Personal Finance

Line of credit - how to get lower interest rate ?

  • Last Updated:
  • Oct 2nd, 2020 6:54 am
[OP]
Jr. Member
Oct 18, 2012
189 posts
12 upvotes
GTA

Line of credit - how to get lower interest rate ?

Hello,

How can I get a lower interest rate on LOC or any other loan ? Urgently need some cash with really low interest rate . Credit is excellent.

Hope to get a reply soon.

Thanks in advance !
20 replies
Deal Fanatic
Nov 11, 2008
8256 posts
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I dont think you can negotiate much unsecured. I've had my LOC for 10 years and it went from prime - 2.5 to prime - 0.5. Talked to the bank and they won't do crap.
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May 8, 2009
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Going to the Moon
OP you give us waaaaay too little information...
  1. approximately how much would you like to borrow? Can give a range or rounded amount
  2. Who do you have credit products with currently (CC's & uLOC's, but also would help to know if you have car loan) and what kind of credit limits do you have? Can give total sum of CL's and can give rounded amount
  3. How long do you need to borrow money for...or more importantly how long do you think it'll take to pay it off?

I'd recommend getting into the balance transfer game, but I suspect OP is too n00b for that.
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Deal Addict
May 15, 2013
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The best way is asking for it.
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May 15, 2013
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titaniumtux wrote: OP you give us waaaaay too little information...
  1. approximately how much would you like to borrow? Can give a range or rounded amount
  2. Who do you have credit products with currently (CC's & uLOC's, but also would help to know if you have car loan) and what kind of credit limits do you have? Can give total sum of CL's and can give rounded amount
  3. How long do you need to borrow money for...or more importantly how long do you think it'll take to pay it off?

I'd recommend getting into the balance transfer game, but I suspect OP is too n00b for that.
You didn't even ask about income source...
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May 8, 2009
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iamthebest wrote: You didn't even ask about income source...
Does it really matter? Knowing how much time OP needs to pay back the loan is enough info for us to make suggestions. Where they get the money is none of my business :lol:
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Apr 24, 2009
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EPcjay wrote: I dont think you can negotiate much unsecured. I've had my LOC for 10 years and it went from prime - 2.5 to prime - 0.5. Talked to the bank and they won't do crap.
That's pretty good for unsecured. What bank is this?
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Nov 8, 2017
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titaniumtux wrote: OP you give us waaaaay too little information...
  1. approximately how much would you like to borrow? Can give a range or rounded amount
  2. Who do you have credit products with currently (CC's & uLOC's, but also would help to know if you have car loan) and what kind of credit limits do you have? Can give total sum of CL's and can give rounded amount
  3. How long do you need to borrow money for...or more importantly how long do you think it'll take to pay it off?

I'd recommend getting into the balance transfer game, but I suspect OP is too n00b for that.
Because there aren't any
[OP]
Jr. Member
Oct 18, 2012
189 posts
12 upvotes
GTA
1. Around $13k
2. I have an unsecured loc with Td around $15k which I haven’t used it at all.
3. I’m willing to pay off the whole loan in 1-2 years
Hope it clarifies my expectations. Any suggestions please in getting a lower interest rate??

titaniumtux wrote: OP you give us waaaaay too little information...
  1. approximately how much would you like to borrow? Can give a range or rounded amount
  2. Who do you have credit products with currently (CC's & uLOC's, but also would help to know if you have car loan) and what kind of credit limits do you have? Can give total sum of CL's and can give rounded amount
  3. How long do you need to borrow money for...or more importantly how long do you think it'll take to pay it off?

I'd recommend getting into the balance transfer game, but I suspect OP is too n00b for that.
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Oct 24, 2016
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So you are not willing to use your TD loc? What’s the interest rate for this loc?

What is your expectation of “really low interest rate”?
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[OP]
Jr. Member
Oct 18, 2012
189 posts
12 upvotes
GTA
Holystone wrote: So you are not willing to use your TD loc? What’s the interest rate for this loc?

What is your expectation of “really low interest rate”?
Interest rate on Td loc is 8.20%. I’m looking for as low as possible. How do I get that ? How does balance transfer work ?
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windywalks wrote: 1. Around $13k
2. I have an unsecured loc with Td around $15k which I haven’t used it at all.
3. I’m willing to pay off the whole loan in 1-2 years
Hope it clarifies my expectations. Any suggestions please in getting a lower interest rate??
Ok this kind of information is something we can work with!

