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

[DrOtter]

1 hour ago, icymeia said:

Can anyone advise me on how to choose a bank? From what I can tell, the only difference is in credit cards and credit card perks (and possibly perks later on when the packages come out for this year), but being a newbie, I have no clue. Should I just talk to the advisors at each bank to get more information? Or can someone explained why they chose their bank (it seems like Scotiabank, RBC, and CIBC are equivalent)?

I picked Scotiabank because of the 350k given to you all at once (not that I'm going to blow through that in first year but nice to have the option lol). Credit card perks from Scotia is also slightly better than RBC (more intro points + an Amex card which is handy). Also I am a current RBC client so signing with Scotia gives me the rewards on the checking account. 

One thing that might not be important for other people but it is for me (psychologically speaking) is that for Scotia you don't have to make any payment until you finish residency, and even then you have to option of converting it to a physician LOC.

[icymeia]

24 minutes ago, DrOtter said:

I picked Scotiabank because of the 350k given to you all at once (not that I'm going to blow through that in first year but nice to have the option lol). Credit card perks from Scotia is also slightly better than RBC (more intro points + an Amex card which is handy). Also I am a current RBC client so signing with Scotia gives me the rewards on the checking account. 

One thing that might not be important for other people but it is for me (psychologically speaking) is that for Scotia you don't have to make any payment until you finish residency, and even then you have to option of converting it to a physician LOC.

 

Can I PM you?

[DrOtter]

2 hours ago, icymeia said:

Can I PM you?

Yeah sure! 

[ontariopremed]

18 hours ago, icymeia said:

Can anyone advise me on how to choose a bank? From what I can tell, the only difference is in credit cards and credit card perks (and possibly perks later on when the packages come out for this year), but being a newbie, I have no clue. Should I just talk to the advisors at each bank to get more information? Or can someone explained why they chose their bank (it seems like Scotiabank, RBC, and CIBC are equivalent)?

most banks offer the same basic stuff - the main thing is to make sure you are getting prime minus 0.25% for your variable interest rate. I am with TD currently so i decided to stay with them  for my LOC although their credit card perks aren't the best.

if you are ok with moving banks i think Scotia has the best current offers with their Healthcare+ professional LOC (350k - all up front) and have the best travel rewards with their credit card as well. 

[Sleepywood]

2 minutes ago, ontariopremed said:

most banks offer the same basic stuff - the main thing is to make sure you are getting prime minus 0.25% for your variable interest rate. I am with TD currently so i decided to stay with them  for my LOC although their credit card perks aren't the best.

if you are ok with moving banks i think Scotia has the best current offers with their Healthcare+ professional LOC (350k - all up front) and have the best travel rewards with their credit card as well. 

Do you have any explicit reasons for why you don't want to switch banks, or is it simply because you are familiar/comfortable with your current arrangement? Not to imply there's anything wrong with that btw, I'm just trying to decide what sort of reasons should deter me from switching banks (currently with RBC but looking at Scotia).

[ontariopremed]

47 minutes ago, Sleepywood said:

Do you have any explicit reasons for why you don't want to switch banks, or is it simply because you are familiar/comfortable with your current arrangement? Not to imply there's anything wrong with that btw, I'm just trying to decide what sort of reasons should deter me from switching banks (currently with RBC but looking at Scotia).

i have a number of different accounts with TD so switching banks kinda complicates my finances and i like the convenience of just sticking to one bank (less of a headache moving forward - better to simplify things imo) 

i was seriously considering scotia and may still switch to them for my LOC down the road. with all things considered - scotia is the best imo 

[Mel96b]

Just wanted to give a small update to you guys.

I talked to my financial advisor at Desjardins and they agreed to give me a credit card equivalent to that offered by scotia (world elite) for free will all the advantages. The interest rate will be the same for the LOC, but the limit is 275k instead of 350k (which doesn't bother me at all since I don't want to use all of it). The only thing I won't have is the 300$ opening bonus + credit card award points, but I could still got them later if I decide to make the switch after all.

