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

[JohnGrisham 1,756]

is there any advantage to going with MD financial over say TD or something? the only difference I noted was that you don't need to make the monthly interest payments until the start of residency.

Of course you have to make interest payments.

 

Every bank loan has interest payments as soon as you withdraw money from it.

[Dr Strange Love 1]

Does anyone know if you can still get the whole 275k with a 3 year program like Mac or Calgary?

[rmorelan 2,594]

Does anyone know if you can still get the whole 275k with a 3 year program like Mac or Calgary?

 

you can - which is important as the LOC has a purpose long after medical school is done for many people. 

[Goku 105]

I met with Scotiabank today and they said that the interest rate will revert back to prime when I enter repayment (after med school, residency, and 12 month grace period). Other banks have told me that the interest rate will remain at prime minus 0.25% during repayment.

[Casey@MDFinancialManagemen 30]

Student Loans are your best bet during Medical School since you don't have any interest accumulating while you are in school.  Interest on a LOC accumulates the minute you take money out.  Where the difference in LOC's lie, is that some you need to make monthly payments and some capitalize the interest (meaning they tack it on to your balance).

 

 The Prime + 2.5% references student loans interest rates once you are in repayment, in most time during residency.

 

And as for the comment on Financial Planning / Budgeting, you can do that with MD even if your line of credit is elsewhere.   We are owned by CMA and it is part of your membership benefits with the Canadian Medical Association.

[noneed2live 24]

Can someone please explain to me what the prime interest rate refers to? So for e.g. I read the U of T Prime interest rate is 2.5%, so does that mean for example if I end medica school with $100,000 in debt from my LOC, every year I must pay that + 2.5% of 100,000? 

 

Also what is prime minus? 

[rmorelan 2,594]

Can someone please explain to me what the prime interest rate refers to? So for e.g. I read the U of T Prime interest rate is 2.5%, so does that mean for example if I end medica school with $100,000 in debt from my LOC, every year I must pay that + 2.5% of 100,000? 

 

Also what is prime minus? 

 

No worries - it can be confusing in the beginning. 

 

Prime rate is the interest rate benchmark a bank sets its loans against. it is tied very closely to a rate that the Bank of Canada controls called the overnight rate (details don't matter right now). In theory each bank could have a different prime rate but competition between banks makes them effectively the same. 

 

One key point - the prime rate can change, and when it does so does the amount on interest you will have to pay. 

 

In theory the prime rate was supposed to be the lowest interest rate the bank would offer. In rare circumstances - which seems to now apply to us - the bank will give us a rate even lower than prime. That is an amazing rate to say the least. 

 

If your LOC is at prime, and that bank's prime rate is 2.5%, and you owe 100,000 then you are absolutely right - you will have 2500 in interest a year (slightly wrong due to compounding but close enough). 

 

Right now you should aim for prime -0.25% which seems to be what is going around. My bank's prime is 2.7% right now, and I am at prime -0.25% so my interest rate on my loan is 2.45%. 

[itsmemario 26]

You can also negotiate for other cards..such as Infinite Momentum Visa/AmEx combo or Infinite Momentum/ScotiaGold which are great combos imo

 

were you able to get the momentum VISA/Amex combo? I was told by a scotia rep that I can't get the amex gold with a momentum without paying a fee for the momentum. 

[MHCClassII 21]

What happens to the LOC if one goes unmatched?

[PulsusParadoxus 46]

were you able to get the momentum VISA/Amex combo? I was told by a scotia rep that I can't get the amex gold with a momentum without paying a fee for the momentum.

I talked to my advisor today and asked about the momentum visa. He told me that their system, for whatever reason won't allow him to put a fee waiver on the momentum card. I decided on just keeping the Passport Visa and not bothering with the AMEX card.

[MandemMD 7]

Honestly, 

 

Thank you to pm101 for helping the mandem out. You all are so great. This sharing of information takes the power away from the banks and puts back in our hands. They were trying to play your boy at TD.. I'm going to walk back in there and ask them to put some respeck on name. 

[rmorelan 2,594]

What happens to the LOC if one goes unmatched?

 

nothing really (assuming you are attempting to match in the future). 

 

the banks are reasonable about that sort of thing. Plus at many places the school already will enroll you in a 5th year to allow you access to the hospital etc which means you are still a medical student. 

[MandemMD 7]

When I got my loc four years ago they required a letter of enrollment which the university doesn't provide until August. I found a Scotiabank rep in Hamilton who was fine with releasing the funds with just the offer letter and drove over to set up my loc there. I transferred to a rep in Toronto last month just because I'm going to be here for residency and it's more convenient to have someone I can easily meet face to face with.

What was the name of your rep?

[FrankTheTank 64]

I met with Scotiabank today and they said that the interest rate will revert back to prime when I enter repayment (after med school, residency, and 12 month grace period). Other banks have told me that the interest rate will remain at prime minus 0.25% during repayment.

