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isidhu

Please negotiate your LOC

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I see most people on these forums saying to go to one bank or to another, I decided to shop around (RBC/Scotia/TD/BMO) and this was my experience. These terms and interest rates are not set in stone, and can be negotiated. I hope you can learn something from my experience.

I went to all banks to get their interest rates and maximums. The two best were Scotiabank and TD who both offered a maximum of 100k, no cosigner.

1. Scotiabank because they offered best payment option with no interest payments (they add interest to your principal) (at Prime + 0.5 though unfortunately).

2. TD bank because they offered the best interest rate at Prime + 0%.

I got TD to offer me 100K at prime + 0% and send me an email with that offer (said I wanted to show my parents and get their advice), which I showed to Scotiabank who offered me 100K with no interest payments (added to principal) at Prime + 0%. So I got best of both worlds.

Edited by isidhu
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What is the grace period for your LOC from TD? Is it a year? What happens after a year? 

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TD is willing to do prime -0.25% ($100k / 3 years), RBC has a 2 year grace period at prime flat (amount depends on school), Scotia with no interest payments (added to principal) at Prime.. so TD's best??

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On 2017-06-15 at 1:26 PM, echan59100 said:

TD is willing to do prime -0.25% ($100k / 3 years), RBC has a 2 year grace period at prime flat (amount depends on school), Scotia with no interest payments (added to principal) at Prime.. so TD's best??

Was going to come here to share re: TD. I think the repayment period is 6mo. after grad instead of one year but I would have to doublecheck that. 

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Regarding TD, I'll have to check my docs but I'm 99% sure there is a 13 month (I guess you could call that the grace period) after graduating before your LOC converts to an amortized loan. The repayment period is determined by the balance of your LOC, I believe the full $100K is 240 months. 

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I actually tried this with scotia but instead of getting an offer from TD for myself, I used my friend who's starting at a different law school and she said that because it's a tier 2 program, they can't offer anything less than prime + 0.5 %  -- any advice? 

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1 hour ago, suns said:

I actually tried this with scotia but instead of getting an offer from TD for myself, I used my friend who's starting at a different law school and she said that because it's a tier 2 program, they can't offer anything less than prime + 0.5 %  -- any advice? 

Part of negotiating is being willing to walk away or accept the final offer. 

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23 hours ago, suns said:

I actually tried this with scotia but instead of getting an offer from TD for myself, I used my friend who's starting at a different law school and she said that because it's a tier 2 program, they can't offer anything less than prime + 0.5 %  -- any advice? 

 

What's a tier 2 program?

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Last year Scotia offer me prime + 0.5% but I told them that I heard some other people were getting just prime, and they then offered me just prime, dropping the 0.5%. Definitely negotiate.

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Hi everyone - an update: TD is stupid and thought they could offer me prime -0.25%..... but a month after setting me up with all their chequing/savings/credit card accounts/ paper work, they tell me they can't. It's only for medical and dental students. What a WASTE of my time. But I still want everyone to know so their time isn't wasted too. Now I'm going to Scotia, because. 

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On 6/29/2017 at 2:56 PM, harveyspecter993 said:

 

What's a tier 2 program?

It's like a list of professional programs that they deem as "tier 2" so optometry, law, and MBA - I don't know what qualifies as tier 2 vs. tier 1, but I believe medicine and dentistry are listed as being under tier 1 

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This is potentially a stupid question but can you negotiate your LOC once you have it? My LOC is set up so the interest comes out of my chequing account, but I would prefer if it did the Scotiabank thing and just added the interest to the principal on my LOC. But is it too late to have this conversation? I haven't put any money on my LOC yet but I have had it for a year. 

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1 hour ago, twinsfindme said:

This is potentially a stupid question but can you negotiate your LOC once you have it? My LOC is set up so the interest comes out of my chequing account, but I would prefer if it did the Scotiabank thing and just added the interest to the principal on my LOC. But is it too late to have this conversation? I haven't put any money on my LOC yet but I have had it for a year. 