The reason why I decided to stay with Desjardins is that they always gave me a great customer service, I got bursaries from them a few times and I will probably get some again in the future... and my very short experience was HORRIBLE (and apparently I'm not the only one). Soooo that will be it for now, and I may change my mind later over the years if another institution become more advantageous for one reason or another.  

[pacerpacer1]

22 hours ago, icymeia said:

Can anyone advise me on how to choose a bank? From what I can tell, the only difference is in credit cards and credit card perks (and possibly perks later on when the packages come out for this year), but being a newbie, I have no clue. Should I just talk to the advisors at each bank to get more information? Or can someone explained why they chose their bank (it seems like Scotiabank, RBC, and CIBC are equivalent)?

As everyone offers the same perks, same products, first off, make sure you’re getting the basics: 350k LOC, Premium credit cards and premium accounts.

 

Once you know you’ll get that, try to find the best fit for the advisor. I went with whom I felt most comfortable with, someone highly recommended and someone who responds fast and efficiently. also try to ask things that are beyond medical lines of credit. We’ll be business owners eventually, so if you feel someone has knowledge regarding the business side, I would say go for that advisor and that bank.
 

One thing that my advisor in RBC mentioned is that they all work as a team. This means if my contact or any other person leaves, doesn't mean I would fall through the cracks and I won’t have a go to person anymore - i have in my disposal a team of healthcare advisors. My sister has mentioned she had to go through so many different advisors and had to repeat her story and agreed upon deals over and over before with Scotia in med school and residency, where RBC says they’ve solved that problem by having several of their team involved with a client, in case your main contact person leaves. 

My suggestion is to perhaps get some good recommendations based on your location. 

[newperson]

3 hours ago, pacerpacer1 said:

My suggestion is to perhaps get some good recommendations based on your location. 

Would you recommend going with some located near your school or in your hometown? I spoke to an advisor from my hometown recently and they didn't seem that familiar with some medicine-specific things (i.e. transferring your student LOC into a professional LOC after graduation).

[pacerpacer1]

My suggestion - make sure when you call for an appointment to specifically ask for a medical specialist. 

 

I used these links: 

 

Scotiabank: https://www.scotiabank.com/healthcare/ca/en/contact-us.html?gclid=EAIaIQobChMInOPP0KT26QIV2h-tBh12_gAMEAAYASABEgL1rfD_BwE

 

RBC: http://www.rbcroyalbank.com/student/specialist-locator/

 

Pretty easy to find from these links alone. I’m from Vancouver and I talked to Angeline and before it was also Byron whom I found through this link from RBC, but I think Byron left. 

[ShadesofCyan]

It seems like RBC and Scotia are now quite equal as far as rates and perks.

From my understanding RBC now will let you to pay back the principle of your LOC at anytime. You don't even have to start paying it off right after residency. You can also keep the LOC and credit cards through residency and after. I think some of this is new this year.

[Anaik]

9 hours ago, ShadesofCyan said:

It seems like RBC and Scotia are now quite equal as far as rates and perks.

From my understanding RBC now will let you to pay back the principle of your LOC at anytime. You don't even have to start paying it off right after residency. You can also keep the LOC and credit cards through residency and after. I think some of this is new this year.

Very similar to Scotia too I think, but what I liked about Scotia is that once you’re done residency you can work with them to get a plan that works best for you as a physician. 

[FrannieLydon]

10 hours ago, ShadesofCyan said:

It seems like RBC and Scotia are now quite equal as far as rates and perks.

From my understanding RBC now will let you to pay back the principle of your LOC at anytime. You don't even have to start paying it off right after residency. You can also keep the LOC and credit cards through residency and after. I think some of this is new this year.

Do you think the credit cards they offer are equivalent? I am thinking that the Amex Gold and Passport infinite are better than the avion infinite offered by RBC. Any other perspectives on this? 

[Onemoreday]

1 hour ago, FrannieLydon said:

Do you think the credit cards they offer are equivalent? I am thinking that the Amex Gold and Passport infinite are better than the avion infinite offered by RBC. Any other perspectives on this? 

mmy 2-cents if it helps : 

So at face value the scotia bank cards give you more points with purchase and travel privileges. When I spoke with an RBC specialist rep she told me the base card with RBC is just the plain platinum and that you'll usually get upgraded to better cards within a year. So if the cards are important for you in the near future, scotia is better.

