a (most likely) fixed rate that will not fluctuate

--> no fee checking account

--> platinum mastercard -- free to use for the first two years (lots of perks like travel insurance and points)

--> no co-signer/guarantor needed if you are studying in Canada and have a good credit rating

 

RBC

--> Line of Credit Max: $150 000 dispersed evenly over 4 years

--> Repayment Option: pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

--> Did not specify amortization period (although TD told me it was 10 years for RBC)

 

TD

--> Line of Credit Max: $150 000 dispersed unevenly: 60 k max in first year, 30 k max in years 2-4

--> Repayment Option: pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

--> Amortization period is 20 years

 

I hope this helps!

 

P.S. if you guys think this needs to be posted in another thread, let me know and I'll copy it over there

[nemesis]

Thanks for the info!

[spiderpig]

Thanks so much for sharing that info!

 

If you don't mind my asking, when you say that ScotiaBank seems to be the best, what qualities are you basing that opinion on? Because they have the highest limit, or because you think in the long run, you'll pay the least interest?

[discworldheavylight]

thanks Hercegovka for doing all that research and then writing it up so nicely! it must've taken you some time.

 

can someone clarify what the benefits of a line of credit is compared to trying to scrounge by on OSAP, savings and parental loans? my mother seems to think it's better if i borrow money from her instead of a bank and to be honest, i'm a little nervous about the idea of being responsible for a huge deal of debt + interest.

[nemesis]

thanks Hercegovka for doing all that research and then writing it up so nicely! it must've taken you some time.

 

can someone clarify what the benefits of a line of credit is compared to trying to scrounge by on OSAP, savings and parental loans? my mother seems to think it's better if i borrow money from her instead of a bank and to be honest, i'm a little nervous about the idea of being responsible for a huge deal of debt + interest.

 

If your parents can loan you the kind of money you'll need for medical school and related expenses, then that's probably the way to go (assuming they are able to assist you comfortably).

[discworldheavylight]

for clarification, the interest on an LOC is like a credit card, correct? so you only pay off what you actually owe and if you pay it off each month...then it is next to nothing?

 

like let's say i spend 30 dollars one month from my LOC, i would earn 2.25% of interest on that, except i pay it off that month, so it's nothing? or am i completely off base?

[anastomosis]

for clarification, the interest on an LOC is like a credit card, correct? so you only pay off what you actually owe and if you pay it off each month...then it is next to nothing?

 

like let's say i spend 30 dollars one month from my LOC, i would earn 2.25% of interest on that, except i pay it off that month, so it's nothing? or am i completely off base?

 

If the LOC for med is like the other LOC, interest is calculated daily and that interest is added to your balance monthly. LOCs are not like credit cards in that LOC do not have grace periods to pay back.

 

Thanks Hercegovka for the great job on the LOC comparison and research.

[I Heart Rural Med]

Thanks for taking the time to share all this, I really appreciate it!

[Cyradis]

thanks Hercegovka for doing all that research and then writing it up so nicely! it must've taken you some time.

 

can someone clarify what the benefits of a line of credit is compared to trying to scrounge by on OSAP, savings and parental loans? my mother seems to think it's better if i borrow money from her instead of a bank and to be honest, i'm a little nervous about the idea of being responsible for a huge deal of debt + interest.

 

There honestly isn't one - don't borrow off a line of credit until those other 3 options (OSAP, savings, parental loans) are exhausted and you're still short.

 

2.25% is a great interest rate, but OSAP = interest free (at least while you're in school), savings = you're losing your 1% interest? That's worth it for not paying 2.25%, and parental loans... I'm going to assume your mom isn't charging you more than 2.25%, and in all likelihood, she isn't going to charge you interest at all.

 

I'm taking parental loans myself - and repayment options to your parents are a LOT more flexible than a bank loan =P

[regular]

I'll be graduating and starting my residency in July and currently have no loans. Does anyone know if any of the banks will let me apply for one now and tap the whole amount to help pay for a house?

[mystery_chick]

I'll be graduating and starting my residency in July and currently have no loans. Does anyone know if any of the banks will let me apply for one now and tap the whole amount to help pay for a house?

 

You mean like a mortgage?

 

In all seriousness, I'm not sure but I don't know why they would. You'll have a steady income and technically will no longer be a student (more of an employee/intern) but you can always try?

[HBP]

LOC interest rate is much better than a mortgage.

 

I doubt you'll get a large LOC because your education needs are now over.

[amberlamps]

You guys are on the ball! All this jargon is uber confusing to me and I think I finally understand the options a bit better - Thanks OP!

 

One sort of silly question: What if I get a LOC with a bank that is different than my "regular" bank- do I pay a fee to transfer funds from my LOC into my regular chequing account?

