Scotia vs. RBC LOC

[leviathan]

I don't know if RBC has it but Scotia is supposed to give me another limit increase to 275k now that I'm in residency. This will allow me to drop all my student loans onto the LOC so I'm not paying so much interest. I can update if/when this happens.

[schmitty]

I don't know if RBC has it but Scotia is supposed to give me another limit increase to 275k now that I'm in residency. This will allow me to drop all my student loans onto the LOC so I'm not paying so much interest. I can update if/when this happens.

 

That is correct and is something they now advertise. Though I doubt the difference between $250 and $275K will be a dealbreaker for most people since most don't rack up that much.

[shady]

Is it possible to switch banks down the line? I like RBC's lack of annual limits especially for a student in a 3 year program, but $275k > $250k. Can I use RBC then switch to Scotia closer to residency?

[schmitty]

Is it possible to switch banks down the line? I like RBC's lack of annual limits especially for a student in a 3 year program, but $275k > $250k. Can I use RBC then switch to Scotia closer to residency?

 

Yes...most banks would love to take your business so long as your credit is decent.

[Leon]

RBC gives you 250k total, Scotia gives you 200k +15/yr residency up to 5 years for 275k.

 

Just a minor note:

 

It's changed very recently (ie. this week). During residency you get 20K extra per year upto an absolute maximum of 275K

[shady]

Yes...most banks would love to take your business so long as your credit is decent.

 

I guess the best plan is to start with RBC then switch to Scotia

[fugacity]

There were a lot of good points regarding reasons why you shouldn't use LOC to invest.

 

But what is stopping someone from transferring this money to say his or her parent's account to invest and still retain the ability to ask for bursaries?

 

I am not going to do that with LOC's since my family and I are quite quite financially conservative (aka no to blue chip stocks, 1% savings account ftw), but I don't see how this could stop others that have this mentality to make the most out of everything.

[schmitty]

There were a lot of good points regarding reasons why you shouldn't use LOC to invest.

 

But what is stopping someone from transferring this money to say his or her parent's account to invest and still retain the ability to ask for bursaries?

 

I am not going to do that with LOC's since my family and I are quite quite financially conservative (aka no to blue chip stocks, 1% savings account ftw), but I don't see how this could stop others that have this mentality to make the most out of everything.

 

THere is nothing stopping them and some students do this. It's not illegal or anything, just risky. And don't forget, you have to pay taxes on anything you make in dividends/interest/value gains (unless it's all in your TFSA, which is won't be)

[future_doc]

I am aware of conservative and relatively safe investments that will give me a return of say 9%. With the cost of monery at 3%, if I were to invest 200k, I would receive a net return of 12k on a tax efficient basis.

 

However, I would no longer receive bursaries, my provinical loans would be reduced, and investment no matter how safe carries some risk.

 

Whycomplicate my life? My goal is to be a physician, not to try to maximize my income. The purpose of the LOC is to provide needed funding, not to invest. Transferring money to a third party carries its own risk such as death, sudden financial losses by this person, etc.

 

I believe in the K.I.S.S. philosophy, Keep It Simple Stupid. I will have the rest of my life to save and invest, I am in no rush. Step at a time.

[rmorelan]

THere is nothing stopping them and some students do this. It's not illegal or anything, just risky. And don't forget, you have to pay taxes on anything you make in dividends/interest/value gains (unless it's all in your TFSA, which is won't be)

 

well technically it is illegal - you have an asset - the loan to your parents or whatever you want to call it - that you failed to report when you claimed all assets (anything you expect to get back is an asset). You did this in order to achieve a financial advantage you shouldn't be entitled to. I suspect that technically is a form of fraud and at the very least you still shouldn't qualify for the bursary etc.

 

Of course getting caught is another matter.

 

By the way weird things can happen if you do that. What if your parents get a divorce, hopefully not but actually get killed suddenly, or just don't like you anymore? Have you covered that situation, i.e. where is the money now? Any income they earn on this morning would be taxed - in their name - what tax bracket are they in? How would that work with their capital gains limits?

[schmitty]

well technically it is illegal - you have an asset - the loan to your parents or whatever you want to call it - that you failed to report when you claimed all assets (anything you expect to get back is an asset). You did this in order to achieve a financial advantage you shouldn't be entitled to. I suspect that technically is a form of fraud and at the very least you still should qualify for the bursary etc.

 

Of course getting caught is another matter.

 

By the way weird things can happen if you do that. What if your parents get a divorce, hopefully not but actually get killed suddenly, or just don't like you anymore? Have you covered that situation, i.e. where is the money now? Any income they earn on this morning would be taxed - in their name - what tax bracket are they in? How would that work with their capital gains limits?

 

Yup...lots of unknowns. Hence why I plan on doing none of that, haha.

[tberry3]

If you go to Mac, do you still get the same limits on your LOC? How does it work with the shorter program?

[lovestruck]

I absolutely hate my RBC representative (poor customer service, didn't seem all that informed) and love my Scotiabank rep (very informed and just great) so given the minor differences between the two, would it be reasonable to go with Scotiabank?

 

I'll be using OSAP so I won't come close to the $50000 a year. The only thing that freaks me out is if in the case of an emergency I need extra money (house burns down and I'm homeless or something crazy!) I would have more of it with RBC.

