Student Loan vs. Line of Credit

[Mithril]

That was very informative, Anne, thank you. Your dad taught you well.

 

After a lot of researching I've decided to go with RBC for my LoC.

[papaya100]

Thanks- that was a very useful explanation!

 

I have to say I am getting cold feet about going to med school, when I think about the amount of debt ca. 115,000 I will have to take on! I am not sure if I am going to get any money from OSAP- and thus so much money to borrow from a bank, without any assets as collateral, seems a bit overwhelming...

[rmorelan]

Thanks- that was a very useful explanation!

 

I have to say I am getting cold feet about going to med school, when I think about the amount of debt ca. 115,000 I will have to take on! I am not sure if I am going to get any money from OSAP- and thus so much money to borrow from a bank, without any assets as collateral, seems a bit overwhelming...

 

It can be a bit overwhelming for sure! If it helps a bit pretty much most students are in the same boat - and so has most people that made it though the system. Most people pay off the loans within a few years of practise. Things just work out in the end

 

.... I mean it is such a sure thing that Banks are willing to give you 200,000 without a collateral. That actually says a lot.

[aaronjw]

 

.... I mean it is such a sure thing that Banks are willing to give you 200,000 without a collateral. That actually says a lot.

 

This.

 

Pretty much all loans you get after you've paid off your education will be handed to you just because you're a Doctor.

[thom5454]

A Physician is one of the few vocations/jobs that you are 100% going to get paid at a high level. A lawyer, for example, has to be paid by their clients. Should they declare bankruptcy, the lawyer does not get paid at all. (This has happened to a good lawyer I know, just part of the business). As a physician, you have a stable and high income here in Canada in most cases. In the US, it varies more regarding who you serve.

The debt is worth it, I had to consider the US and was shaky at the potential of being 350-400K in debt once I graduated. That would have meant a restriction on what I could practice later on but Medicine is worth it. It eventually would have been paid off. Fortunately, getting into a Canadian school, the amount is peanuts to that.

It seems like a lot now, but one of the few things you can always justify going in debt for is education and "bettering" yourself. From a financial perspective, becoming a physician is most definitely that.

[iicii]

why do you say that? If you've only had 3 years of school...then yea, it still depends on your parents' income..but if you've been out of high for 4 years (aka completed a 4 year degree) and is considered an ontario resident, I think OSAP will give you a loan, I did my estimate and was given a decent estimate, while you probably still need a LOC on top of that (if you have no other forms of support), it's still a lot less reliance on your LOC...

 

Thanks- that was a very useful explanation!

 

I have to say I am getting cold feet about going to med school, when I think about the amount of debt ca. 115,000 I will have to take on! I am not sure if I am going to get any money from OSAP- and thus so much money to borrow from a bank, without any assets as collateral, seems a bit overwhelming...

[HBP]

why do you say that? If you've only had 3 years of school...then yea, it still depends on your parents' income..but if you've been out of high for 4 years (aka completed a 4 year degree) and is considered an ontario resident, I think OSAP will give you a loan, I did my estimate and was given a decent estimate, while you probably still need a LOC on top of that (if you have no other forms of support), it's still a lot less reliance on your LOC...

 

I think I read in another post that he/she lived abroad for a few years so may not qualify for provincial/federal student loans.

[papaya100]

I think I read in another post that he/she lived abroad for a few years so may not qualify for provincial/federal student loans.

 

Yes, I have been living in Germany for past 4.5 years doing grad work. This complicates things in terms of assets etc... So am not sure how I should fill out the OSAP application....

[ryacha]

I have heard of people getting offered mostly prime through schooling and prime +1 (or 2) in residency.

 

I recently spoke with Scotiabank and they offered all the regulars (200k etc...) but I was surprised to hear it was prime throughout school and residency (and even fellowship). Is there some question I haven't asked that I should be asking, or is it that they will hike the rate once I start repaying it a year after residency? Or am I just lucky?

[The Ace of Spades]

...or is it that they will hike the rate once I start repaying it a year after residency?

 

You should always be able to get prime during residency. The exact interest rate during repayment is to be negotiated one year after you complete residency and is often also prime, unless your credit history was bad during the loan. Despite what everyone says, I don't think you can be guaranteed prime during repayment - just that the majority of people are able to get it.

[rmorelan]

You should always be able to get prime during residency. The exact interest rate during repayment is to be negotiated one year after you complete residency and is often also prime, unless your credit history was bad during the loan. Despite what everyone says, I don't think you can be guaranteed prime during repayment - just that the majority of people are able to get it.

 

yeah that is my understanding - banks won't limit themselves on paper if they don't have to, Still market pressures have kept them in line on the repayment rates