Sure, borrow from TD CT uLOC whenever you "need" it, as you can re-rate the interest you pay along the way with balance transfers. Keep in mind that there's no cheaper borrowing than BT's (except a lousy BT offer can come close to a low rate on a uLOC).

Preamble:
  1. you probably won't get $13k from a single issuer via BT if it's a new relationship in the short term. You'll have to water your garden to pump up the outlets
  2. Be prepared to pump up CL at MBNA, CIBC, CTFS and maybe a few other places asap. I assume you already have CC's at TD CT

WORKFLOW FOR MAINTAINING MOST OR ALL OF A $13K LOAN AT MINIMAL BORROWING COST - and I mean it
  1. apply for a bunch of cards on the same day (or at least within a short time frame). I recommend checking out the MBNA BT thread and grabbing one of those affinity cards for the 0%/10 months at 1% fee intro offer. They will likely give you $5-15k CL, but odds are it'll be under $13k. The advantage you have is your history with TD CT, but even still...you'll want to apply for MBNA, CIBC and CTFS on the same day, and save PCF for later
  2. Apply for two premium cards at CIBC (can be the same one!!). Also, if you don't have any deposit accounts at CIBC, then open a savings account (that you'll never use) and deposit 5¢ so that they never close the account due to inactivity (even though you'll never use it...the balance will not be zero, so next)...the cheesy savings account unlocks the ability to BT up to full CL at CIBC, whereas otherwise they start you at 50% CL cap on BT's and any cash advances
  3. Grab the signup bonuses on those two premium CIBC CC's. If you got close to the CL you need from MBNA, you can drawer CIBC for now...if not, you'll want to jump on the CIBC BT workflow asap
  4. When you want to BT using CIBC, first merge the credit limits of your CIBC CC's. You'll most likely have more than $13k CL. Product switch or apply for CIBC Select VISA (ya I know a terrible product but with your massive CL, a 0%/10 months with 1% fee is nice). Once you get the Select, make sure all CIBC CL is consolidated into it. Request convenience cheques (yes those still exist). Alternatively open chequing account with Simplii (no fee) and skip the CIBC convenience cheques (unless you're in QC... everyone here should have Simplii...it's hard to beat their no fee banking). Select is currently FYF, but if it isn't, then pay off AF before you BT (should the offer change to another card, then substitute Select with that card). Use the convenience cheque (or direct deposit to Simplii) for the cash advance at promo rate
  5. If you can borrow enough from either MBNA or CIBC, then when the promo ends at one of them, be ready to BT using the other one. You can perpetually bounce the loan back and forth between the two (with enough CL). Once the balance is on a CC (and not in uLOC), you'll also unlock the ability to use a TD CT card BT offer to pay off CIBC CC. With MBNA you can direct deposit the cash advance at promo rate in any Canadian domiciled deposit account (including a uLOC)
  6. CTFS: apply for the Triangle World Elite. Do this asap. Pay your utility bills with this card. Maintain some usage to pump up the credit limit increases. BT offers are generally 0%/3-6 months, 1.5-2% fee. Not the best, but cheaper than uLOC. Can use a TD CT BT offer to pay off CTFS, as well
  7. Keep in mind that issuers won't allow paying off a CC using their BT offer if that CC is with them (TD BT offer cannot be used to pay off an MBNA card, and vice versa).
  8. If you're short on CL to cover the loan by a few grand, then grab PCF. Here's the PCF churning workflow: get the card. Make a purchase at partner grocer or SDM (I buy fizzy water but can be anything). Pay off card. Wait for statement to close. Then trigger the BT online (leave say $100 in unused CL, then BT to a competitor card using the rest of the CL). 0.97%/6 months with $0 flat fee is essentially the best in-market BT offer in Canada. Only catch is they're stingy on CL. They usually give ~$5k CL. The lucky ones get $12k but can be as low as $1k. This (along with CTFS) should help you shuffle balances between or along side your bigger BT's with MBNA and/or CIBC

Doing BT's makes your uLOC interest rate irrelevant since you wouldn't borrow much from it for long anyway.
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Deal Addict
Oct 26, 2003
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Ottawa
Do banks ever increase your limit like credit cards? Had the Tangerine loc for two years and they won’t go past the original limit.

