Lines of Credit for Medical Students (Scotia is the best option)

[amichel]

exactly, which means the promise is not binding - I mean that is ok, I just don't want anyone thinking they should go with Bank A because they think there is a guarantee that in fact does not really exist.

 

and on some level if they are implying there is then they are simply lying to you or are not informed of their own products. Either way that is something I don't like

 

Exactly. Some people seem to think that RBC guarantees it but Scotia doesn't, which isn't true, I don't think.

[Sarvish]

Scotia offered me $200k for 3 years of med school and said I'd need to apply if I wanted the extra $60k in residency. Is this normal or do they usually guarantee all 260k upfront? I'm 99.9% sure I won't need the extra amount but figure it's better to be have it just in case.

[amichel]

Scotia offered me $200k for 3 years of med school and said I'd need to apply if I wanted the extra $60k in residency. Is this normal or do they usually guarantee all 260k upfront? I'm 99.9% sure I won't need the extra amount but figure it's better to be have it just in case.

 

That's normal, as far as I know. It's the main difference between scotia and rbc.

[rmorelan]

Scotia offered me $200k for 3 years of med school and said I'd need to apply if I wanted the extra $60k in residency. Is this normal or do they usually guarantee all 260k upfront? I'm 99.9% sure I won't need the extra amount but figure it's better to be have it just in case.

 

you have to apply for it but that is just a spot check and they hand it out. Never seen it declined

[shady]

exactly, which means the promise is not binding - I mean that is ok, I just don't want anyone thinking they should go with Bank A because they think there is a guarantee that in fact does not really exist.

 

and on some level if they are implying there is then they are simply lying to you or are not informed of their own products. Either way that is something I don't like

 

Exactly that. The guy at Scotia said that while the fine print says it can change, the chances of it actually happening are slim to none. But it's important to mention that the fine print says it can happen, and I believe all banks have similar terms on their contracts.

 

As for prime changing... that's bound to happen sooner or later.

[ikillreid]

275k*.

 

The lady I talked to said they give it to every resident that requests it, basically (barring major credit issues, I suppose). Furthermore, they usually just give all 75k at once because that's just easier at that point. (I had asked whether it was 15k per year, such that it'd be contingent on type of specialty)

[rmorelan]

275k*.

 

The lady I talked to said they give it to every resident that requests it, basically (barring major credit issues, I suppose). Furthermore, they usually just give all 75k at once because that's just easier at that point. (I had asked whether it was 15k per year, such that it'd be contingent on type of specialty)

 

yeah they often just dump out the 75K at once - often people use it to absorb your osap at exactly that point (LOC interest is lower then osap which you have to start paying once you hit residency)

[lokiki]

glad you are trying to learn - ha, we all can learn more.

 

There are a lot of basic finance books that can help If everyone read just one of them we would all be a lot better off.

 

Could you recommend one? I know I'll be less busy this summer than I will be for the rest of my life.

[MD2015]

I think with your considerable life experience, you will be fine! Just enjoy the summer, there will be only 2 summers more for the rest of your life, until retirement that is.

[leviathan]

yeah they often just dump out the 75K at once - often people use it to absorb your osap at exactly that point (LOC interest is lower then osap which you have to start paying once you hit residency)

Your OSAP interest is tax deductible, but the way I had calculated it you would still save more money by paying it off with your LOC. That said, I met with my financial advisor through MD Management and she seemed to think that it was a better idea to keep the student loan, but I didn't have time to ask her why.

[rmorelan]

Your OSAP interest is tax deductible, but the way I had calculated it you would still save more money by paying it off with your LOC. That said, I met with my financial advisor through MD Management and she seemed to think that it was a better idea to keep the student loan, but I didn't have time to ask her why.

 

It can be in some cases - if you are using the resident interest relief program for instance.

 

Also the interest rate matters - right now the tax deduction is a fixed percentage of the rate but the interest rate itself is tied to prime. Unlikely but if prime rose high enough for some loans then the balance would swing towards keeping the OSAP loan.

 

Lastly you consume the LOC room - for some it would be better to have the flexibility of say 50K more on the LOC for emergencies vs perhaps getting close to maxing it out.

 

I am not seeing any other reasons and except for the first on I don't think those reasons are very strong.

[Sarvish]

Just out of curiosity, how'd you guys fare with TD? They submitted an application at a lowered amount because I was at Mac and it still got declined because I didn't have enough credit history.

[rmorelan]

Just out of curiosity, how'd you guys fare with TD? They submitted an application at a lowered amount because I was at Mac and it still got declined because I didn't have enough credit history.

 

Try another bank - you are getting the wrong answer.

[Sarvish]

Try another bank - you are getting the wrong answer.

 

I've already got it nearly fully set up with Scotia, just going in to sign the papers but I was surprised at TD's answer.