BUT RBC now has that lifelong LOC and no minimal payements after residency, which makes them more advantageous long-term (at least until scotia catches up or RBC drops it). For someone who doesn't spend a lot to accumulate points and won't be travelling for a year during the COVID fiasco, I personally find RBC a better choice for now. But that's me and the reps I spoke to.

[FrannieLydon]

6 minutes ago, Onemoreday said:

 

So at face value the scotia bank cards give you more points with purchase and travel privileges. When I spoke with an RBC specialist rep she told me the base card with RBC is just the plain platinum and that you'll usually get upgraded to better cards within a year. So if the cards are important for you in the near future, scotia is better.

Any idea what card you get upgraded to? My understanding is that the Avion Infinite is one of the best cards they offer with the Avion infinite privilege being a step up (But requires a min income of $200,000 and has a $399 fee attached to it). Or am I missing other options that could work out nicer?

[Onemoreday]

1 minute ago, FrannieLydon said:

Any idea what card you get upgraded to? My understanding is that the Avion Infinite is one of the best cards they offer and they with the Avion infinite privilege being a step up (But requires a min income of $200,000 and has a $399 fee attached to it). Or am I missing other options that could work out nicer?

I also got that you'll first get upgraded to Avion Infinite regardless of income. I'm fuzzy on if they sometimes upgrade med students to the privilege card or wait till we make more income though (wether thats the usual 200 k or lower).

[FrannieLydon]

1 minute ago, Onemoreday said:

I also got that you'll first get upgraded to Avion Infinite regardless of income. I'm fuzzy on if they sometimes upgrade med students to the privilege card or wait till we make more income though (wether thats the usual 200 k or lower).

I might be misunderstanding you, but I am almost positive that you can start out on the infinite card and they waive the min income of $60,000 and the fee. If your advisor is telling you that you can only get the Avion Platinum, you should ask them again or speak with a different advisor. 

[Onemoreday]

14 minutes ago, FrannieLydon said:

I might be misunderstanding you, but I am almost positive that you can start out on the infinite card and they waive the min income of $60,000 and the fee. If your advisor is telling you that you can only get the Avion Platinum, you should ask them again or speak with a different advisor. 

I was too but I asked twice. Still in the process of confirming with other reps but just wanted to contribute what they told me till now.

[ShadesofCyan]

My general impression is that you can't go wrong with either RBC or Scotiabank. I agree the Scotia credit cards have better options for accruing points. I'm not a fan an AMEX though and I still find there are places that don't take it, especially when you travel. RBC letting you pay off your LOC whenever you want is what sold me, especially if you are considering a lengthy 5 year residency. 

I think it is a personal decision at the end of the day. I get the impression banks used to offer different LOC rates to med students so you had to be very careful. Now much more streamlined and fair. 

[DocBrown9]

All LOCs are the same between banks. At any given point in time, there may be a small difference, I think TD was the first to do prime - 0.5 but the market is so competitive that the banks all switch within a couple of months. Credit cards are the major factor. Personally the Scotia points was really useful for paying off carms expenses (I know amex is accepted everywhere but the visa points pool with amex so you don't really lose out). Also in terms of what happens after the residency, not very useful to base things on that now. LOC terms can pretty much change whenever the bank wants and you can always switch banks as you get closer to finishing. Pick the bank where you will save the most money (ie best credit card for your use) and then switch if needed later. Also don't get sold by some of the insurance products on your LOC (your debts don't transfer after death, it gets collected towards your estate which I assume has minimal assets if you are using your LOC)

[JohnGrisham]

35 minutes ago, DocBrown9 said:

All LOCs are the same between banks. At any given point in time, there may be a small difference, I think TD was the first to do prime - 0.5 but the market is so competitive that the banks all switch within a couple of months. Credit cards are the major factor. Personally the Scotia points was really useful for paying off carms expenses (I know amex is accepted everywhere but the visa points pool with amex so you don't really lose out). Also in terms of what happens after the residency, not very useful to base things on that now. LOC terms can pretty much change whenever the bank wants and you can always switch banks as you get closer to finishing. Pick the bank where you will save the most money (ie best credit card for your use) and then switch if needed later. Also don't get sold by some of the insurance products on your LOC (your debts don't transfer after death, it gets collected towards your estate which I assume has minimal assets if you are using your LOC)

Definitely do not pay insurance on your LOC - i've had a few colleagues who got suckered into that.    