[future_doc]

Go with Scotia. You can always change down the road in a nanosecond.

[rmorelan]

I absolutely hate my RBC representative (poor customer service, didn't seem all that informed) and love my Scotiabank rep (very informed and just great) so given the minor differences between the two, would it be reasonable to go with Scotiabank?

 

I'll be using OSAP so I won't come close to the $50000 a year. The only thing that freaks me out is if in the case of an emergency I need extra money (house burns down and I'm homeless or something crazy!) I would have more of it with RBC.

 

actually if something weird like that happens you can go talk to your Scotia rep and basically work something out - that happened once in our year. They set those limits as safeguards etc but there is a bit of flexibility.

 

Plus it is only the first year away where there is even a slight limitation - I mean by year two I had 80K to play with, and by year 3 over a 100K by the start and so on.

 

ha - even if your house burned down (renters insurance by the way is about 20 dollars a money to cover up to 25K of stuff approx) you won't really need that much to set up again if you are a typical student

[osteogeek]

If you go to Mac, do you still get the same limits on your LOC? How does it work with the shorter program?

 

I haven't set mine up yet, but I read in last year's thread that someone went with Scotia and got $66k/year for 3 years instead of $50k/year for 4 years, so basically the same overall limit with higher yearly limits. If they do that for me, I'll sign with Scotia as well. Hope that helps!

[tooty]

It is true that the plans do have a lot of similarities. Some of the smaller details of the products are what set them apart. Our product comes with the Scotia Gold Passport visa with the annual fee waived throughout school and residency. You will earn travel points on this card and can then redeem them for flights when you do your interview tour. Also a small detail with our loc is you don't need to make payments to the line as the interest accrues onto your balance. This is nice as you can focus on your studies and not worry about transfering money around each month to make a payment.

 

How does the scotia Gold Visa card compare with the RBC Avion in terms of dollar value per point? I'm paying the $125 annual fee for the Avion right now.

[rmorelan]

How does the scotia Gold Visa card compare with the RBC Avion in terms of dollar value per point? I'm paying the $125 annual fee for the Avion right now.

 

You don't pay anything for the scotia gold visa at western (heard not all branches originally did that but they are coming around it seems)

 

This is the link to the card - http://www.scotiabank.com/ca/en/0,,89,00.html

 

I was just looking at it actually as I convert over to that card in a few months.

[Leon]

My Scotia rep said for first year you can extend it to 70K if necessary, though I think very few people would need to do that.

[rmorelan]

My Scotia rep said for first year you can extend it to 70K if necessary, though I think very few people would need to do that.

 

Seen that - you just have to have a good reason. Same logic any other year for that matter.

 

Kind of the point of all this, I mean it is a bit hard to explain - you are a professional at this point with the LOC etc, and the good banks you can go to treat you like a professional. They actually work to help you - it is their job, and a part of the type of service a professional would expect to receive. You become a different type of customer in effect. If it sounds a bit elitist it is because really it kind of is. It still seems weird to me even after 4 years.

[schmitty]

actually if something weird like that happens you can go talk to your Scotia rep and basically work something out - that happened once in our year. They set those limits as safeguards etc but there is a bit of flexibility.

 

Plus it is only the first year away where there is even a slight limitation - I mean by year two I had 80K to play with, and by year 3 over a 100K by the start and so on.

 

ha - even if your house burned down (renters insurance by the way is about 20 dollars a money to cover up to 25K of stuff approx) you won't really need that much to set up again if you are a typical student

 

I second the renters/owner's insurance. It's super cheap and gives piece of mind ..

[BoyInTheBubble]

My Scotia rep said for first year you can extend it to 70K if necessary, though I think very few people would need to do that.

 

You can get 250k from RBC and pay a substantial downpayment on a house/condo. 3% interest is WAY less than rent or a mortgage. Plus you have the ability to pay it down as fast as you want. Meaning in the long run compared to a mortgage it would be substantially less.... Obviously, depends on your market and what you're looking for. But something to consider.

[rmorelan]

You can get 250k from RBC and pay a substantial downpayment on a house/condo. 3% interest is WAY less than rent or a mortgage. Plus you have the ability to pay it down as fast as you want. Meaning in the long run compared to a mortgage it would be substantially less.... Obviously, depends on your market and what you're looking for. But something to consider.

 

You can get a mortgage for less than 3%. I just got offered one for instance at 2.79%. The LOC prime rate is NOT the lowest mortgage a med student or resident can get. Once again we have a insanely good advantage there.

 

Side note - that was on top of my LOC - so I have both the option of a full LOC of 275K now and a full mortgage up to a rather high amount as well.

[WtsupDoc?]

You can get a mortgage for less than 3%. I just got offered one for instance at 2.79%. The LOC prime rate is NOT the lowest mortgage a med student or resident can get. Once again we have a insanely good advantage there.

 

Side note - that was on top of my LOC - so I have both the option of a full LOC of 275K now and a full mortgage up to a rather high amount as well.

 

I also wanted to add you can get sub prime mortgages which are fixed (your LOC rate changes with the market and that can be dangerous).

[schmitty]

I also wanted to add you can get sub prime mortgages which are fixed (your LOC rate changes with the market and that can be dangerous).

 

Yup, the rates are crazy low right now.