Best LOC?

[holiday1001]

my RBC agreement doesn't mention this +3.49%. just to confirm, your scotia one has in writing that during repayment the interest is still at prime?

[bordeaux]

my RBC agreement doesn't mention this +3.49%. just to confirm, your scotia one has in writing that during repayment the interest is still at prime?

 

My Scotia docs DO say repayment at prime.

[Dr.Henderson]

my RBC agreement doesn't mention this +3.49%. just to confirm, your scotia one has in writing that during repayment the interest is still at prime?

 

Mine neither. Generally they want our business long-term, the last thing they want is to irritate us by not being able to compete with the repayment terms of another bank and then lose us to them.

 

Further differences: My RBC banking is all unlimited and zero fees for the entirety of school + residency. I guess it depends on who you talk to... most reps don't want to lose your business over something trivial like transaction limits. I use my visa anyways and then just pay it off right away, may as well get as many points as possible

[future_doc]

My Scotia docs DO say repayment at prime.

 

This is gold to us all. I will seriously consider switching to Scotia. We all should! And then, the other banks will change their tune overnight.

[cnb88]

my RBC agreement doesn't mention this +3.49%. just to confirm, your scotia one has in writing that during repayment the interest is still at prime?

 

Yes- scotia has it in writing on my agreement that interest will remain at prime throughout the term of the loan (including repayment). Unless it says the same on your RBC agreement they can add whatever they want. Right now the loan officer I talked ro at RBC said it was currently at 3.49% but it changes/fluctuates. Unless I know exactly what I'm getting into, I don't sign.

 

Also.... RBC does not match interest at prime during repayment because I flat out said what Scotia offered me and that I'd sign with them unless RBC guaranteed that to me. They couldn't. So I walked.

[Dr.Henderson]

Interesting! If Scotia ends up matching the limit and flexibility of RBC I'll switch, or perhaps by the time that happens RBC will offer prime throughout repayment. Either way is fine. Banks never seem to be outmatched in any particular area for an extended period of time. Repayment is 6-10 years away, so I'll ponder on it and see what develops. RBC suits my needs best for the time being, I'm a non-trad with a family to support though.

 

I'd be more concerned if we were dealing with bigger numbers I guess. A few grand a year difference isn't a major deal breaker on a physician's wage. I don't know about most, but I'm planning on demolishing that LOC debt within the first few years out of residency (moo's post on efficiently paying down debt fast are quite informative if you seek them out). I don't like having debt so I pay it off as quickly and efficiently as I can before I spend anything extra.

[zeroNINE]

So this is a reply to your question about the RBC loan, but it's also info and advice for everyone else too

 

I just signed with Scotia (after talking to RBC). Scotia offered me free banking (unlimited transactions), a free gold visa passport (took the momentum cashback instead), NO repayments during med/res/fellowship (any interest payments flip onto the LOC if that makes any sense), one year after med/res/fellowship the loan goes into repayment- at prime. My loan is guaranteed to be at prime for however long it takes me to pay it off. They only give you access to 50k/year (so max of 200k) (however if you only use 20k in year one, you still have access to the 80k in year 2 that would make up 100k) but they may negotiate on that. During res/fellowship, they'll give you 15k/yr to a max total of 275k. There were 2 major stipulations Scotia had: 1) that if you had a credit card with another bank, that it would be closed or that amount would be deducted from the total LOC (so I have a westjet MC with 1k limit- my LOC is for 199k instead of 200k) and 2) that the total of your student loans PRIOR TO being accepted for the LOC is less than 60k. If it's more than 60k, then they deduct the difference- ie 63k in government loans from your UG/masters would mean you'd only get 197k total. They said they don't care about student loans after the fact (ie during med) just what you come in with prior. Basically, they don't want you to be swimming in debt when you're done med, they want you to be able to easily pay it all off when all is said and done...

 

(Didn't want to quote the entire thing again)

 

Just wanted to say THANK YOU for this awesome post and for those that disclosed their LOC agreements. I'm doing the application and signing it in about two weeks and I'm probably heading to Scotia as well. I really want to raise the credit card limit so that I can pay tuition using it, get cash back, and use the LOC/gov't loan to pay off the credit card.

[holiday1001]

which schools let you pay by credit card?

[lostintime]

I think it's more about who's available at your local branch more so than the exact bank (very similar programs, RBC the most flexible).

 

If you dislike the people you work with, and there's only a limited number of them and on top of all the stress, you can't deal with more cranky/ridiculous people, then seriously the minor differences are NOT worth it. I switched to RBC because of these issues and I'm extremely happy after and even if things change down the road, I don't regret if because I'm staying in the city long enough and last thing I need is more cranky people (get enough of it at work lol).

