Very Important Regarding Student line of Credit for premed

[testing123]

Hi, for my undergrad this fall im going into a uni at a different city so i need to finance my livin + food and etc. I have osap + bursaries + scholarships but because i have yet to experience living on my own, i wouldnt like to take the risk of becoming short of money.

 

Im not interested in taking out alot, but i think my living costs will exceed the 8.5k that osap presumes, so atleast for the first year i plan on having 2-4k cushion money.

 

the twist is that im not going to let another individual cosign for me under any circumstances. And as im about to turn 18 next month, i have no whatsoever credit history. Now what are my options?

 

I did some research and found out that scotiabank, where my RESP is held at (surprisingly) requires a cosigner under all circumstances. I have then moved on to researching requirements for other banks, but most of them offer a min of 5k, and for many of them, i have fill out long application forms just so they could tell me if they require a cosigner from me or not. And do note im very new and virtually have no knowledge regarding these topics, so if i were to take the 5k min student line of credit, how is the interest rate going to be charged on it? is the interest rate charged on only what i take out? and if so how does that system work?

 

Also can anyone give me recom'ds/advice regarding where and which bank to approach to for unsecured student lines of credit.

 

The other option that i have found out are visa/credit cards for my scenario.

For example i did an online analysis at rbc, and they offered me these two cards;

 

http://www.rbcroyalbank.com/credit-cards/tools/credit-card-selector/index.html?usage=student&type=type_nofee&feature=feature_rewards

 

Now i have to say, ive never used a credit card before, so im in unfamiliar territorial grounds once again. If i used my credit card or visa card (i hope theyre the same thing?) for a purchase of lets say $500, how would they charge me back? a minimum amount to be paid every month (is that the interest of the $500 purchase?)?

And by the way im sorry for any confusions that may have occurred because of my unfamiliarity on these topics.

 

So in summary, the two options ive researched so far for having 2-4k cushion money incase i fall short for livin costs, and etc. are an unsecured student line of credit, and a visa/master card, but if anyone can offer any other options, it would be greatly appreciated.

 

And basically my goal is to get more money but under "similar" circumstances such as osap's, as i dont mind paying something like 30$ per month (which il get from my osap funding) to have access to using 2-4k.

 

Perhaps one last thing to mention; most of this is meant to cushion my transition from gr 12 to first year uni, in an environment where i would have to fend for myself (regarding my physical needs of course). So in essence, for the later on years of my eng undergrad, i most likely get a room mate, which would reduce the cost of rent to like $300, and probably even the cost of groceries, internet and etc. and i could expect to cut back the student line of credit to 1k

 

Thanks for being patient and taking the time to read this.

[testing123]

OKAY, VERY BIG IMPORTANT UPDATE, CAN SOM1 PLEASE VERIFY: (BTW IM DOIN Beng)

 

"Engineering and accounting undergrads qualify as professional students at RBC. Other than that, none that I know of."

 

from http://forums.redflagdeals.com/archive/index.php/t-292633.html

 

are there any other banks (if this is true) that offer such incentives, because i believe, though it may not be correct, but that a professional student line of credit would be much more "nicer" to me, as they have the habit of givin out 100k's for professional programs, whereas i would be askin for 2-5k, so perhaps no cosign involved here?

 

IF someone could verify this, i would be so fricken happy.

 

*edit* it probably was referring to individuals pursuin masters/phd in eng field...because it seems too good to be true

[hking03]

visa is a specific type of credit card.

 

don't use credit cards to pay for school/living expenses. the interest rate is far too high.

 

with lines of credit you only pay interest on what you use. typically, the interest depends upon the bank, your credit and relationship with said bank.

 

expect something around the 8% +/- 2%

 

let's say you use 1000.00 of a 5000.00 loc in one month... you would then be charged 8% annual interest divided by 12 (to make it a monthly payment) or about 7.00 in interest that month. with most loc's you have to make a minimum payment of x amount of dollars (the bank sets this out) or a payment to cover the interest... usually it is the greater of the two numbers. if you don't pay this every month it will impact your credit and could possibly force the bank to collect the loc and end the agreement with you.

 

i doubt you will be able to get a loc without someone to cosign... fact of life. banks don't want to lend money out to people with no credit, especially unsecured loans.

 

if i were you, i'd ask mom or dad or an older family member to cosign with you. otherwise, you probably will not be able to get the loan.

 

good luck.

 

http://www.rbcroyalbank.com/products/personalloans/rcl_for_students_pro.html

 

that is the updated info on rbc's program. looks like engineering is considered in the professional loc category so you may qualify without a cosigner. it's still entirely dependent upon what the bank feels like giving you, and that is typically based on credit scores...

