Personal Finance

Please share your Unsecured Line of Credit interest rates and lenders

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  • Oct 1st, 2019 12:08 pm
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Apr 21, 2004
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snowhite445 wrote:
Jan 1st, 2019 6:52 pm
Thanks for details.
The rates seem pretty high (the 5-8%). What can one use LOC for with these high rates? Would you say people use it to buy real estate or invest otherwise or just to pay down higher interest loans like credit cards?
I think 8% is pretty decent, from the more recent LOC rate posts. Mine is now at 9% lol and I doubt RBC is going to lower it anytime.

Well, people do pay down the highest interest rate LOC or loan when they have the funds or they do invest the amount, hoping to make alpha though it's not a guarantee, just like most things in life.

TFSA contribution room just opened up and so did the 60-day RRSP window for tax deductions for 2018. Refunds will be coming soon too so those LOC's will likely be paid down. Maybe people are taking advantage of the January effect where stocks more likely go up than down, haha.
Last edited by alanbrenton on Jan 3rd, 2019 4:38 pm, edited 1 time in total.
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Jun 13, 2018
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snowhite445 wrote:
Jan 3rd, 2019 4:17 pm

If there was no emergency then technically ULOC was used to risk buying stocks from the market because income was already used to buy stocks (out of RRSP account) and I again salute you for that daring move.
financedude can explain his reasoning, my use of a loc is short term bridge financing. 8% annually is not the same 8% cost of capital put to use for 4 - 6 weeks. Borrowing from a loc to trade equities is leverage most wouldn't do.
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ritzcrv wrote:
Jan 3rd, 2019 4:31 pm
financedude can explain his reasoning, my use of a loc is short term bridge financing. 8% annually is not the same 8% cost of capital put to use for 4 - 6 weeks. Borrowing from a loc to trade equities is leverage most wouldn't do.
Which the banks highly advise against on the T&C of an application.
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Nov 9, 2017
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ritzcrv wrote:
Jan 3rd, 2019 4:31 pm
financedude can explain his reasoning, my use of a loc is short term bridge financing. 8% annually is not the same 8% cost of capital put to use for 4 - 6 weeks.
If bridge loans are prime + 2% or 3% it maybe cheaper to get from bank than using ULOC and also not many people have ULOC of like $80,000-200,000 which might be needed in current Toronto market if date of sell of a home doesn't match date of buy of another home. But maybe you flip a lot of homes and find your comfort in this rather than paperwork and liens and administrative fees build up. Are you using bridge loans strictly in terms of real-estate or other types of activity?
Ref:
https://www.ratehub.ca/bridge-financing

I agree that 8% annually is nothing for a day trader who can make 8% in 4 - 6 weeks - albeit a really good one.
ritzcrv wrote:
Jan 3rd, 2019 4:31 pm
Borrowing from a loc to trade equities is leverage most wouldn't do.
That's why I think his work is admirable if returns are coming year after year.
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@snowwhite445 He is trading cars, not houses or stocks or ???. Have a thorough read of his posts in this thread, you're way off base on his process.
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ritzcrv wrote:
Jan 3rd, 2019 5:05 pm
@snowwhite445 He is trading cars, not houses or stocks or ???. Have a thorough read of his posts in this thread, you're way off base on his process.
He used the following terms which made me believe it's the market trading:
financedude wrote:
Jan 3rd, 2019 6:24 am
I DO NOT use my personal money for vehicle loans, but I work in the automotive finance sector. So the individuals that purchase my cars for me, I help them arrange financing through Scotiabank, TD, RBC, etc etc.

2018 was pretty meh for my portfolio to be honest. 5.2% overall gain. Sure I didn’t get the 6.7% (LOC) that I used, but I do have more $$ saved now and I also got to offset my taxable income. Investment is all a game- I did pretty good with bitcoin at one point, made almost $15k in 6 weeks. Have not monitored bitcoin now so don’t know where it sits.
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snowhite445 wrote:
Jan 3rd, 2019 5:43 pm
He used the following terms which made me believe it's the market trading:
Because of the word, portfolio? All that is is a general collection of things: cars, jets, space rockets, bronze statues, snowboards, lava lamps, & I guess stocks & bonds. :)
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Dec 10, 2018
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snowhite445 wrote:
Jan 3rd, 2019 5:43 pm
He used the following terms which made me believe it's the market trading:
I did infact face and personally experienced the decline in my stock portfolio, the only real stock that saved me was Aurora and that was sometime in June/July if I recall correctly.

RRSP contributions DO NOT have to be maximized. In 2017 I contributed $7,500 and got about $3,300 back in taxable savings.
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Dec 10, 2018
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ritzcrv wrote:
Jan 3rd, 2019 4:31 pm
financedude can explain his reasoning, my use of a loc is short term bridge financing. 8% annually is not the same 8% cost of capital put to use for 4 - 6 weeks. Borrowing from a loc to trade equities is leverage most wouldn't do.
My best return ever on use of ULOC and can 100% be attributed to my ULOC was in August 2018. In June 2018 I borrowed $82,000 to purchase an Audi R8. The interest in total cost me $1,200. I sold the R8 for $96,500 in August. Effectively making $13,300 in 2 months.
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Nov 9, 2017
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financedude wrote:
Jan 3rd, 2019 6:08 pm
My best return ever on use of ULOC and can 100% be attributed to my ULOC was in August 2018. In June 2018 I borrowed $82,000 to purchase an Audi R8. The interest in total cost me $1,200. I sold the R8 for $96,500 in August. Effectively making $13,300 in 2 months.

