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Student line of credit Options
Lisgar08
Posted: May 20, 2008 12:37:27 AM
Rank: Senior Student
Groups: Member

Joined: 4/15/2008
Posts: 59
Location: Ottawa
Anyone have any input on this?
Student lines of Credit from financial institutions
are they worth checking out?
tmhlee
Posted: May 20, 2008 12:44:26 AM

Rank: Valedictorian
Groups: Member

Joined: 3/4/2008
Posts: 633
Location: Mississauga, ON / Montreal, QC
I've been told this should be the last resort. But I guess I know next to nothing about it. I'd love to read some input on this too =]

bordeaux
Posted: May 20, 2008 9:33:03 AM
Rank: Senior Student
Groups: Member

Joined: 3/24/2008
Posts: 91
Location: ON
I suppose it's considered a last resort if you qualify for OSAP, got huge scholarships or have parents who have all the money saved up but for those of us who don't it may be the difference between going to school and not going.

Here's what we've dug up on this so far. Pretty much all of the major financial institutions offer a student line of credit. Most are at prime or prime + 1. For an undergrad degree they'll usually give you $10000 per year to a maximum of $40000. My cousins went in and applied and got approved the summer before their first year even though they didn't need any funds till second year. That way they had $20000 available by second year (less any advances) whether they needed it or not. You must make interest payments on your balance while you're going to school and you start paying back the principal usually 6-12 months after graduation. Most of them also come with a low limit credit card. If I remember correctly Desjardins is $300, TD is $500.

skittleys
Posted: May 20, 2008 11:44:33 AM
Rank: Frosh
Groups: Member

Joined: 5/15/2008
Posts: 4
Location: Ontario
OSAP really only provides you with enough money for tuition and books. If you're not living at home and/or don't have any scholarships, etc., you'll probably need it.

It's a very good idea to apply for one anyway, just in case. It costs nothing to create the account and be approved; it only costs money when you start using it (you pay interest on whatever you've taken out). With a line of credit pre-established, you'll have access to the money the second you need it--no long process of getting approved by either the bank or your university's emergency funds program--so you can be (relatively) worry-free. Plus--and, in my opinion, most importantly--it helps you establish your credit rating using a more secure and less tempting medium than a credit card; it depends on the institution and your program "type", but you can probably expect to pay "Prime + 1%" interest, MUCH lower than any credit card!

If you are in a professional program, ScotiaBank is by far the best place to go; you don't pay a single cent of interest until 12 months after you finish the last piece of your education--the only other bank that offers this is the National Bank of Canada--but you also get some free perks. If you ever plan on being in a professional program (medicine, dentistry, law, nursing, pharmacy, chiropractic, mba, etc.), you should probably stay away from ScotiaBank because, while I don't see it advertised anywhere, there's always a limit on how much you can receive on a line of credit overall, and this is true even if you get some as an undergrad and some as a pro student. The same is true of grad school, but most banks offer equivalent programs--none appear to stand out. If you're just starting out, it'll be easiest for you to stick with your current institution. Some offer a bit more per year than others (I think they're all within $2,000 of each other) but, unless you've got some extreme circumstances or undue hardships (which OSAP and bursaries usually offer you extra money for anyway), you won't need it--in fact, it might just encourage you to be more frivolous!

So, in my opinion (know that I'm in my 6th year of university education of sorts--undergrad + pro--and I've done a LOT of research on this!), get one for those just-in-case scenarios and to establish credit!

Queen's B.Sc.H., B.Cmp. '07
U of T B.Sc.Phm. '11
McGill Behavioural Neuroscience Summer Internship '07
Visiting scholar at Athabasca (04), Ryerson (06)
bordeaux
Posted: May 20, 2008 1:11:28 PM
Rank: Senior Student
Groups: Member

Joined: 3/24/2008
Posts: 91
Location: ON
TD also offers 12 months of interest only payments following graduation according to the bank officer I spoke to on the phone. Their website confirms this.
SwobyJ
Posted: May 23, 2008 1:33:36 PM

Rank: Senior Student
Groups: Member

Joined: 3/12/2008
Posts: 272
Location: Owen Sound
skittleys wrote:
OSAP really only provides you with enough money for tuition and books. If you're not living at home and/or don't have any scholarships, etc., you'll probably need it.