 

also, i would anticipate them giving you in the neighbourhood of maximum 40k (10k per year) for engineering as the cost of tuition isn't that much higher and it is still a bachelor's degree.

 

again, good luck.

[astrogirl]

You'll still be charged interest if you pay the minimum amount, you just won't be charged late fees. I only put things on my credit card if I'm going to pay the balance in full every month. Credit cards usually have the highest interest rates of any money you borrow. Usually around 20%, sometimes more. If you can get a line of credit (you'll almost certainly need a cosigner, but hopefully it won't be too big of a deal for your parents to cosign since it seems like you only need a small amount), use that because the interest will be lower. It's still a good idea to get a credit card because you can use it to buy things on line or for emergencies, but you should always pay your balance in full every month if at all possible, even if you use your LOC to pay it because at least your LOC will have a better interest rate.

[hking03]

You'll still be charged interest if you pay the minimum amount, you just won't be charged late fees. I only put things on my credit card if I'm going to pay the balance in full every month. Credit cards usually have the highest interest rates of any money you borrow. Usually around 20%, sometimes more. If you can get a line of credit (you'll almost certainly need a cosigner, but hopefully it won't be too big of a deal for your parents to cosign since it seems like you only need a small amount), use that because the interest will be lower. It's still a good idea to get a credit card because you can use it to buy things on line or for emergencies, but you should always pay your balance in full every month if at all possible, even if you use your LOC to pay it because at least your LOC will have a better interest rate.

 

i'll add to that idea of paying a cc with your loc.

 

if you use your credit card, pay it off in full with your loc and have monthly deposits go into your account as payments and then withdrawal those amounts each month through day to day use... you technically never make a payment on anything, but you get a lower interest rate... the downside is that it's technically a scam so you have to be careful.

 

[The Ace of Spades]

i'll add to that idea of paying a cc with your loc.

 

if you use your credit card, pay it off in full with your loc and have monthly deposits go into your account as payments and then withdrawal those amounts each month through day to day use... you technically never make a payment on anything, but you get a lower interest rate... the downside is that it's technically a scam so you have to be careful.

 

 

You lost me there. Nothing wrong with paying off a credit card with a LOC! And you would be making payments anyways, just into your LOC instead.

[testing123]

i'll add to that idea of paying a cc with your loc.

 

if you use your credit card, pay it off in full with your loc and have monthly deposits go into your account as payments and then withdrawal those amounts each month through day to day use... you technically never make a payment on anything, but you get a lower interest rate... the downside is that it's technically a scam so you have to be careful.

 

 

thank you, but i believe the cc is a big "no no" for me. But after reading your comment, it becomes VERRRRY TEMPTING to do so and let me explain why. Essentially as soon as i graduate, i will need a massive loc to pay off all the osap because of its high interest rate, and in return osap rewards w/ a large tax credit/forgiveness of some of the loan (atm, i forget how osap rewards you if u pay your loan back asap, but whatever it may be, i can atleast recall that its very, mutually benefiting).

 

But to be able to receive that (loc of 28.8K), i would require a good credit rating. Now hopefully, and i pray, that i get pooled into the "professional loc", then it becomes very manageable to do essentially what you said. Making purchases w/ cc, then usin LOC to pay it off in full amounts, and in return receiving a good credit rating.

 

But theres a problem with that:

1) after Beng, im not goin to the engineering field, instead i will be attending med school, so i will be requirin only more professional loc's, which would mean i could do the same method all over again to raise my credit rating (i.e. purchase with cc, then pay in full with loc). And in reality, i would most likely be making much larger purchases whilst in med school, so for example in undergrad, i would be expending 2k max annually, and the purchase would be made through the cc, with the full amount in the end of the month paid for by using the loc, but relatively, in med school the expenditure (amount i would use) would run as a high as 25-50k per year, and if i were to make those purchases using cc (which seems unlikely, to get a 50k limit cc for med student? i dont know, and remember i virtually have no whatsoever knowledge regarding these topics) but if i were to make the purchases through the cc, then paid in full using loc, my "increased" credit rating would be vast compared to what it would increase from using a cc to purchase 2-3k then paying it off with loc.

 

actually, i think i may have gotten this all wrong, will my credit rating even increase? and to be honest, i feel that i should let go off this bs with credit ratings, as theres just too much of: risk involved, tracking changes, facilitating payments and etc.

 

and also i dont see any other benefit, with the exception of a possible credit rating increase, to havin a cc to make purchases with, then payin the amount with your LOC, because in essence, your just payin with your LOC for the purchase, but perhaps there is a possible benefit to all this which i might be ignorant to?