[CaramelMD]

1 hour ago, ShadesofCyan said:

My general impression is that you can't go wrong with either RBC or Scotiabank. I agree the Scotia credit cards have better options for accruing points. I'm not a fan an AMEX though and I still find there are places that don't take it, especially when you travel. RBC letting you pay off your LOC whenever you want is what sold me, especially if you are considering a lengthy 5 year residency. 

I think it is a personal decision at the end of the day. I get the impression banks used to offer different LOC rates to med students so you had to be very careful. Now much more streamlined and fair. 

What do you mean by RBC letting you pay off whenever you want? I thought for all banks, you can pay off the amount you used any time you want? Sorry if I’m misunderstanding!

[ShadesofCyan]

@CaramelMD I'm happy to clarify. From my understanding you can pay off your LOC at any time or put money towards paying it off anytime. Most banks ask you to start paying amounts off the principle during residency or when you finish med school.

Scotia bank says "No payments required until you're finished residency, plus another two years repayment grace period"

RBC told me you can pay whenever you want during your career. They do not require you to start paying it off at a specific time.

Obviously it you want to wait to pay it off quickly as you'll be accumulating interest but it is good to have options. 

[hbmed]

29 minutes ago, JohnGrisham said:

Definitely do not pay insurance on your LOC - i've had a few colleagues who got suckered into that.    

Wait could you elaborate on this? I (and my family) are super unfamiliar with how these work and was originally planning on getting loan insurance

[rmorelan]

28 minutes ago, hbmed said:

Wait could you elaborate on this? I (and my family) are super unfamiliar with how these work and was originally planning on getting loan insurance

it is a trap

The point in insurance is to cover a rare but severe loss to yourself. That is why we have disability, fire, life, property.......insurance. Tragic events regarding all of those are rare but if they occur it would be very expensive. 

The key here is there MUST be a loss though. No loss then no point having insurance. 

In the case of your death as tragic as it might be doesn't have an associated critical loss, or at least doesn't for most people who are med students. Your estate would have to pay the loan - extremely likely it couldn't and then the bank would be forced to take the rest as a loss. Beyond that nothing happens - and as long as your estate doesn't have to pay for anything really that is fine. 

You can argue ok, so wait - I do have financial obligations in my death (say you are married for instance). Ok that is rarely true for med students but if it is true they you may need life insurance - however you would need clearly much more than the value of the LOC and it is usually cheaper to just get a policy directly for that. 

Bank charge interest on loans to cover profit + risk on their investment. All investors are doing that actually with any investment, and the bank has already factored the risk of your death when giving you the LOC. When you pay for insurance on the loan, you are reducing the banks risk - they will now get paid even if you are killed. However they do not offer in return anything to you for reduction - your interest rate stays the same. You are giving them something for nothing - which is in most cases stupid. If the banks cared about your death then they should be the ones getting the insurance (which actually they do indirectly). 

They may argue wait - if you die there are expenses - like your funeral even. Fine that may be true - but you can get a small life insurance policy, make your parents the receivers of it outside of the estate and cover that. All for vastly cheaper than any LOC insurance - and you can provide your parents for instance with whatever amount you want to accomplish other tasks as well. All without dealing with your LOC - again an investment which the bank has already charging interest to cover their risk. 

This overall is another lesson in personal finance - ha so PAY ATTENTION - banks, people that sell insurance or investments and so on often present products that make NO sense and cost you vast sums of money (this is just a small example, but still it reveals the pattern you must be aware of). This is in effect how their business often operates and you must assume that is what is going on so you must always educate yourself. Failure to do that will cost you a horrifying amount of money and the downstream time or freedom that money represents (hundreds upon hundreds of thousands of dollars here).

Edited June 13, 2020 by rmorelan