Scotia seems open to renegotiating. I'm not sure about your bank, but I can't imagine it's impossible or something. 

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Unless you have the best terms available on the market (or the best terms they'll give) then of course they'll be willing. The caveat being that you have to be willing to walk away if they turn you down. 

Go to another bank with the feature you want and ask them if they'd be willing to issue you a line of credit, contingent on transferring the balance (if you have one) and closing the previous LoC. They almost certainly will, since they make zero dollars off you having a line of credit at a different bank. Then either accept their offer, or take their offer to your current bank. Say that you'll be transferring your LoC and cancelling your account with them unless they can match the offer. If they say yes, stay with them. If they say no, leave. 

Note: you can really only do this once before the next bank will be hesitant to lend you funds again.

Second note: you can also do this following graduation, if you want to. 

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Also to note though, if you wait until graduation before, say, reducing your interest rate, you will have accrued interest at the original, higher interest rate for the time you had the previous LOC open (interest accrues regardless, the minute you take money out, even if it's rolled back onto the LOC; it's not like OSAP or government loans)

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I've been getting some messages about how exactly I got Scotia to give me prime + 0% instead of prime + 0.5%. Some people in this chat group just simply asked the Scotia financial advisor and got it, but this was my experience.

1. I went to TD for an appointment with an advisor and he told me they were willing to give me 100K at Prime + 0%.

2. I went to Scotia and told them about TD's prime + 0% offer, which is better than Scotia's Prime + 0.5% offer***. They told me that they would be happy to match TD's offer but they would need proof that I was offered prime + 0% from TD first.

3. I thought that it'd probably be unlikely that the TD advisor would be open to being used as a pawn for me to get a better deal at Scotia bank, so basically I emailed the TD advisor this, "Hi this is "isidhu", we met about the line of credit for law school couple of days ago. I would like to seek the advice of my parents so could you please email the main details of the line of credit that you offered me, such as the amount offered and the interest rate. Thank you."

4. He emailed me the main details such as the fact that he offered me prime + 0%. I forwarded this email to the Scotia advisor and she gave me prime + 0%.

 

***TD's interest rate is better, Scotia's terms are better as I made clear in my opening post.

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Just spoke to advisors from Scotia and RBC today...

I bank with RBC but have read here that Scotia is the preferred choice of many so I wanted to compare. Here's what they told me:

SCOTIA - Called back within 10 minutes of me sending an email, very helpful. Offers 135k for Osgoode students. I asked about the interest rate. They told me that Prime + 0% was possible depending on my credit history (and their risk). They also offer a 24 month grace period (which begins AFTER articling) before repayment. Offered to send an email with all the details.   

RBC - I prefer to stay with them as I have all my accounts there already. They offered Prime + 0% right out of the gate without negotiation. Same repayment structure as Scotia. But only 125k. I was approved over the phone. The advisor is emailing me the offer and all I need to do in-brach is bring my proof of enrolment and sign the documents. 

I plan on doing my due diligence with Scotia to see if they will in fact match (after all the extra 10k could come in handy). Though I was impressed that RBC offers Prime + 0% as a matter of policy without negotiation. People don't seem to mention them often but they are worth a look. Even if only as a tool to leverage another institution.  

**EDIT** - One difference I forgot to mention. Scotia gives you the 135k in three instalments of 45k, whereas RBC gives you the 125k up front. 

Edited by scottbeowulf
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On 6/15/2017 at 4:26 PM, echan59100 said:

TD is willing to do prime -0.25% ($100k / 3 years)

What's your source for this? I have good credit but Scotia won't do Prime minus for me, only prime. I'd like to contact your TD rep.

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18 minutes ago, SneakySuspect said:

What's your source for this? I have good credit but Scotia won't do Prime minus for me, only prime. I'd like to contact your TD rep.

Scotia did it for me this year

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27 minutes ago, SneakySuspect said:

What's your source for this? I have good credit but Scotia won't do Prime minus for me, only prime. I'd like to contact your TD rep.

Scotia isn't giving me prime only Prime +.5. I'm thinking of trying another branch

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