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Hey all, 

For people that have gone through law school already, how do you minimize the interest you're paying on debt? I'll be drawing from a LOC, student loans, bursaries, and savings. Basically this is my plan 

1) Pay for tuition with student loans + savings + LOC 

2) Use bursaries (which I believe come in later?) to pay off LOC 

3) Use LOC to pay for living expenses 

4) Use an incoming money going forward (summer job, bursaries, etc) to reduce LOC as much as possible 

 

Is that the way to play it? Once I have a balance on my LOC should I just use any incoming money to reduce it so I reduce my interest payments? Liquidity problems shouldn't be an issue if I can always draw from the LOC, right? 

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Treat the LOC as a last resort since the interest accrues daily.  If you are going to UBC, student loans are likely to cover most if not all of your tuition.  So far I've only had to dip slightly into my government loans after using my savings, and my LOC has been untouched.  Scotia does give a nice Amex along with their LOC, but you would want to transfer your own savings there to pay it off rather than use the LOC to pay for it.

If you live away from home and rent a place somewhere, bursaries can likely cover a substantial part of that.  Keep in mind that they are only disbursed late in term 1 so you'll want to rely either on savings or loans first to cover for that period.

Use your student loans/savings for living expenses.  Don't touch the LOC until absolutely necessary as the interest adds up rather quickly.

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4 minutes ago, meandtheboys said:

Treat the LOC as a last resort since the interest accrues daily.  If you are going to UBC, student loans are likely to cover most if not all of your tuition.  So far I've only had to dip slightly into my government loans after using my savings, and my LOC has been untouched.  Scotia does give a nice Amex along with their LOC, but you would want to transfer your own savings there to pay it off rather than use the LOC to pay for it.

If you live away from home and rent a place somewhere, bursaries can likely cover a substantial part of that.  Keep in mind that they are only disbursed late in term 1 so you'll want to rely either on savings or loans first to cover for that period.

Use your student loans/savings for living expenses.  Don't touch the LOC until absolutely necessary as the interest adds up rather quickly.

Okay thank you, this helps. That is what I'm thinking, use LOC as a last resort and then once I eventually have a balance on there to dump any incoming money onto it to reduce the balance. 

I am renting a place and don't have substantial savings so am hoping that bursaries help! 

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If you have sufficient room on your line of credit once you complete school you can also use it to pay off your government loans once they go into repayment, assuming the interest rate on your LOC is lower than the interest on the government loans. Before then, to the extent your paying any back (during articling) you should put it on your LOC as it accrues interest immediately.

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Sorry as an aside I was wondering how much time negotiating between banks will take (let's say to get the 125K at prime assuming I have a good credit score)? Should I be inquiring as soon as I get an acceptance letter (I've heard that's all you need) or is this something that can wait until the end of the summer?

Also have you guys been calling, emailing or seeing them in person (I imagine this is trickier to do now) to negotiate? 

 

Thanks

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You want to use your savings + bursaries + government student loans to pay expenses first. Once you exhaust your financial resources that don't charge interest, you can save a bit of interest by paying for things on a credit card and then using your LOC to pay off your credit card. There is an interest free grace period for credit cards (usually about 21 days) but not one for LOCs. Make sure you pay off your credit card in full before the statement due date because the interest rate on credit cards is much higher than your LOC. 

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9 hours ago, Policywonk said:

You want to use your savings + bursaries + government student loans to pay expenses first. Once you exhaust your financial resources that don't charge interest, you can save a bit of interest by paying for things on a credit card and then using your LOC to pay off your credit card. There is an interest free grace period for credit cards (usually about 21 days) but not one for LOCs. Make sure you pay off your credit card in full before the statement due date because the interest rate on credit cards is much higher than your LOC. 

That's a great idea, thank you! 

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