shm Posted September 14, 2016 Report Share Posted September 14, 2016 I wanted to hear what your thoughts about this offer. A bank representative came to my school and offered my class a student LOC with an interest rate at prime minus 0.25%. We can apply for $275 000 which I think would be given over four years. In terms of other perks I'm not quite sure, but I don't really care. The thing that stood out to me most was the -0.25%. All other banks that I had researched over the summer and the one I currently signed with never had an interest rate below prime. I'm thinking of switching over, but is this deal too good to be true? What do you guys think? Link to comment Share on other sites More sharing options...
Arztin Posted September 14, 2016 Report Share Posted September 14, 2016 It was discussed in other threads as well. From what I understand, they do this while reserving themselves the right to change your rate at any time. Unless if you explicitely have them write down in your contract that you are guaranteed to have prime - 0.25% for an X amount of time, X being ideally over 4-5 years, it doesn't really promise you much. Tell your classmates that the agent should put it on paper. If they can't guarantee it, whelp, it's not worth much IMO. Link to comment Share on other sites More sharing options...
Bambi Posted September 14, 2016 Report Share Posted September 14, 2016 Take the deal. Link to comment Share on other sites More sharing options...
rmorelan Posted September 14, 2016 Report Share Posted September 14, 2016 the key with these - and most long term things I think at least - is to remain flexible. If the deal changes to be less advantageous than somewhere else move. Don't put off moving either. The trap is to be stuck in something out of basically laziness because you cannot be bothered to switch. In the beginning when the LOC is barely used typically the rate doesn't matter much - in the end it is really the main thing that matters in terms of the fundamentals (service still counts as something useful of course). Perks with cards are meaningless - you can pay for whatever card they are giving you for free 5 times over with the roughly average interest savings on the LOC with prime -0.25% and still therefore get the benefits. Link to comment Share on other sites More sharing options...
shm Posted September 15, 2016 Author Report Share Posted September 15, 2016 It was discussed in other threads as well. From what I understand, they do this while reserving themselves the right to change your rate at any time. Unless if you explicitely have them write down in your contract that you are guaranteed to have prime - 0.25% for an X amount of time, X being ideally over 4-5 years, it doesn't really promise you much. Tell your classmates that the agent should put it on paper. If they can't guarantee it, whelp, it's not worth much IMO. My apologies I didn't mean to start another similar thread. Which thread are you referring to? I think the representative said they would not change the rate, but a big thanks for letting me know of this! I never even consider this factor when I signed my current one.... I would be shocked if any bank would guarantee their LOC rate in writing for any length of time. I'm also pretty sure that both my RBC and Scotiabank LOC terms included clauses that they could demand the entire balance of the LOC at any time. It's not in their interest to screw students over, they care about your *future* business more than anything else. If it's a major bank, I would go for it. Worst case scenario, it's very easy to switch LOCs to other banks if the rate changes. There are clauses like that in a LOC?! Thanks for sharing! I really need to read my LOC agreement again... I'm very financially illiterate. This offer is from a major bank. It's one of the "Big Five", according to Wiki. I guess I should quickly set up a meeting with the representative. Apparently they are only offering this deal until October. This seems like a sales/pressure tactic, which make me feel uneasy. Is there anything else I should look out for? the key with these - and most long term things I think at least - is to remain flexible. If the deal changes to be less advantageous than somewhere else move. Don't put off moving either. The trap is to be stuck in something out of basically laziness because you cannot be bothered to switch. In the beginning when the LOC is barely used typically the rate doesn't matter much - in the end it is really the main thing that matters in terms of the fundamentals (service still counts as something useful of course). Perks with cards are meaningless - you can pay for whatever card they are giving you for free 5 times over with the roughly average interest savings on the LOC with prime -0.25% and still therefore get the benefits. Thank you for the tip! Will I get charged for leaving one bank for another? I agree with you on the perks. I mainly chose my current bank because UofT endorsed them. Every bank (at least during the summer) gave the same limit and interest rate, so then I started factoring in the perks and quality of service. Thanks again everyone for your insight/help/suggestions! Dealing with all this financial stuff is definitely very terrifying. Link to comment Share on other sites More sharing options...
rmorelan Posted September 15, 2016 Report Share Posted September 15, 2016 You won't get charged for moving - don't worry about that. Also you will learn this stuff with time if you actually do make the effort to do so (and you really, really should take that time ha). If all things are equal consider the perks. If someone is offering you prime -0.25 pretty quickly it will very likely exceed any perk. Thank you for the tip! Will I get charged for leaving one bank for another? I agree with you on the perks. I mainly chose my current bank because UofT endorsed them. Every bank (at least during the summer) gave the same limit and interest rate, so then I started factoring in the perks and quality of service.Thanks again everyone for your insight/help/suggestions! Dealing with all this financial stuff is definitely very terrifying. Link to comment Share on other sites More sharing options...
loodogg Posted September 15, 2016 Report Share Posted September 15, 2016 what bank is this? Link to comment Share on other sites More sharing options...
shm Posted September 16, 2016 Author Report Share Posted September 16, 2016 You won't get charged for moving - don't worry about that. Also you will learn this stuff with time if you actually do make the effort to do so (and you really, really should take that time ha). If all things are equal consider the perks. If someone is offering you prime -0.25 pretty quickly it will very likely exceed any perk. Alright, good to know! Yeah I tried to learn over the summer but clearly I didn't learn much haha. I'll try again next summer. Don't worry, it's all pretty standard, and we've all gone through it so feel free to ask questions because you are dealing with an enormous amount of debt and should try and be informed about your decisions. There are all sorts of clauses protecting the bank in your contract, and it's not a bad idea to read them, they're pretty straight forward. However, as I said above, the bank has no interest in ruining it's reputation with doctors and dentists, so if you keep up your end of the bargain and make your payments, they'll keep up their end. At the end of the day, the interest rate will matter most. Go with the best rate. Switch if you find a better one. It's very easy. Okay thank you! Really appreciate your understanding! On a side note, I just want to say thanks for all your contributions! I've been a secret, huge fan of yours! xD what bank is this? I'm not sure if I'm allowed to mention the name as I don't want to be accused of advertising. If a moderator allows me to name the bank, I'll post it here! Link to comment Share on other sites More sharing options...
rmorelan Posted September 16, 2016 Report Share Posted September 16, 2016 Alright, good to know! Yeah I tried to learn over the summer but clearly I didn't learn much haha. I'll try again next summer. Okay thank you! Really appreciate your understanding! On a side note, I just want to say thanks for all your contributions! I've been a secret, huge fan of yours! xD I'm not sure if I'm allowed to mention the name as I don't want to be accused of advertising. If a moderator allows me to name the bank, I'll post it here! stating the bank name is not advertising Link to comment Share on other sites More sharing options...
shm Posted September 17, 2016 Author Report Share Posted September 17, 2016 CIBC is offering this promotion! I should also mention, you might not be able to find this deal at your local branch, I think you have to talk to someone who specializes in dealing with these kind of LOCs Link to comment Share on other sites More sharing options...
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