[testing123]

You'll still be charged interest if you pay the minimum amount, you just won't be charged late fees. I only put things on my credit card if I'm going to pay the balance in full every month. Credit cards usually have the highest interest rates of any money you borrow. Usually around 20%, sometimes more. If you can get a line of credit (you'll almost certainly need a cosigner, but hopefully it won't be too big of a deal for your parents to cosign since it seems like you only need a small amount), use that because the interest will be lower. It's still a good idea to get a credit card because you can use it to buy things on line or for emergencies, but you should always pay your balance in full every month if at all possible, even if you use your LOC to pay it because at least your LOC will have a better interest rate.

 

thanks, i believe the cc is a big "no no" then.

 

The twist to my problem is that i need to get a loc without a cosigner. perhaps someone might know a bank, or a specific method to use to receive an unsecured student line of credit of relatively small amounts of 2-3k (annually). Tomorrow il be calling rbc for trying to apply for a professional student loc (eng is considered prof to them), but because this would be my first time dealing with finance and banking in general, is there anything i should know before i talk to the banker about this (i.e. the "to do's, and not to do's"?), or any other advice as to how to raise my odds of getting this loc without cosigner (e.g. try calling as many branches as possible (of the same rbc bank) to see if one will budge in)?

 

thanks

[astrogirl]

This might be getting away from the original topic a bit, but one important reason to have a credit card is that it's the only easy way to buy stuff online in Canada since we don't get those Visa or Mastercard debit cards like they do in the States. Supposedly there's some way to use your checking account with paypal, but I can't get it to work so I either use my credit card or use paypal with my credit card. You might not think you'll buy much stuff online, but I buy pretty much all of my textbooks and MCAT books and even just books for fun and stuff for my kindle on amazon, and I buy plane tickets online. I don't even know if there's a way to buy plane tickets offline anymore. And if you ever need to get a hotel room or rent a car, they require a credit card. I only know one adult without a credit card, and she has to use her dad's credit card to do all of those things and then pay him back, and even then that doesn't always work because if you need a hotel or rental car they usually want to see the actual card. So I wouldn't ever recommend just not having a credit card. You might decide that don't ever want to use it except when there's no alternative, but it's a useful thing to have. Just make sure you get one with no annual fee and that doesn't charge you a fee for not using it often enough if you aren't planning on using it routinely.

[astrogirl]

thanks, i believe the cc is a big "no no" then.

 

The twist to my problem is that i need to get a loc without a cosigner. perhaps someone might know a bank, or a specific method to use to receive an unsecured student line of credit of relatively small amounts of 2-3k (annually). Tomorrow il be calling rbc for trying to apply for a professional student loc (eng is considered prof to them), but because this would be my first time dealing with finance and banking in general, is there anything i should know before i talk to the banker about this (i.e. the "to do's, and not to do's"?), or any other advice as to how to raise my odds of getting this loc without cosigner (e.g. try calling as many branches as possible (of the same rbc bank) to see if one will budge in)?

 

thanks

 

The only thing I can think of to suggest is to make sure you're meeting with the person whose actual job it is to deal with professional student LOCs. If you just meet with any old loan specialist, they won't necessarily know what you are talking about and what you are eligible for. There should be a list somewhere on the RBC website of the people who do professional student LOCs in each city and you should call that person directly to make an appointment. And if you don't get anywhere with RBC, keep trying at other banks.

[testing123]

This might be getting away from the original topic a bit, but one important reason to have a credit card is that it's the only easy way to buy stuff online in Canada since we don't get those Visa or Mastercard debit cards like they do in the States. Supposedly there's some way to use your checking account with paypal, but I can't get it to work so I either use my credit card or use paypal with my credit card. You might not think you'll buy much stuff online, but I buy pretty much all of my textbooks and MCAT books and even just books for fun and stuff for my kindle on amazon, and I buy plane tickets online. I don't even know if there's a way to buy plane tickets offline anymore. And if you ever need to get a hotel room or rent a car, they require a credit card. I only know one adult without a credit card, and she has to use her dad's credit card to do all of those things and then pay him back, and even then that doesn't always work because if you need a hotel or rental car they usually want to see the actual card. So I wouldn't ever recommend just not having a credit card. You might decide that don't ever want to use it except when there's no alternative, but it's a useful thing to have. Just make sure you get one with no annual fee and that doesn't charge you a fee for not using it often enough if you aren't planning on using it routinely.

thanks will definitely get one while in med school, but potentially might end up needing it in 3rd/4th year of undergrad

 

P.s. I was on rbc's website, and they were offering me a visa (special edition for students). and on a small tangent, what exactly is a visa card? i know what a cc is, but ive never taken the time to appreciate how it differentiates from a visa card, and are master and visa cards the same thing btw?

[The Ace of Spades]

P.s. I was on rbc's website, and they were offering me a visa (special edition for students). and on a small tangent, what exactly is a visa card? i know what a cc is, but ive never taken the time to appreciate how it differentiates from a visa card, and are master and visa cards the same thing btw?