[placenta]

This is lovely.

Thanks a bunch.

[Hercegovka]

I'll be graduating and starting my residency in July and currently have no loans. Does anyone know if any of the banks will let me apply for one now and tap the whole amount to help pay for a house?

 

When I was speaking to Scotia Bank, they said they had a program after you're done and that they will help finance you through residency + your career... I"m sure they have more options... I would go and ask them what have to offer, banks love med students

[chuck62]

Hey everyone.

 

So I looked at line of credit options today and I'm not sure where the previous threads are (I saw one thread for American Schools) so I thought I'd post an updated version.

 

I visited RBC, TD, ScotiaBank and National Bank yesterday and today and was able to compare them.

 

ScotiaBank, in my opinion, is the best choice.

 

I'm with RBC now and I was really frustrated with them because at first they told me the wrong information (targeted to a general student line of credit)

 

 

Here is my breakdown of info I've gathered

 

NOTES for All 4 institutions:

1) interest rate = prime rate = 2.25% as of today

2) there are no additional charges or fees associated

3) repayment period for the principal loan beings 12 months after residency

4) Canadian students studying in the U.S. qualify

5) you can use the money however you want (they won't be checking up on you... I saw in one thread someone mentioned this so I asked...) as long as you don't go over the annual cap (see each Bank separately for details)

6) you cannot lock the prime rate (have a fixed rate) while in school

7) if you are studying in the US -- you need a guarantor/co-signer

 

ScotiaBank

--> Line of Credit Max: $200 000 dispersed evenly over 4 years... if you don't use the max of 50 k per year, you can use the remainder of the line of credit during your residency so the money you do not use in years 1-4 does not go to waste

--> Repayment Option:

1) pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

2) defer interest payment + principal payment until 12 months after residency... in this case, you would have to leave some room for interest to accrue on the principal amount so the annual limit will be slightly less than 50 k ... but you can make any payments while in school if you choose to (combination of 1 and 2)

--> Amortization period is 15 years

--> Once repayment period starts (12 months after residency) you can switch from the prime rate to a (most likely) fixed rate that will not fluctuate

--> The line of credit also comes with a personal line of credit of $15 000, a Gold Visa with a limit of $5000, and overdraft protection of $5000

--> no co-signer/guarantor needed if you are studying in Canada and have a good credit rating

 

National Bank

--> they stated it was designed for students studying in Canada

--> Line of Credit Max: $200 000 dispersed unevenly: 50 k max in first year, 40 k max in second year, and 30 k years 3 and 4 (150 000 max during MD) and the other $50 000 goes towards your residency with a max of $20 000 per year

--> Repayment Option:

1) pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

2) defer interest payment + principal payment until 12 months after residency... in this case, you would have to leave some room for interest to accrue on the principal amount so the annual limit will be slightly less than 50 k ... but you can make any payments while in school if you choose to (combination of 1 and 2)

--> Amortization period is 15 years

--> Once repayment period starts (12 months after residency) you can switch from the prime rate to a (most likely) fixed rate that will not fluctuate

--> no fee checking account

--> platinum mastercard -- free to use for the first two years (lots of perks like travel insurance and points)

--> no co-signer/guarantor needed if you are studying in Canada and have a good credit rating

 

RBC

--> Line of Credit Max: $150 000 dispersed evenly over 4 years

--> Repayment Option: pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

--> Did not specify amortization period (although TD told me it was 10 years for RBC)

 

TD

--> Line of Credit Max: $150 000 dispersed unevenly: 60 k max in first year, 30 k max in years 2-4

--> Repayment Option: pay interest monthly while in school for up to 12 months after residency, after that (after residency + 12 month grace period) you pay principal + interest

--> Amortization period is 20 years

 

I hope this helps!

 

P.S. if you guys think this needs to be posted in another thread, let me know and I'll copy it over there

 

Hey, so I am wondering were you got the information that their interest rate is only prime. because when i look on both the RBC & the Scotiabank websites, they say prime + 1%.

 

Any comment? I was really excited to hear that it was just prime, and now I am a little dissapointed.

[rmorelan]

Hey, so I am wondering were you got the information that their interest rate is only prime. because when i look on both the RBC & the Scotiabank websites, they say prime + 1%.

 

Any comment? I was really excited to hear that it was just prime, and now I am a little dissapointed.

 

I had/have loans with both of those companies and both were at prime - really the details of the medical school loans are not on the websites fully for some reason.