[future_doc]

A few grand a year difference isn't a major deal breaker on a physician's wage.

 

I don't know where you come from but a few grand here and a few grand there will cover my future kids' undergrad tuition - so I won't be giving any bank extra money just b/c I can supposedly afford it. And if I want to give money away, it will be for worthy charitable endeavours and not to our wealthy financial institutions.

[aquablue]

So this is a reply to your question about the RBC loan, but it's also info and advice for everyone else too

 

I just signed with Scotia (after talking to RBC). Scotia offered me free banking (unlimited transactions), a free gold visa passport (took the momentum cashback instead), NO repayments during med/res/fellowship (any interest payments flip onto the LOC if that makes any sense), one year after med/res/fellowship the loan goes into repayment- at prime. My loan is guaranteed to be at prime for however long it takes me to pay it off. They only give you access to 50k/year (so max of 200k) (however if you only use 20k in year one, you still have access to the 80k in year 2 that would make up 100k) but they may negotiate on that. During res/fellowship, they'll give you 15k/yr to a max total of 275k. There were 2 major stipulations Scotia had: 1) that if you had a credit card with another bank, that it would be closed or that amount would be deducted from the total LOC (so I have a westjet MC with 1k limit- my LOC is for 199k instead of 200k) and 2) that the total of your student loans PRIOR TO being accepted for the LOC is less than 60k. If it's more than 60k, then they deduct the difference- ie 63k in government loans from your UG/masters would mean you'd only get 197k total. They said they don't care about student loans after the fact (ie during med) just what you come in with prior. Basically, they don't want you to be swimming in debt when you're done med, they want you to be able to easily pay it all off when all is said and done.

 

RBC: only offered me free student banking (25 transactions a month). I have an account there and investments, so I could have unlimited banking. If you want that and don't have investments, it would be $10.95, but they may have been willing to negotiate. After I told them the credit card Scotia offered, they offered me any card of my choosing for free (so I could have got the avion that people have been talking about here). It's 250k and they give it to you up front. They didn't mention anything about deducting other cards or student loans >60k. HOWEVER..... I was told that one year after res, the interest on the loan would be prime+3.49% (and the 3.49% fluctuates- it can be more or less). Just to put that into perspective- a person whose one year post-res grace period is up right now would be paying a total of 6.49% (prime is at 3% right now). It's not a lot atm, but when we're done res prime won't be at 3% anymore- it'll likely be at around 5% like it was prior to the recession (if not more). Meaning that you'd end up paying 8.49% (or more) interest on that 250k loan.

 

Now, I crunched some numbers (using resident pay from AB: http://www.para-ab.ca/agreement/collective-agreement/article23-remuneration):

 

Assuming I am in debt to the average amount (around 150k- I'd have a link to that number, but I don't feel like searching for that UBC document) this would be the amount I'd be able to pay back each year:

 

I budgeted 30k/yr for living/emergency expenses as a resident (living like a student but maybe a few more extras like a trip or 2 in there). This includes all fees/courses I may need to take. A first year resident in AB grosses 55k as of right now. Assuming because of school and various other things I have zero tax in first year because of tax credits etc, that leaves me with a decent 25k to pay towards my loan. My loan now sits at 125k after my first year of residency.

 

Second year, same expenses, except my pay is at 60k. Awesome. I'd probably have to pay some taxes now though... I'd be in the second tax bracket b/c I make more than 42k... so 15% of 42k is about 6k plus 22% tax on the remaining 18k... about 4k. Plus AB's tax of 10%- another 6k... So that's 16k in tax total off of the 60k... Let's say I have a bunch of deductions to take it down to 10k in taxes. That gives me a total of 50k after tax, minus my 30k living expenses... gives me 20k to pay down my loan. That leaves me with 105k after second year.

 

Now, if I just want to do FM, that's it. I have one year of grace before my loan would go into repayment with RBC. I'd have one year to pay off 105k of debt to avert prime+3.49% interest. If you go for a 3 year res, you'd be able to likely pay only another 20k or so off of your loan leaving you still with 85k to pay off. (please note I didn't factor in any accumulating interest in these calculations for ease of figuring, but it would be substantial. On one year of 150k, the accumulated interest would be $4500 at 3%).