That must have been quiet a deal you found. Sounds better than BTC. I bet you drove the car for a while as well during summer and enjoyed it too.
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Dec 10, 2018
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snowhite445 wrote:
Jan 3rd, 2019 6:58 pm
That must have been quiet a deal you found. Sounds better than BTC. I bet you drove the car for a while as well during summer and enjoyed it too.

Dealer only auction that I have access too.

Regardless not to get off topic here, but that is what I use my
Over $150,000 in ULOC’s for.

In summary it is always good to have access to as much credit as possible, specifically ULOC’s.
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Nov 9, 2017
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I thought ULOC applications are frowned upon and are not based on credit score (not talking about a score of 300 for example) and that income also doesn't play much of a role because it is an unsecured loan. But I have seen secured loans against assets and properties given out dime a dozen. I have only heard of ULOC with offerings that banks give out proactively. I have heard many times from people that banks won't give you a line of credit when you need it but will offer you one when you don't need it and that is when you should take it.

Do banks ask for a reason when you apply? If yes, would your dealer license (assuming you have one) OR any other business or business related activity played a role or was it solely based on your credit score and CRA annual assessment and whatever reason?

TD has been making unsecured loan offers to businesses recently. Mind you these are loans so interest rate starts right away unlike ULOC where cash is available on demand.
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Dec 10, 2018
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snowhite445 wrote:
Jan 3rd, 2019 7:26 pm
I thought ULOC applications are frowned upon and are not based on credit score (not talking about a score of 300 for example) and that income also doesn't play much of a role because it is an unsecured loan. But I have seen secured loans against assets and properties given out dime a dozen. I have only heard of ULOC with offerings that banks give out proactively. I have heard many times from people that banks won't give you a line of credit when you need it but will offer you one when you don't need it and that is when you should take it.

Do banks ask for a reason when you apply? If yes, would your dealer license (assuming you have one) OR any other business or business related activity played a role or was it solely based on your credit score and CRA annual assessment and whatever reason?

TD has been making unsecured loan offers to businesses recently. Mind you these are loans so interest rate starts right away unlike ULOC where cash is available on demand.
On credit application I do not disclose my dealer license. Nor am I incorporated, sole proprietorship, or business associated.

I am a payroll employee with a T4 of $122,000-$127,000 annually.

Your statements are all accurate. You should apply for ULOC’s when you DON’T need them.

For all of my ULOC applications all that was required was my last 2 paystubs (from the date of application).

-Simplii Financial however required my last 2 years of NOA (application to activation of ULOC was exactly 13 days). Application was through Simplii website.
-Scotiabank required last 2 paystubs from date of application and called my employer for verbal confirmation for ~$125,000 income (application to activation of ULOC was 8 days). Application was over the phone.
-TD is where all my banking is, they saw direct deposit to my chequings account (application to activation of ULOC was 9 days). Application was through TD website.
-CIBC was by far the easiest. Last 2 pay stubs (application to activation of ULOC was only 3 days). I was also later invited to their Imperial Services client status. Application was over the phone.

They all asked for reason for application, I stated “for future use”.
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financedude wrote:
Jan 3rd, 2019 7:49 pm
On credit application I do not disclose my dealer license. Nor am I incorporated, sole proprietorship, or business associated.

I am a payroll employee with a T4 of $122,000-$127,000 annually.

Your statements are all accurate. You should apply for ULOC’s when you DON’T need them.

For all of my ULOC applications all that was required was my last 2 paystubs (from the date of application).

-Simplii Financial however required my last 2 years of NOA (application to activation of ULOC was exactly 13 days). Application was through Simplii website.
-Scotiabank required last 2 paystubs from date of application and called my employer for verbal confirmation for ~$125,000 income (application to activation of ULOC was 8 days). Application was over the phone.
-TD is where all my banking is, they saw direct deposit to my chequings account (application to activation of ULOC was 9 days). Application was through TD website.
-CIBC was by far the easiest. Last 2 pay stubs (application to activation of ULOC was only 3 days). I was also later invited to their Imperial Services client status. Application was over the phone.

They all asked for reason for application, I stated “for future use”.
Thanks for the info.

- Did you ask for a set amount on your applications or allowed them to give whatever? If yes, how much did you ask? (I am assuming they sort of give you little less).

- Never heard of CIBC Imperial Service - but looked it up and it's a thing and sounds / feels like VIP. Did you use it for any reason or just fancy marketing service?

P.S. Make sure you use those ULOC once in a while. I didn't use my CIBC one and one day they closed it after giving a notice but it was only $10k and I hadn't found a way to use it.
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Dec 10, 2018
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snowhite445 wrote:
Jan 3rd, 2019 8:00 pm
Thanks for the info.

- Did you ask for a set amount on your applications or allowed them to give whatever? If yes, how much did you ask? (I am assuming they sort of give you little less).

- Never heard of CIBC Imperial Service - but looked it up and it's a thing and sounds / feels like VIP. Did you use it for any reason or just fancy marketing service?

P.S. Make sure you use those ULOC once in a while. I didn't use my CIBC one and one day they closed it after giving a notice but it was only $10k and I hadn't found a way to use it.
I cycle my $6,000 debt between my ULOC’s each month 2 carry about $3,000 each and the following month the other 2 carry $3,000 each.

I got exactly what I asked for. SCOTIA was weird they initially gave me $34,400 and I requested $35,000. I then used the SCOTIA limit transfer technique I discussed in my previous posts.

CIBC IMPERIAL is somewhat helpful. My initial approval with CIBC ULOC was at 8.95%. My CIBC IMPERIAL dedicated personal banking rep got it reduced 2% to 6.95%. It does NOT cost me anything to have CIBC IMPERIAL. I did get a cool looking Black debit card.

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