 

Had my meeting with Scotia today. They said the prime - .25 would continue on into repayment and it wouldn't need to be converted into a term loan (they said this was a recent policy change). They also offered me $200k during med school + $75k for residency vs. the $275k for med school from TD.

 

Strangely, I would also be dealing with 2 advisors at Scotia (1 for the LOC, 1 for the bank account/cc's). Is there even any advantage to that?

[bonappetit 0]

Had my meeting with Scotia today. They said the prime - .25 would continue on into repayment and it wouldn't need to be converted into a term loan (they said this was a recent policy change). They also offered me $200k during med school + $75k for residency vs. the $275k for med school from TD.

 

Strangely, I would also be dealing with 2 advisors at Scotia (1 for the LOC, 1 for the bank account/cc's). Is there even any advantage to that?

 

Is it a usual case for the same bank to give different offers depending on the province it's located in? I thought it would be generally universal 

[rmorelan 2,594]

Had my meeting with Scotia today. They said the prime - .25 would continue on into repayment and it wouldn't need to be converted into a term loan (they said this was a recent policy change). They also offered me $200k during med school + $75k for residency vs. the $275k for med school from TD.

 

Strangely, I would also be dealing with 2 advisors at Scotia (1 for the LOC, 1 for the bank account/cc's). Is there even any advantage to that?

 

No real advantage - it is just how they happen to organize things. Mostly you would be dealing with the LOC adviser anyway I think (I mean the accounts once set up are pretty stable). 

[rmorelan 2,594]

Is it a usual case for the same bank to give different offers depending on the province it's located in? I thought it would be generally universal 

 

usually - but I would think right now with a new policy (the -0.25%) there is going to be some shake down stuff which will all work out in the end. 

[Goku 105]

Had my meeting with Scotia today. They said the prime - .25 would continue on into repayment

Oh! That's great then although it is very annoying that what you're offered is branch dependent. Looks like I'll be getting back in touch with Scotia to see if this feature is available for me.

[PhoenixFlare500 25]

On 5/10/2017 at 8:22 AM, Scotiabank_McMaster said:

Hi everyone,

 

I just wanted to post a quick reminder to graduating classes that the time to consolidate your Government Student loans is coming soon, as a refresher our LOC is a 275,000 Limit with an extremely competitive interest rate.. if your LOC limit is not 275,000 please feel free to reach out to me!

 

Thanks

Josh Campbell

T 905-627-9211 4301

E Joshua.Campbell@scotiabank.com

Just wanted to get some clarification here, I keep seeing people post about prime -0.25% or prime -0.5% but then saw someone say that after they sign up for this the interest rate can go up past prime at a later time. What's your take on this?

I'm also leaving this open to other bank representatives obviously since we're not favoring one over the other, just favoring the particular deals they might offer.

Oh also what's the deal with these free speakers? Are they worth $20 or $250, and more importantly am I still eligible for them?

Edited May 31, 2017 by PhoenixFlare500

[ArchEnemy 133]

15 hours ago, PhoenixFlare500 said:

Just wanted to get some clarification here, I keep seeing people post about prime -0.25% or prime -0.5% but then saw someone say that after they sign up for this the interest rate can go up past prime at a later time. What's your take on this?

I'm also leaving this open to other bank representatives obviously since we're not favoring one over the other, just favoring the particular deals they might offer.

Oh also what's the deal with these free speakers? Are they worth $20 or $250, and more importantly am I still eligible for them?

Seems like they are worth $250... Ditto I am trying to figure out if existing customers are eligible for these. Chances are slim though.

[Sauna 548]

Ugh I wish I got back all the money I spent on stupid shit lol

[seventeenfour44 15]

Hey everyone

I'm very new to this and I read the last several pages on this thread - super helpful! I still had a few general questions:

- Lets say I'm choosing between banks, which all offer prime - 0.25. What is the next thing(s) I should be considering to ensure I get the best deal?

- This may be a stupid question, but what does it mean when the LOC converts to a 'professional LOC' or 'loan' after a specific grace period?

Thank you !!

[Snowmen 601]

23 hours ago, seventeenfour44 said:

Hey everyone

I'm very new to this and I read the last several pages on this thread - super helpful! I still had a few general questions:

- Lets say I'm choosing between banks, which all offer prime - 0.25. What is the next thing(s) I should be considering to ensure I get the best deal?

- This may be a stupid question, but what does it mean when the LOC converts to a 'professional LOC' or 'loan' after a specific grace period?

Thank you !!

A loan isn't flexible and has to be refunded. A LOC is much more flexible in terms of repayment options.

You should look at some of the perks like credit cards and the likes but unless they truly are terrible, the advisor himself is much more important than any perks or free speaker.

[moonlitocean 72]

Im dealing with TD right now and they are asking for an official letter of enrolment before they proceed with my LOC application, does anyone know if/when medical schools issue the confirmation of enrolment?

[rosetta123 5]

Does anyone have any insight on the different banks and repayment after residency vs. fellowship? I thought I saw that one of them offered it after fellowship but I'm having trouble finding which one that is...