 

One year after this, with both banks, the loan goes into repayment. You're likely not to be a super ballin' doc right out of res, so it's unlikely that you'll have the 85k paid off by the end of the year, meaning now you'd either be paying 3% with Scotia (assuming prime doesn't move) or 6.49% with RBC on whatever you have left. It may not make that much of a difference on first inspection... you might only have 50k on it after the first year (1.5k with scotia and $3245 with RBC) but there's a few things I haven't factored in in the expense calculations:

 

-marriage/wedding/honeymoon

-children/dependents

-emergencies

-babies/pregnancy

-down payment on a house/condo

-saving for retirement/investments

 

The down payment especially. In order to avoid going through CMHC for a mortgage (for a better mortgage rate/be able to go through banks/brokers), you'll need to have a 20% down payment... on an average home in Edmonton (since I've done all my calculations for AB), 380k (for a detached never mind attached), that would mean 76k you'd need to save up. Just to buy a house. And that 76k would be in addition to paying off the other 50k in loan you'd at minimum still have...

 

Which is why I chose to go with Scotia... it allows me to be able to save, at minimum (as all of my above numbers were ideal numbers) 1.5k a year in interest payments and thus be able to pay off my loan that much faster.

 

If you were planning on a longer residency, already married, and not planning to have kids, I could see where RBC may be a better option because the loan *may* be able to be paid off by the end of a 5 year residency if you continue to live like a student throughout.

 

 

Anyways... that's my long winded explanation of the quintessential difference between RBC and Scotia. The difference in interest can add up to a helluva lot- especially if you're saving up for a home, wedding, or baby or have other expenses that may come up. Also, since RBC only holds the prime rate until one year after res, if you have to do a fellowship, that interest will be at prime+3.49% when you aren't making the big bucks to pay it off.

 

 

I know I seem like I'm really pro Scotia here (which I suppose I am), but my point is: don't look at the minor details like credit card or little bonuses like that. Look at the big picture in the future- the interest. Go with whatever bank can GUARANTEE you IN WRITING what the interest rate will be once you're done med/res. If they won't disclose that to you, don't sign with them. (Obviously they can't guarantee what prime will be at, but they should be able to guarantee the prime+ X% whether X be 0, 1%, 2% or 3.49%). If they say that the +X% fluctuates, ask to see the historical fluctuations. Is it at its lowest now? What's the trend? Make sure you really inform yourself and read through the entire contract before you sign. If there's any information you want on that contract that isn't there, don't sign it because the banks only go by what's on that paper with your pretty little signature on it.

 

 

EDIT: Forgot to add (and can't find where I wrote it so it's going here) that the Gold Passport Visa that Scotia offers comes with 30 000 points. And you don't have to use it for travel, there's a lot of other things (gift certs, home appliances/extras, iPads, etc) that you can use it on too. Not just travel. Not sure if the Avion is the same.

 

Thanks for this! It was awesome. I'm going to sign with Scotia Bank for sure. Unless it says in paper that prime rate will be applied until repayment, I'm not signing it. Also, did and of you get the best momentum cashback card (the 4% cashback one)?

[lostintime]

I think it's important to think about your personal situation as well. If you're in a 5 year program, depending on your personal situation, it's likely you will finish paying off your loans during residency. Yes yes the whole who knows what will happen,, but that's why you buy disability insurance and all those things.

 

And really, it's not that hard to switch LOC, it's simple. If another bank doesn't offer similar ones, just switch, easy peasey. Or in my case, if a bank pisses you off enough, switch. I can't see Scotia (that everyone is promoting right now) refusing a new physician client when your residency is up and you run into problems. I definitely won't go back to them meh.

 

And really, loyalty means NOTHING to banks, they just want your money at the end of the day no matter all the b.s. they sugar-coat you with. Oh yeah, after reading some posts, seems people are having issues with RBC service. At the end of the day, I don't think should label banks with service. There's people with attitude problems and incompetent people who work at every bank. Unfortunate for you if you happen to run into some, but at least there are other banks around in your city (hopefully).

[Candiens12]

Im confused. My RBC rep told me that the interest on my loan would stay at prime during the repayment period. I have not seen the actual contract yet, is he just saying that to get me to sign or have there been instances of RBC keeping interest at prime? So far from this thread it only seems like Scotia that keeps interest at prime.

[aquablue]

Im confused. My RBC rep told me that the interest on my loan would stay at prime during the repayment period. I have not seen the actual contract yet, is he just saying that to get me to sign or have there been instances of RBC keeping interest at prime? So far from this thread it only seems like Scotia that keeps interest at prime.

 

I think RBC does give out occasionally prime throughout repayment. The tricky part is to see if they put it on paper. Scotia has it written on the contract. Before you sign, make sure that it says that on your RBC contract. Word of mouth means nothing contractually in the business and banking world unfortunately.

