Sponsored Links
Results 1 to 9 of 9
  1. #1
    sky_blue2000 is offline Member 514 points
    Join Date
    Sep 2010
    Posts
    107
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Canadian line of credit....

    Advertisements



    I know this has been discussed...and i've read the posts...but what i'm wondering is specifically about the interest that accrues?!


    Do you start paying interest RIGHT AWAY? I know it's not like OSAP where its interest free...but is it like any of LOC where you start paying from the moment you take it out.

    IF so, then on like 300k wouldn't interest be about $1000 a month? How would be ever be able to pay off the 300k if all you keep paying is the interest every month? I knew it was going to be hard...but this seems near impossible to get out from until like the age of 40!!!!

  2. #2
    Salama's Avatar
    Salama is offline Member Guru 8316 points
    Join Date
    Aug 2009
    Location
    Suppose you call me intern.
    Posts
    10,799
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts
    I am not Canadian, and I don't have to deal with LOC... but from what I've heard, you do start paying interest right away. I don't think you take out the entire thing all at once, but I could be wrong.

    I plan on paying back student loans way past 40. And that's with my subsidized American loans.
    "I am the master of my fate, I am the captain of my soul." ~W.E. Henley

  3. #3
    sky_blue2000 is offline Member 514 points
    Join Date
    Sep 2010
    Posts
    107
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts
    What!! Really? Is that your decision or because you don't think it will be possible to do so earlier?

  4. #4
    swimchick's Avatar
    swimchick is offline Super Moderator 12764 points
    Join Date
    Dec 2007
    Location
    New Orleans
    Posts
    38,287
    Downloads
    0
    Uploads
    0
    Blog Entries
    5
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Quote Originally Posted by sky_blue2000 View Post
    What!! Really? Is that your decision or because you don't think it will be possible to do so earlier?
    For many, it just won't be possible to pay back the debt that soon. I know quite a few docs (most of them primary care) who are in their 40s and still paying back med school loans. Some are able to live frugally and pay the debt sooner. Others may not be able to do this because they have families to care for and often extend their payment plan to lessen monthly payments.

    Just for a quick (and possible scary) example: I have a $20,000 (subsidized and unsubsidized) federal loan from my undergrad days and the payment is $230/month. I am so not looking forward to the day when I pay back med school debt
    ValueMD Moderator

    ​D.O. Class of 2015



  5. #5
    sky_blue2000 is offline Member 514 points
    Join Date
    Sep 2010
    Posts
    107
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts
    sighh....


    Thatis not going to make my family happy I think i'll keep this little tidbit of info to myself for now.

  6. #6
    canadianchic is offline Junior Member 511 points
    Join Date
    Mar 2010
    Location
    Van City
    Posts
    79
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Quote Originally Posted by sky_blue2000 View Post
    I know this has been discussed...and i've read the posts...but what i'm wondering is specifically about the interest that accrues?!


    Do you start paying interest RIGHT AWAY? I know it's not like OSAP where its interest free...but is it like any of LOC where you start paying from the moment you take it out.

    IF so, then on like 300k wouldn't interest be about $1000 a month? How would be ever be able to pay off the 300k if all you keep paying is the interest every month? I knew it was going to be hard...but this seems near impossible to get out from until like the age of 40!!!!
    You pay the interest on the amount you take out from the LOC. For example, say you take out $50,000 from a $300,000 LOC for your 1st year, you only pay interest on the $50,000.

    As the amount you're taking out increases, you interest payments will increase too.

  7. #7
    DWB
    DWB is offline Member 523 points
    Join Date
    Feb 2008
    Posts
    275
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Okay most canadian LOCs from when i looked into it 2 years ago only give you 200k. The second you take out 1 dollar you start paying interest (usually prime which is like 5-6%/year). Remember the interest rate is per year not per month, so if at the end of 3 years your line of credit is maxed out.... you would be accruing 200 000 * .05/12 per month. From what my old math 2 years ago showed, you can only end up using 150 000 because the other 50 000 goes into servicing your interest... so essentially as you accrue interest, you have to start making minimum payments and those payments come out of the same line of credit... this service to your debt will carry you over till you get a residency... so your 4th year you have to find another way of funding your education.... family loans or whatever... also although osap is small... over 4 years you do end up getting like 37 thousand which can help...

    hope this helps...

  8. #8
    DWB
    DWB is offline Member 523 points
    Join Date
    Feb 2008
    Posts
    275
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts
    Sorry the math on the LOC interest accruement is using standard interest.. but in reality your interest will grow much faster because the real calculation is based on compound interest... just like a mortgage...

  9. #9
    RedBird is offline Member 514 points
    Join Date
    Sep 2007
    Location
    you get 3 guesses, and the first 2 don't count.
    Posts
    357
    Downloads
    0
    Uploads
    0
    Thanks
    0
    Thanked 0 Times in 0 Posts
    I've got two LOCs, one from National bank and the other from RBC, both at prime, and both work the same way. Each year, the LOC gets renewed for $50k and the interest is owed starting the first month, BUT the interest is only based on what I use of the LOC. Essentially, I get a bank account with $50000 in it at the beginning of the year but if I only use $30k of it, that's all that collects interest and the other $20k carries over to the next year (not that it ever does - at most I've had maybe 4 or 5k left at the end of the year). Each month the interest is slightly higher, because I've spent a little bit more of the loan. You can either pay off the interest as you go (or have some generous family member do it for you), or add it to the total you owe as you go along.

    Fair warning - NBC counts the amount borrowed between both loans when they calculate how much you have remaining in my LOC from them, so that even though the max they'll lend is $150k (they say it's $200k but they lie), if you borrow $100k from them and $50k from RBC, they won't give you any more (I learned this the hard way).

    As for interest, at whatever prime is right now my interest payments are about $400/month on around $175k total (I'm in third year).
    Last edited by RedBird; 10-16-2010 at 10:28 AM.

Similar Threads

  1. Canadian Line of Credit
    By canadianchic in forum St. James Medical School
    Replies: 2
    Last Post: 03-29-2011, 04:19 PM
  2. Canadian student line of credit
    By Pany in forum St. Georges University School of Medicine
    Replies: 23
    Last Post: 08-07-2010, 08:49 AM
  3. Line of Credit for Canadian Students
    By brahim in forum American University of Antigua (AUA)
    Replies: 2
    Last Post: 02-14-2010, 11:54 PM
  4. Canadian student line of credit
    By Pany in forum Main Foreign Medical Schools Forum
    Replies: 2
    Last Post: 06-23-2009, 12:47 PM
  5. CIBC line of credit for Canadian students.
    By batsheep in forum American University of Integrative Sciences (AUIS)
    Replies: 6
    Last Post: 09-03-2008, 08:07 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •