Switching LOC

[Talon01]

Salutations,

After reading MD Management offers LOC up to 200,000 I've become interested in switching to them since their terms/rates/etc seem very similar to those that I have with the RBC LOC I have now. Ideally, I wanted the extra 50K to put any outstanding OSAP loans onto the remainder of the LOC.

Is it even possible to switch banks like this? Any info is welcome.

[kosmo14]

Check with the Royal first. They too will extend it up to 200000 if you request it.

[Talon01]

I was only approved for 130K due to the amount of OSAP I have already accumulated throughout my previous 6 years of school. I emailed my bank representative and she said to increase my LOC I'd need my parents to cosign (although I don't know if she was just assuming or if she had pulled my file), so I doubt they'd extend it 70K.

But I do realize that MDM advertises UP TO 200K (but not necessarily the full amount).

[NurseNathalie]

thanks for asking that question... I'm presently with MDM, and seriously thinking of switching to RBC

[satsumargirl]

was only approved for 130K due to the amount of OSAP I have already accumulated throughout my previous 6 years of school

I have not heard of this before...interesting.

I would suspect that banks use similar calculations when evaluating risk etc.. So if RBC isn`t giving you the full 150k I would hazard a guess that MDM may not give you the full 200k they offer.

If your plan is to just put your OSAP on it at the end, then just ask them to raise your limit once you are done. By that time you will be entering residency and so will have an income, so that should take away the need of a cosigner. (unless you have a few blips in your credit history)

I spoke to RBC about raising the limit if I needed to. They said if it was a matter of losing my business that they would do it.

And if at the end of it all RBC doesn`t give it to you, I am sure there will be at least one other bank willing to give what you want and make all that interest off you 6 figure debt!
So transfering may not be necessarily urgent if you are otherwise happy with RBC and they are meeting your needs right now.

Sats

[kosmo14]

Hey there that was the way the old RBC plan worked, but they just changed it in the last 6 mos or so. They do not take away for your prov/nat. student loans. I was approved for up to 200 000 and I still have my student loans. I really hope I don't use that much, but it is a good cushion for residency. Although they would not increase it beyond 150000 until after I matched

[TimmyMax]

Hey,

Yeah, RBC's changed a lot since I was with them. I was with them during 1st year of medicine, but they totally sucked, so I switched to BMO and things have been a zillion times better.
I also heard through a classmate that you can increase your limit to 200K through BMO with minimal hassle. I may end up doing that and then getting myself a helicopter so I can get to and from work in style! :lol

Best of luck!
Timmy

[Talon01]

Hey Timmymax,

Can you provide info about how you did this? Do you just approach the new bank and they work out all the details? Does your old bank charge you admin fees or anything?

[TimmyMax]

Hey,

Yeah, I basically phoned up the medical student LOC rep from BMO, explained to them the situation (that I was unsatisfied with my current LOC provider), and they pretty much did the rest- I'm sure that they really get a kick out of stealing clientele from other banks! The BMO rep was so incredibly helpful and accessible (unlike my RBC rep, who changed constantly and never was around when I needed something), and she really helped point me in the right direction. I went to my old bank, asked for a close-out balance, took that back to BMO and they cut me a cheque for the difference and that was pretty much it- I got my new LOC with my new bank (minus the amount of the LOC I had already used, of course), and I was all set!
As for service fees, the way that RBC was set up (they've since changed their service charge policies, I'm pretty sure, to get more with the times), I got service charged back to the stone age! It cost me money each and every time that I wrote a cheque, made a debit purchase or took out money! Bear in mind that I usually bank with PC, where you don't have to deal with this service fee $hite, so you can understand how irritated I was, because those fees add up big time! Needless to say, now that I'm out from under RBC's thumb and/or they no longer have their hand in my pocket! I'm a lot happier because BMO is infinitely easier to deal with and the medical student rep is always available, ready and willing to help with even the most mundane, silly things I ask her about.
So yeah, that's the deal with switching. My advice is to always deal through the people/reps who deal with the medical students (banks will usually have one or two people who deal pretty much exclusively with professional student LOCs), preferably in the city that your medical school is in so that you can get the best package. And if you find that they are giving you static, or are holding out on you for whatever reason, just casually mention that there are other banks out there that can loan you money...a little healthy competition never hurt anyone!

Best of luck!
Timmy

[satsumargirl]

As for service fees, the way that RBC was set up (they've since changed their service charge policies, I'm pretty sure, to get more with the times), I got service charged back to the stone age! It cost me money each and every time that I wrote a cheque, made a debit purchase or took out money! Bear in mind that I usually bank with PC, where you don't have to deal with this service fee $hite,

There are no service fees for anything with RBC under the plan. At least not from your checking accout. If you want to use your LOC like a checking acount (ie writing cheques etc against your LOC directly instead of transfering the money to your checking account) then you will be charged fees - you are allowed 2 cheques/month for example on your LOC and after that there are fees. But everything is free for your checking account.

My bank rep - who has been very available and helpful - when setting up my LOC she came to me even between classes so I wouldn't have to make it over to the bank - I have heard stories of her meeting people outside the OR in order to get things signed!!. Anyway, she said if I ever got charged for anything to let her know and she would just take it off.

I suspect each person's experience with a bank depends on the rep where they are. For instance before moving to Ottawa, I had stopped an RBC in London and was completely unimpressed - they couldn`t even find the sheet outlining the LOC!! (so they gave me the MBA one :\ ) and my MDM meeting was friendly but not nearly like what I had heard from other people. Then I got to Ottawa and met the RBC rep who deals only with medical professionals and students. She was pretty good (for a bank rep...musn`t forget she is still a bank rep after all!) and even sat down and went over budgetting etc. So I have no complaints about RBC as of yet. (other than my usual complaints about banks in general)

I think you just need to find the bank in your area that has a good rep.

[Talon01]

Hey Sats,

Is your rep in Ottawa? If so, would you mind PMing me their name/branch? I signed up for my LOC in London so it's been a bit of a pain trying to call her whenever I have a question and I wouldn't mind someone more local (and not 650km away!) who is helpful.

Thanks!

[cause2003]

Talon,
I don't know if you've considered this. I vaguely remember at some financial planning seminar that interest payments on student loans are tax deductible. By paying off your student loan with a LOC you will lose this tax benefit, which in turn may end up costing you more. I wish I could give you specific numbers, but I’m not an expert.
-cause

[Steve MD09]

Interest payments on government student loans are tax deductible, but considering the interest rate is a few percent higher than the prime you pay on a bank LOC, consolidating is probably the best option for most people. Also, you're generally in a low tax bracket as a resident (considering the tuition credits you should have), which is another reason the higher interest rates aren't worth the trade-off of tax deductions.