Personal Finance

Unsecured Personal Line of Credit

  • Last Updated:
  • Jan 11th, 2018 9:24 am
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON

Unsecured Personal Line of Credit

A big-5 bank offered me an unsecured Personal Line of Credit and tells me I'm 'pre-approved'.
$15,000 @ 7.2%

Is this a good rate?
My understanding is that there will be no credit-check involved.

Perhaps good just to have as an emergency source of funds?

Do people normally just accept pre-approved LOC's that are so offered?
7 replies
Deal Guru
User avatar
Aug 24, 2016
11667 posts
14020 upvotes
Win-ter-peg
Doesn't matter what people usually do.
Do what suits you.
If you feel you'll never use it, and it may just hinder your ability to obtain other credit elsewhere, then don't accept it.
If you think it may come in handy at some point, then take it while it's preapproved.
Credit is normally a lot tougher to obtain when you need it, especially ULOC.
If the rate you were quoted is inclusive of the Prime rate, then it's not terrible.
Deal Fanatic
Feb 15, 2006
9183 posts
3861 upvotes
Toronto
905P4N6 wrote: A big-5 bank offered me an unsecured Personal Line of Credit and tells me I'm 'pre-approved'.
$15,000 @ 7.2%

Is this a good rate?
My understanding is that there will be no credit-check involved.

Perhaps good just to have as an emergency source of funds?

Do people normally just accept pre-approved LOC's that are so offered?
If you are new to getting LOC, and trying to establish credit history, then this is good.

The rate is not the best for ULOC, but without collateral, the banks obviously need to charge a higher rate.

An LOC can come in handy when you need the money, as it's a loan you can make use of right there, without having to apply. If you need to establish credit history, you can even take out a small amount, then quickly pay it off -- that's positive for your credit history.
Deal Addict
Oct 16, 2013
2409 posts
765 upvotes
New Brunswick
I would say get it. It is hard to get it when you need it.
Deal Expert
User avatar
May 8, 2009
15560 posts
14184 upvotes
Going to the Moon
Agreed with all of the above. Without a credit check, the pre-approval ULOC (especially if it's conveniently from the bank you already deal with) is worth it. Since it's pre-approved, it shouldn't hinder OP's ability to get approved for credit elsewhere.
Premium Life: CDC [Icey Private Status]/SwissBorg Genesis/InLock/Netflix UHD [100% off]/Amazon [Prime 100% off]/Instacart [Express]
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON
titaniumtux wrote: Agreed with all of the above. Without a credit check, the pre-approval ULOC (especially if it's conveniently from the bank you already deal with) is worth it. Since it's pre-approved, it shouldn't hinder OP's ability to get approved for credit elsewhere.
they certainly are making it easy for me to get it. thanks.
Deal Expert
User avatar
May 8, 2009
15560 posts
14184 upvotes
Going to the Moon
905P4N6 wrote: they certainly are making it easy for me to get it. thanks.
Let us know how it goes. I had asked PCF (Now Simplii) on a few occasions for a ULOC (or even an SLOC), and they kept turning me down. Once they pre-approved me for a ULOC, I jumped on it. Since then, I got the limit increased and the interest rate lowered (which required a "hard credit check", but I was ok with that since I had nothing to lose).

I think virtually anyone who is at least *mostly* responsible with money should have a ULOC. It's an outlet to remedy high interest debt, especially if you use it short term to accomodate looping a balance on an MBNA PP MC :D I wouldn't use it as an outlet to "finance" anything, but if you're stuck and you're a couple days away from pay day, it's certainly better than overdraft.

If you're pre-approved and you use it responsibly, it'll help build your credit score and eventually you'll pass every credit check with flying colours.
Premium Life: CDC [Icey Private Status]/SwissBorg Genesis/InLock/Netflix UHD [100% off]/Amazon [Prime 100% off]/Instacart [Express]
Deal Addict
User avatar
Jun 23, 2017
1510 posts
1076 upvotes
Toronto, ON
titaniumtux wrote: Let us know how it goes. I had asked PCF (Now Simplii) on a few occasions for a ULOC (or even an SLOC), and they kept turning me down. Once they pre-approved me for a ULOC, I jumped on it. Since then, I got the limit increased and the interest rate lowered (which required a "hard credit check", but I was ok with that since I had nothing to lose).

I think virtually anyone who is at least *mostly* responsible with money should have a ULOC. It's an outlet to remedy high interest debt, especially if you use it short term to accomodate looping a balance on an MBNA PP MC :D I wouldn't use it as an outlet to "finance" anything, but if you're stuck and you're a couple days away from pay day, it's certainly better than overdraft.

If you're pre-approved and you use it responsibly, it'll help build your credit score and eventually you'll pass every credit check with flying colours.
I have this uLOC set up now.
Rep confirmed that minimum payment is $50 or 2% of balance whichever is greater.
Had the usual offers for balance protector insurance and opening up a chequing account etc. which I graciously declined as I'm using Tangerine for my daily banking.
He ordered me qty:20 cheques for free to get me started. any additional cheques, I'll need to order and pay for.

Top