 

VISA and Mastercard are both credit card companies. Both work the exact same way and MOST places will accept either of them.

 

And astrogirl, I've actually been offered a debit card VISA from BMO when I applied for my LOC! I don't know how common they are in Canada yet but they are coming!

[astrogirl]

And astrogirl, I've actually been offered a debit card VISA from BMO when I applied for my LOC! I don't know how common they are in Canada yet but they are coming!

 

Oh, awesome! That is very exciting. I miss having one of those.

[DocT7]

This might be getting away from the original topic a bit, but one important reason to have a credit card is that it's the only easy way to buy stuff online in Canada since we don't get those Visa or Mastercard debit cards like they do in the States. Supposedly there's some way to use your checking account with paypal, but I can't get it to work so I either use my credit card or use paypal with my credit card. You might not think you'll buy much stuff online, but I buy pretty much all of my textbooks and MCAT books and even just books for fun and stuff for my kindle on amazon, and I buy plane tickets online. I don't even know if there's a way to buy plane tickets offline anymore. And if you ever need to get a hotel room or rent a car, they require a credit card. I only know one adult without a credit card, and she has to use her dad's credit card to do all of those things and then pay him back, and even then that doesn't always work because if you need a hotel or rental car they usually want to see the actual card. So I wouldn't ever recommend just not having a credit card. You might decide that don't ever want to use it except when there's no alternative, but it's a useful thing to have. Just make sure you get one with no annual fee and that doesn't charge you a fee for not using it often enough if you aren't planning on using it routinely.

 

I've had a credit union debit Mastercard for years! The best thing ever... Also, just so people know, you can buy plane tickets in person at the airport or through travel agents. But yes, agreed, things are must easier with a credit card number (whether it be real credit or not).

[naspec]

IIRC RBC's "professional student" line of credit for engineering, etc is not the same as their medical/dental student line of credit. Keep an eye out for that. I was in almost your exact financial situation a couple of years ago when starting undergrad, and I never needed to take out a line of credit; i.e. OSAP + Scholarships/Bursaries + work-study program + working during the summer was enough to meet my needs (and then some).

[testing123]

IIRC RBC's "professional student" line of credit for engineering, etc is not the same as their medical/dental student line of credit. Keep an eye out for that. I was in almost your exact financial situation a couple of years ago when starting undergrad, and I never needed to take out a line of credit; i.e. OSAP + Scholarships/Bursaries + work-study program + working during the summer was enough to meet my needs (and then some).

 

 

thanks for the info, they wouldn't supply eng's with 150-200k. But in terms of not taking line of credit, unfortunately, i feel (i.e. acknowledge) that i won't have time on my hands to do part time work whilst self studying an entire different curriculum (im referring to prep premed courses) during the summer, but nevertheless i still hold those capable of doing so in high regard. Also, if you dont mind me asking, because you've been through this, what did you do with your Education, Tuition, and Textbook Tax Credit?

 

I would be receiving about $2,600, but im not sure in essence what it "means", and how to go about "cashing" it. I have read some info on the osap website, and it appears to dictate that these "Credits" are transferable to another close family member, so if i were to transfer it to my parents/siblings income tax application, would they in turn, not have to pay $2,600? And then this cycle could be repeated for the next years?

[testing123]

Oh, awesome! That is very exciting. I miss having one of those.

 

astro, from the looks of it, i would need a cc, as online shopping is more than a luxury in a small city, but i have an earliar question that wasn't answered, perhaps you could give it a go. If i were to receive a student line of credit, and a cc, and made the purchases off my cc, but paid at the end of every month using my LOC, would that "boost" or "improve" or even have any impact on my credit rating?

 

thanks.

[hking03]

astro, from the looks of it, i would need a cc, as online shopping is more than a luxury in a small city, but i have an earliar question that wasn't answered, perhaps you could give it a go. If i were to receive a student line of credit, and a cc, and made the purchases off my cc, but paid at the end of every month using my LOC, would that "boost" or "improve" or even have any impact on my credit rating?

 

thanks.

 

Your credit rating is tied to many things.

 

Credit card payments being one of those things.

 

If you pay your credit card payment each month that's really all that matters.

 

If you pay with your loc then you have to make a payment on that... Otherwise that will impact your credit rating.

 

If you make your payments on time and for more than the minimum and don't miss your payments then you'll only help your credit rating.

[testing123]

Your credit rating is tied to many things.

 

Credit card payments being one of those things.

 

If you pay your credit card payment each month that's really all that matters.

 

If you pay with your loc then you have to make a payment on that... Otherwise that will impact your credit rating.

 

If you make your payments on time and for more than the minimum and don't miss your payments then you'll only help your credit rating.

 

Thanks.....