 

You are going to hear a chorus of people who will always say it should be/will be prime etc. The only except is CIBC (that I know of)

[kbox]

hey great post:

 

just a clarification; i've gone with rbc and the info that I have is that it is NOT at all distributed for you (i.e. there is not a limit on how much you can use in a given year within reason)

[Hercegovka]

Hey, so I am wondering were you got the information that their interest rate is only prime. because when i look on both the RBC & the Scotiabank websites, they say prime + 1%.

 

Any comment? I was really excited to hear that it was just prime, and now I am a little dissapointed.

 

RBC initially told me prime + 1

and then when I talked to them the second time they said just prime because they realized it was for medical school

I guess for other university programs the rates are different (as well as the amounts)

[discworldheavylight]

RBC initially told me prime + 1

and then when I talked to them the second time they said just prime because they realized it was for medical school

I guess for other university programs the rates are different (as well as the amounts)

 

Hi Hercegovka, my mother took it upon herself to call up BMO the other day and the person in charge of professional school admissions insisted that it was prime +1. When my mother said she'd heard it was prime, the person talked about some fixed vs. not fixed thing where only one of them was fixed. Did you encounter anything like this when you were looking?

[Hercegovka]

Hi Hercegovka, my mother took it upon herself to call up BMO the other day and the person in charge of professional school admissions insisted that it was prime +1. When my mother said she'd heard it was prime, the person talked about some fixed vs. not fixed thing where only one of them was fixed. Did you encounter anything like this when you were looking?

 

No - RBC told me prime + 1 but that's because they weren't aware of the special plan just for med students...

I did inquire about fixed interest rates --- some banks allow you to go with a fixed rate once you start repayment, but odds are it will be higher than prime

 

and I did not go to BMO because I heard they only offer $30,000 max per year... I heard good things about Scotia, National, and RBC, so I was sure to visit those 3...

 

I highly suggest you make appointments at these banks + several others you want to look at, and talk to them in person

When I met with them, they had all the paperwork and brochures ready and were very eager to impress me with stats because they love med students because, well, we need money hehe

[RandomGuy]

Has anyone gone with TD? They are my home bank and I'd prefer to stay with them, if possible, but it seems that few go that route which makes me cautious.

[BigM]

Has anyone gone with TD? They are my home bank and I'd prefer to stay with them, if possible, but it seems that few go that route which makes me cautious.

 

I gave them a call and I wasn't overly impressed. They do not have specialists that handle medical students specifically and there aren't any perks. Its just going to be your basic $150,000 limit @ 2.25%, I believe there was an annual limit, they don't offer any special perks on credit cards, etc.

 

I only spoke to them for a few minutes over the phone but I'm fairly certain they won't be the ones that I end up going with.

 

My advice is actually to start with MD financial. I was talking the Ontario contact there yesterday. They are paid salary by the CMA and do not gain through your losses so their job is to get you through school with as little debt as possible (direction provided by the CMA). The actual loan flows from National Bank but the CMA acts as your advisor. They book an hour long appointment with you where they explain what this is realistically going to cost, provide financial counselling and provide info about disability and life insurence (very important). I would advise taking the hour to talk to them regardless of the bank you end up going with. The appointment is done virtually (i.e. they beam information to your computer) and over the phone.

[bluekazoo]

My advice is actually to start with MD financial. I was talking the Ontario contact there yesterday. They are paid salary by the CMA and do not gain through your losses so their job is to get you through school with as little debt as possible (direction provided by the CMA). The actual loan flows from National Bank but the CMA acts as your advisor. They book an hour long appointment with you where they explain what this is realistically going to cost, provide financial counselling and provide info about disability and life insurence (very important). I would advise taking the hour to talk to them regardless of the bank you end up going with. The appointment is done virtually (i.e. they beam information to your computer) and over the phone.

 

They looked good to me for the same reasons. One concern I have is that it seems that, at least on first glance, the debit card associated with the account is outside the Interac network and so won't work at a lot of ATMs. Can anyone confirm or deny this? If I am correct, does anyone who currently uses MD Financial have a strategy to get around this somewhat annoying problem?

[BigM]

They looked good to me for the same reasons. One concern I have is that it seems that, at least on first glance, the debit card associated with the account is outside the Interac network and so won't work at a lot of ATMs. Can anyone confirm or deny this? If I am correct, does anyone who currently uses MD Financial have a strategy to get around this somewhat annoying problem?

 

This was actually my concern as well. If you go onto the National Bank website you should be able to use their ATM locator. There's apparently 3000 nation wide but instead of real convenient places like in variety stores a lot of them appear to be inside credit unions (still not too bad around where).

 

That said, I am fairly good for keeping some cash on hand for when I go out and I use my credit card for almost all purchases. With the ease of PayPass debit cards are really becoming a thing of the past for me.