[Dr.Henderson]

I don't know where you come from but a few grand here and a few grand there will cover my future kids' undergrad tuition - so I won't be giving any bank extra money just b/c I can supposedly afford it. And if I want to give money away, it will be for worthy charitable endeavours and not to our wealthy financial institutions.

 

I meant this in the context of the LOC providing other benefits like increased flexibility in terms of access to funds and a higher overall limit, and therefore being worth some extra bucks- these are not just desirable LOC characteristics to me, they're necessities. Of course if you cherry pick that statement out of my post I'm going to look silly . No one should be wanting to throw money away.

 

Edit: I should note that I have current kids' needs to think of, not future kids- hence the reason I'm willing to pay an extra few grand (if that even ends up being the case, which I doubt it will).

[future_doc]

Understood.

[DreamingDent]

Thanks for the insightful info!

[MCATwannabe]

Didn't a Scotia Rep say that even Scotia doesn't have the fixed interest at prime during repayment on contract?

 

http://premed101.com/forums/showthread.php?p=724960#post724960

 

 

 

People, please check your facts.

[RaVen777]

I went with TD because I do the rest of my banking there. Not so happy with the way I have been treated since. They seem quite restrictive. I have not used my LOC yet (I worked for 3 years prior to med so I had some money saved up) so it is not that big of a deal at the moment. If I was going to survive off my LOC like many of my classmates do, TD would have been a very poor choice indeed.

[MCATwannabe]

I went with TD because I do the rest of my banking there. Not so happy with the way I have been treated since. They seem quite restrictive. I have not used my LOC yet (I worked for 3 years prior to med so I had some money saved up) so it is not that big of a deal at the moment. If I was going to survive off my LOC like many of my classmates do, TD would have been a very poor choice indeed.

 

TD has sub-par services. No joke.

I went there they wanted to give me prime +1 %, $200K and required a co-signor with 60K/year.

I'm glad they left.

 

 

Interestingly, they have started to racially discriminate against people with Iranian background, regardless of whether they are Canadian or not. They have been closing accounts based on "Sanctions for people in Iran", but these people aren't in Iran.

Anyway, I don't like TD.

[holiday1001]

Didn't a Scotia Rep say that even Scotia doesn't have the fixed interest at prime during repayment on contract?

 

http://premed101.com/forums/showthread.php?p=724960#post724960

 

 

 

People, please check your facts.

EXACTLY why I've been asking Scotia people what their contracts say. at least one user replied saying their agreement does say prime during repayment..

[MCATwannabe]

EXACTLY why I've been asking Scotia people what their contracts say. at least one user replied saying their agreement does say prime during repayment..

 

Someone need to quote that paragraph. So far we have contradicting information. One from a Scotia rep. And if anyone wants to sell their products, it's the rep. If the rep is not verifying it, I'm not sure if I was to trust what someone else says.

[aquablue]

Someone need to quote that paragraph. So far we have contradicting information. One from a Scotia rep. And if anyone wants to sell their products, it's the rep. If the rep is not verifying it, I'm not sure if I was to trust what someone else says.

 

Maybe the rep means that prime is never fixed? Prime rate is determined by the Bank of Canada and is subject to fluctuation. That I could understand. I'll contact my Scotia Bank rep.

[apache]

use your gov loc and then apply for a disability, no repayments after ten years... no more than 20 percent of your income... maxed at 150, interest is deductable... oi, i could go on forever, u can even get grants as a resident...

 

Interesting! If Scotia ends up matching the limit and flexibility of RBC I'll switch, or perhaps by the time that happens RBC will offer prime throughout repayment. Either way is fine. Banks never seem to be outmatched in any particular area for an extended period of time. Repayment is 6-10 years away, so I'll ponder on it and see what develops. RBC suits my needs best for the time being, I'm a non-trad with a family to support though.

 

I'd be more concerned if we were dealing with bigger numbers I guess. A few grand a year difference isn't a major deal breaker on a physician's wage. I don't know about most, but I'm planning on demolishing that LOC debt within the first few years out of residency (moo's post on efficiently paying down debt fast are quite informative if you seek them out). I don't like having debt so I pay it off as quickly and efficiently as I can before I spend anything extra.

[apache]

**** the rep, reps lie... check your contract, violating contracts by offering financial products they themselves prohibit.. so many boo boos...

 

Someone need to quote that paragraph. So far we have contradicting information. One from a Scotia rep. And if anyone wants to sell their products, it's the rep. If the rep is not verifying it, I'm not sure if I was to trust what someone else says.