Question:
Has anyone looked into getting a line of credit from a bank? what are your experiences with it... good? bad? are the payments manageable on top of all the other costs?
Response:
Hi! I currently have a line of credit from Scotiabank and it is very useful when it comes to paying tuition as it is very expensive. However, I don’t really know much about payments as you only need to start making payments 6 months after you graduate. From the little that I know, once you borrow the money, the interest starts accumulating on the borrowed amount but you don’t have to start paying the money back until after 6 months upon graduation.
Once the time comes to pay the money back, they convert your line of credit into a 15 year loan (its either 10 or 15, your choice) and your payments are based off of that. So depending on how much you borrow, your payments can actually be quite small. In terms of the interest rate, most LoCs atm usually give you prime plus 0.75 or 1% interest and it comes to around 3.75-4% interest in total. Compared to OSAP this interest rate is quite a bit smaller (7 or 8% for OSAP) but there are other benefits to OSAP such as bursaries. A good strategy to have is to get both OSAP and LoC and then use the LoC to pay off the OSAP as it has a lower interest rate.
I don’t really know much, but Scotiabank is a good place to get your LoC and you should give them a call to inquire more. They can provide you with a lot more information than what I provided here.