That's the case for me. Approved (not yet really, but OSAPs estimation online right after filling out the form) for $6200 and they will only cover Tuition and books-or-student fees. That leaves about $8000-9000 for residence and I'll need about $2000-3000 for assorted expenses (cell phone, clothes, nights out, etc). I'm going to the other end of the province to Ottawa -Carleton U- and I'll probably need this.. I'm very scared about taking any sort of loan from a bank though. Any advice?

~~~Ba Honors Political Science @ Carleton University, Ottawa big grin~~~
Kaylya
Posted: May 23, 2008 1:40:10 PM

Rank: Student Body President
Groups: Member

Joined: 3/4/2008
Posts: 2,575
Location: Ottawa
It's a last resort in that you should first seek out money you don't have to pay back (jobs, scholarships, parents, etc), then money that's not accumulating interest until after you finish (provincial student loans), then lines of credit.

But if you need it, you need it, and there are far worse ways to get money (Credit cards and payday loans come to mind). And I don't think the terms are that much worse than provincial loans.

FAQ's:
1. Will I get in? See: electronicinfo.ca for Ontario schools. If you have a couple percent above the marks there and it's not looking at supplementary, the answer is almost certainly yes.
2. Anything else: Google it before asking.
MDoucett
Posted: July 21, 2008 7:08:16 PM

Rank: Student Council
Groups: Member

Joined: 3/4/2008
Posts: 327
Location: Ottawa, ON
I applied for one, the hard part is getting a good co-signer.

desiderantes meliorem patriam
Lisgar08
Posted: July 22, 2008 3:30:41 PM
Rank: Senior Student
Groups: Member

Joined: 4/15/2008
Posts: 59
Location: Ottawa
If I've turned 18, is it still mandatory to have a co-signer?
and what constitutes a co-signer anyway?
Will a parent/guardian suffice, or does it have to be a person with an healthy and established credit rating as well..
and do i have to show evidence that i'l have a source of income for the following year, ie a part time job, so as to pay the interest accrued
Kaylya
Posted: July 22, 2008 3:44:54 PM

Rank: Student Body President
Groups: Member

Joined: 3/4/2008
Posts: 2,575
Location: Ottawa
Lisgar08 wrote:
If I've turned 18, is it still mandatory to have a co-signer?
and what constitutes a co-signer anyway?
Will a parent/guardian suffice, or does it have to be a person with an healthy and established credit rating as well..
and do i have to show evidence that i'l have a source of income for the following year, ie a part time job, so as to pay the interest accrued


The reason you need a co-signer when over the age of majority is because it is too risky to lend much money to an 18 year old with no credit history. I don't think your cosigner has to have an amazing credit history, but it can't be terrible either.

Under the age of majority it has to do with legalities of signing contracts in general as a minor.

FAQ's:
1. Will I get in? See: electronicinfo.ca for Ontario schools. If you have a couple percent above the marks there and it's not looking at supplementary, the answer is almost certainly yes.
2. Anything else: Google it before asking.
Malinka
Posted: July 22, 2008 9:18:00 PM

Rank: Posteur Intermédiaire
Groups: Member

Joined: 4/17/2008
Posts: 514
Location: Ontari-ari-ari-o
Since I (partially) have to rely on banks loans to get me through university, here's the scoop.

First, like has already been mentioned, it is definitely a last resort. Applying for it and then not using it isn't a bad idea, at least you have it if you need it. The biggest difference between OSAP and a bank loan is that YOU have to pay the interest on your loan whereas with OSAP the government pays it for you. So if you just need the bank loan for smaller funds (say a few thousand) then it's manageable, but if you're relying on it to pay for your education, then it just won't work. By the time you owe $20 000 you can expect to be paying at least $100/month in interest alone, and I don't know any student past 1st year that has an extra $100 lying around each month.

Second, your co-signer is usually your parents, but I believe it can technically be anyone with a well established credit history that is willing to co-sign a loan with you. Keep in mind the more money your co-signer has, the bigger your bank loan (until max anyway). After that the bank doesn't really care if you have a source of income or not, they know they can get their money from the co-signer.

Now the good news is, for those of you that need a bank loan because you got screwed over from OSAP, you'll most certainly be approved since I believe the only thing you can't appeal on an OSAP decision is your parents income, which means they make a lot of money, which means you'll get approved.

International Development, 2010
Kaylya
Posted: July 22, 2008 9:55:29 PM

Rank: Student Body President
Groups: Member

Joined: 3/4/2008
Posts: 2,575
Location: Ottawa
Malinka wrote:
Now the good news is, for those of you that need a bank loan because you got screwed over from OSAP, you'll most certainly be approved since I believe the only thing you can't appeal on an OSAP decision is your parents income, which means they make a lot of money, which means you'll get approved.


It is possible to make a lot of money and be drowning in debt with a terrible credit rating. And then the people whose parents refuse to help them may not be willing to co-sign.

FAQ's:
1. Will I get in? See: electronicinfo.ca for Ontario schools. If you have a couple percent above the marks there and it's not looking at supplementary, the answer is almost certainly yes.
2. Anything else: Google it before asking.


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