Had a preapproved CIBC offer for prime + 4% 15limit, told them I would sign if the limit was higher and lower %, won’t budge...

750 credit scores with no loans.
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Sep 6, 2018
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oceans_end wrote: Do banks ever increase your limit like credit cards? Had the Tangerine loc for two years and they won’t go past the original limit.

Had a preapproved CIBC offer for prime + 4% 15limit, told them I would sign if the limit was higher and lower %, won’t budge...

750 credit scores with no loans.
My SO received an unsolicited CIBC uPLOC CLI and I received one on my BNS uPLOC, both during Covid. I've seen pre-Covid DPs on RBC and others offering LOC CLIs, and of course most LOCs will allow you to call and manually request a credit review (hard inquiry) and CLI application at just about any time, with a risk of being declined.
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Apr 16, 2007
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windywalks wrote: Hello,

How can I get a lower interest rate on LOC or any other loan ? Urgently need some cash with really low interest rate . Credit is excellent.

Hope to get a reply soon.

Thanks in advance !
Interest rate for a Personal Line of Credit should be viewed as a gauge of lender confidence.
Usual lender securities are all stripped away during qualifying assessments of LOC's.
IF you are quoted a higher rate that usually means a few areas within your credit profile do not meet the FI's qualifying guidelines.
These can be anywhere from credit scoring to tradeline mix to age on file to employment tenure, income, credit history including history of tardiness/defaults, and so on.
So while you may think your credit is excellent the FI may not because there's something missing or lacking within your whole qualifying profile. It may not necessarily be credit related.

One common trend that occurs with most mortgage lenders (bank lenders) is once you qualify for a mortgage they usually extend a LOC automatically.
If you have a mortgage then approach your mortgage bank for a LOC.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Addict
Sep 14, 2012
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windywalks wrote: Hello,

How can I get a lower interest rate on LOC or any other loan ? Urgently need some cash with really low interest rate . Credit is excellent.

Hope to get a reply soon.

Thanks in advance !
I got TD Canada Trust to lower my line of credit interest rate a few years ago by just asking and going through the credit check process (i.e. hard check).

If I remember correctly, I did it by speaking with the branch manager who also happened to be the person assigned to "manage" my accounts (i.e. he called me when my GICs were due, contacted me with any issues with my account, handled my mutual fund purchases, etc.). The end result was an increase in my line of credit limit as well as lowering the interest rate. I also mentioned that I wanted to "secure" it since I had more than 10 times in terms of investments. That's when I was told that it was difficult to "secure" the line of credit with investments since it would take a minimum of at least investments of at double the line of credit limit to "secure" it. Also, I was told that the paperwork involved would be cumbersome. Not sure if any of this was true but after discussing this with him, he submitted the request and I was approved for a higher limit and a lower interest rate.

I was planning on requesting a lower interest rate for my line of credit at TD as well as the financial institutions that I have line of credits with but because of the current COVID-19 environment and how financial institutions are a bit skittish with their credit products now, I haven't done so.

When I do actually request a lower interest rate and higher credit limit for my line of credit (not sure when I will do this), I plan on mentioning my total investment assets at the same institution as well as my overall net worth (and supplying proof), my current debt, and of course mentioning my excellent credit record (no late payments and have always paid my debts).
Deal Addict
Oct 26, 2003
1389 posts
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Ottawa
What’s the point of securing a line of credit?

Wouldn’t it be cheaper to borrow from margin against your investments vs using a Loc? I believe IB margin rates are lower than prime right now.
Member
Dec 26, 2019
432 posts
446 upvotes
oceans_end wrote: What’s the point of securing a line of credit?

Wouldn’t it be cheaper to borrow from margin against your investments vs using a Loc? I believe IB margin rates are lower than prime right now.
Rates aren’t lower at al brokerages (Questrade). And you have to deal with the margin requirements.
Member
Dec 26, 2019
432 posts
446 upvotes
I didn’t want to start a new thread since my question is similar. What’s the best approach for being successful in getting my ULOC interest rate down over time and / or getting my limit increased on occasion?

Would it be better to have it sit idle for a year? Or should I use it periodically (ie pull out 2% and put it back in after the statement comes due)?

My plan is ask for more room every every 1-2 years and I want to increase my chances of succeeding.

Thanks

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