Personal Finance

Lowest Possible Interest Rate for Line of Credit (Scotia or PC Financial)

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  • Nov 8th, 2013 3:26 pm
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[OP]
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Aug 16, 2009
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Lowest Possible Interest Rate for Line of Credit (Scotia or PC Financial)

I will incur some large expenses in the next 90 days and I'm looking for a low interest rate unsecured Line of Credit to alleviate some of the burden. I currently have 8.75% 20k unsecured LOC @ TD. Last April I was unsuccessful in getting them to drop the rate, my balance at the time was 3k.

My next course of action will be to get another LOC. Will likely apply for 20-30k
I've narrowed my search down to Scotia & PC Financial.

Pulled my equifax and I'm at 770 with 12% credit utilization

Thoughts and tips on what I get do to get the best interest rate?
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Feb 15, 2008
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Do you have any collateral you could pledge? Stocks, bonds, GICs, real estate?
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
[OP]
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Mark77 wrote:
Nov 7th, 2013 1:02 pm
Do you have any collateral you could pledge? Stocks, bonds, GICs, real estate?
Could you expand on this? Are you talking about trying to obtain a secured-LOC?

I understand using real estate, was not aware that one could use their investments as collateral.
gogoblender wrote:
Nov 7th, 2013 1:02 pm
Would a 0 % CC from MBNA 12 months help, even for a part of it?
I think they're offering 60.00 sign up bonus at sites

http://www.redflagdeals.com/deal/cre...special-offer/
I prefer the revolving LOC option, and I believe I may have that card already, thanks though.
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smokescreen15 wrote:
Nov 7th, 2013 1:40 pm
I understand using real estate, was not aware that one could use their investments as collateral.
Of course. The main caveat is that the investments can't be inside a tax deferral or tax-free vehicle such as a TFSA or RRSP. They must be taxable, and theoretically, available for seizure by creditors if they are pledged to secure a low cost loan.

Do you think you have something that fits that criteria? If its stocks, there are lenders that lend even below "prime", no questions asked.

Err, sorry, I didn't see you were looking specifically for unsecured, but I wouldn't discount using a secured option, especially since it will lower your interest expenses considerably.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Oct 7, 2012
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banks will also consider offering "professional" level interests ... prime plus tween 1, 2, 3, if you're a professional
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Apr 4, 2012
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STRASBOURG
What would the 'ratios' be for using stocks in a non-registered account be for this purpose (as collateral)? For example, if you have $1000 in a non-registered account, how much could you borrow theoretically at a secured rate?
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Aug 23, 2008
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Richmond Hill
A TFSA can be used as collateral. An RRSP cannot.*
Mark77 wrote:
Nov 7th, 2013 1:51 pm
Of course. The main caveat is that the investments can't be inside a tax deferral or tax-free vehicle such as a TFSA or RRSP. They must be taxable, and theoretically, available for seizure by creditors if they are pledged to secure a low cost loan.

Do you think you have something that fits that criteria? If its stocks, there are lenders that lend even below "prime", no questions asked.

Err, sorry, I didn't see you were looking specifically for unsecured, but I wouldn't discount using a secured option, especially since it will lower your interest expenses considerably.
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swoopds wrote:
Nov 7th, 2013 2:51 pm
What would the 'ratios' be for using stocks in a non-registered account be for this purpose (as collateral)? For example, if you have $1000 in a non-registered account, how much could you borrow theoretically at a secured rate?
Depends on what stocks they are. Bonds can also be used for such as well. For stocks, generally the maximum possible is 70% (ie: $1000 of stock into the account, $700 out), but you'd want to run nowhere near that because of the potential of a margin call.

But for someone who has $100k in some stocks or ETFs, and, for instance, needs a quick $20k to buy a car or take a vacation, secured margin lending can be an extremely viable option for short-term credit needs.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
[OP]
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Mark77 wrote:
Nov 7th, 2013 10:07 pm
Depends on what stocks they are. Bonds can also be used for such as well. For stocks, generally the maximum possible is 70% (ie: $1000 of stock into the account, $700 out), but you'd want to run nowhere near that because of the potential of a margin call.

But for someone who has $100k in some stocks or ETFs, and, for instance, needs a quick $20k to buy a car or take a vacation, secured margin lending can be an extremely viable option for short-term credit needs.
Thanks for the heads up, I will most likely take the route of unsecured.

Is it possible to leverage one LOC offer with another bank in order to get a lower rate?
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Nov 7, 2011
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smokescreen15 wrote:
Nov 8th, 2013 9:19 am
Thanks for the heads up, I will most likely take the route of unsecured.

Is it possible to leverage one LOC offer with another bank in order to get a lower rate?
Mortgage yes, LOC or Loan, No.

I don't think it matters too much where you go, your interest rate will be based off your bureau score + TDSR and GDSR ratios. It always helps applying for a LOC with your primary bank because loyalty can play a part in qualifying + interest rate. Bank employees have direct contact with underwriters via loan notes so they can always make a case for you.

Hope that helped.
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I pay prime, unsecured up to 20Kish. It was obtained through a small Credit Union.

Banks do this to you, when you don't need money the relationship with them is about you borrowing more.

But when you really need money, the relationship is about not giving any, or at high cost.
[OP]
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LongLiveRFD wrote:
Nov 8th, 2013 10:02 am
I pay prime, unsecured up to 20Kish. It was obtained through a small Credit Union.

Banks do this to you, when you don't need money the relationship with them is about you borrowing more.

But when you really need money, the relationship is about not giving any, or at high cost.
Do you mind sharing with us how you obtained that rate on an unsecured LOC?

Were you an existing client/new business, did you bring assets to the table, and what is the name of this CU? :-)

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