[MD2015]

Competition has its own rewards.

[rmorelan]

I've already got it nearly fully set up with Scotia, just going in to sign the papers but I was surprised at TD's answer.

 

I am as well a little but I have seen that from TD before - seems less well centralized than the others, and not as standardized. Pity of course because we all want the max competition possible which means all the banks would be on board.

[alpaca]

Just out of curiosity, how'd you guys fare with TD? They submitted an application at a lowered amount because I was at Mac and it still got declined because I didn't have enough credit history.

 

TD approves/rejects applications for LOCs based on the applicant's credit score, which includes payment history, credit utilization, and length of credit history. TD requires a relatively high credit score in order to be approved for a LOC without a co-signor.

 

In contrast, Scotiabank approves/rejects applications for LOCs based on the applicant's credit delinquencies (i.e., missed payments), not on overall credit score, which is why it's easier to get approved with them than TD.

 

I'm not sure about RBC or other banks.

[CIBC_Professional Edge]

In contrast, Scotiabank approves/rejects applications for LOCs based on the applicant's credit delinquencies (i.e., missed payments), not on overall credit score, which is why it's easier to get approved with them than TD.

 

Actually, Scotia does take credit score into account, though it's less of a weighting than TD. Scotia has an internal rating system that weighs credit score, net worth, age, recent delinquencies, etc. into a grade.

[alpaca]

Actually, Scotia does take credit score into account, though it's less of a weighting than TD. Scotia has an internal rating system that weighs credit score, net worth, age, recent delinquencies, etc. into a grade.

 

I know that you used to work for Scotiabank, but do you think it's possible that their approach has changed? I spoke with a Small Business Advisor from Scotiabank last week who said that repayment history is the only variable they take into account, and that they do not care about credit score at all. Perhaps this advisor was mistaken?

[CIBC_Professional Edge]

I know that you used to work for Scotiabank, but do you think it's possible that their approach has changed? I spoke with a Small Business Advisor from Scotiabank last week who said that repayment history is the only variable they take into account, and that they do not care about credit score at all. Perhaps this advisor was mistaken?

 

Well I am hesitant to contradict someone, but that would have to be a fairly recent change. Unless the advisor is also a student specialist, I would say that they were mistaken unless they were emphasizing the weighting that repayment history plays.

 

For instance, I would think that there's no way they would provide a loan to a student who declared bankruptcy 3 years prior but had kept up excellent repayment history from that point.

[boysneutral]

Just out of curiosity, how'd you guys fare with TD? They submitted an application at a lowered amount because I was at Mac and it still got declined because I didn't have enough credit history.

 

I went with TD, and at first it was a huge mess because they didn't understand mac's shorter program as well. Also they wanted a cosigner for the full 250k. I just sent an email to the area manager for Hamilton, who called the financial advisor from my branch (in Alberta). In the end I got the full 250 with no cosigner, as well as no fees and the aeroplan infinite visa.

[Med2018__]

What rate are you guys getting at TD and other banks? I asked and it looks like TD and BMO offer Prime+1 but Scotia and RBC at Prime.

If that is the case, why would anyone go with TD in the first place? There is also a chance that the TD person i talked was misinformed me.

[rmorelan]

What rate are you guys getting at TD and other banks? I asked and it looks like TD and BMO offer Prime+1 but Scotia and RBC at Prime.

If that is the case, why would anyone go with TD in the first place? There is also a chance that the TD person i talked was misinformed me.

 

TD will go to prime for sure.

 

Again this is my main issue with that bank - they just seem to have different responses to people asking for the same thing all over the place. Varying amounts, varying rates, varying requirements of co-signers. This isn't supposed to be luck. In the end it is one bank, one product and it should be consistency applied.

 

Once you get through all the static the TD loan itself seems similar to others.

[Hockeynut]

TD will go to prime for sure.

 

Again this is my main issue with that bank - they just seem to have different responses to people asking for the same thing all over the place. Varying amounts, varying rates, varying requirements of co-signers. This isn't supposed to be luck. In the end it is one bank, one product and it should be consistency applied.

 

Once you get through all the static the TD loan itself seems similar to others.

 

I imagine the lack of specialists helps to create this issue. When a normal "banker" needs to be up on all products can only result in inconsistencies. The same sort of thing happened to me, hence I went with another bank.

[futurefamilydoc]

I imagine the lack of specialists helps to create this issue. When a normal "banker" needs to be up on all products can only result in inconsistencies. The same sort of thing happened to me, hence I went with another bank.

 

The current system definitely isn't ideal. It shouldn't be too difficult for each bank to provide one person at each branch with a simple concise document outlining how the LOC's work (would be helpful for those who live far from the big cities), or alternatively tell the branches they should only refer students to their specialists at the major branches. The way it works now can be somewhat confusing, and definitely doesn't provide the most convenient service.