Personal Finance

Pre-approved for 5% loan; consolidating debts

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  • Jun 4th, 2016 1:41 am
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[OP]
Member
Oct 17, 2009
273 posts
2 upvotes

Pre-approved for 5% loan; consolidating debts

Hello everyone

I was pre-approved for 5% on a 5 year fixed rate loan at RBC. It says i can add any exsiting non-RBC debt into a loan. I would like to put my 2 credit cards (canadian tire and Capital one) and my auto loan into 1 loan. I also have an RBC credit card which i would like to add as well BUT it says for NON-RBC debt. I was thinking of transfering my RBC credit card to my capital one card so i can add them to 1 loan.

Do you think it's a good idea?
16 replies
Deal Guru
May 29, 2006
10274 posts
2871 upvotes
is this a secured loan, thats a really low rate for a loan. i have a loan and the rate is 9.9%, its not secured.
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
This is a known, targeted pre-approval offer from RBC. Definitely take it if your car loan is >5% interest. Otherwise, just pay out the credit cards. This is the best offer on the market right now for debt consol loans.
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
rocking23nf wrote: is this a secured loan, thats a really low rate for a loan. i have a loan and the rate is 9.9%, its not secured.
No, this is a targeted pre-approval for an unsecured debt consol.
[OP]
Member
Oct 17, 2009
273 posts
2 upvotes
superfresh89 wrote: No, this is a targeted pre-approval for an unsecured debt consol.
What you're saying is the 5% is targeted depending on my credit?
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
No, 'targeted' just means its a special promotion only for people who got the email. They won't do this offer if you go to a branch and you didn't get the email.

Your credit is fine. You wouldn't have been pre-approved otherwise.
[OP]
Member
Oct 17, 2009
273 posts
2 upvotes
superfresh89 wrote: No, 'targeted' just means its a special promotion only for people who got the email. They won't do this offer if you go to a branch and you didn't get the email.

Your credit is fine. You wouldn't have been pre-approved otherwise.
oh great!!

now to my original question. Should I transfer my rbc credit card balance over to my capital one cc so I can include that debt to a loan?
Deal Addict
Jan 2, 2015
1602 posts
603 upvotes
Toronto, ON
Since it's 5%, I'm not sure why you wouldn't transfer any unsecured debt with an interest rate of over 5% to this loan.
Sr. Member
Nov 29, 2006
996 posts
82 upvotes
That's a pretty good rate .. I just got approved for 6.7% variable for 5 years at TD
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
asianstutter wrote: oh great!!

now to my original question. Should I transfer my rbc credit card balance over to my capital one cc so I can include that debt to a loan?
I believe RBC may be willing to include the RBC card in the loan as long as you have the outside debt as well. Ask them first!
Deal Addict
Sep 7, 2004
1595 posts
593 upvotes
Toronto
Out of curiosity is this consolidation loan rate any better than a LOC with a fixed rate option? I often get offers from TD to use a portion of my LOC as a fixed rate loan at 2.25% and keep the revolving portion at TD Prime + 2%.

I'm not familiar with the terms of a consolidation loan but it seems the interest rates on an LOC with a fixed rate option are better than 5%.
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
gqbluez wrote: Out of curiosity is this consolidation loan rate any better than a LOC with a fixed rate option? I often get offers from TD to use a portion of my LOC as a fixed rate loan at 2.25% and keep the revolving portion at TD Prime + 2%.

I'm not familiar with the terms of a consolidation loan but it seems the interest rates on an LOC with a fixed rate option are better than 5%.
I'm pretty sure your figures are incorrect. You can't get a fixed rate loan at 2.25%. Do you mean a variable rate loan at Prime + 2.25%? This would be 4.95%, and very similar to the RBC offer.

Even the interest on your PLC at P+2% seems too low. If that's the rate, it must be a former Education Line of Credit, or, it's a 50K+ unsecured PLC that you negotiated the rate for.

Loans and PLCs from the Big 5 typically range from P+3% to P+12%.
Deal Addict
Sep 7, 2004
1595 posts
593 upvotes
Toronto
superfresh89 wrote: I'm pretty sure your figures are incorrect. You can't get a fixed rate loan at 2.25%. Do you mean a variable rate loan at Prime + 2.25%? This would be 4.95%, and very similar to the RBC offer.

Even the interest on your PLC at P+2% seems too low. If that's the rate, it must be a former Education Line of Credit, or, it's a 50K+ unsecured PLC that you negotiated the rate for.

Loans and PLCs from the Big 5 typically range from P+3% to P+12%.
When I log into TD and check my PLC rate it says "TD Prime + 2%" for a rate of 4.7% in big grey font. My LoC is unsecured,far below $50k, and I negotiated nothing. The utilization has been at $0 for over a year and I've never had an education LoC from any bank.

And the offer I received from TD was to fix a portion of my variable LoC at a fixed rate. The offer explained that if I had a $25k LoC I could fix $10k to a low rate of 2.25% leaving me with a $15k variable rate LoC at 4.70% and a $10k fixed rate closed loan.

Admittedly I didn't pay much attention to the offer (they sent it multiple times) as I don't use my LoC for anything but the rate did catch my eye which is why I noted it here.
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
gqbluez wrote: When I log into TD and check my PLC rate it says "TD Prime + 2%" for a rate of 4.7% in big grey font. My LoC is unsecured,far below $50k, and I negotiated nothing. The utilization has been at $0 for over a year and I've never had an education LoC from any bank.

And the offer I received from TD was to fix a portion of my variable LoC at a fixed rate. The offer explained that if I had a $25k LoC I could fix $10k to a low rate of 2.25% leaving me with a $15k variable rate LoC at 4.70% and a $10k fixed rate closed loan.

Admittedly I didn't pay much attention to the offer (they sent it multiple times) as I don't use my LoC for anything but the rate did catch my eye which is why I noted it here.
It's definitely Prime+2.25%. They probably meant that you can lock it into a fixed payment loan. 2.25% is lower than rates for most terms on mortgages - and that's with a house as security.

Lucky you. You have one of the lowest rates on the market. I'd hang on to that PLC. The going rate is P+3.5 or higher nowadays, even with exemplary credit.
Deal Addict
Sep 7, 2004
1595 posts
593 upvotes
Toronto
superfresh89 wrote: It's definitely Prime+2.25%. They probably meant that you can lock it into a fixed payment loan. 2.25% is lower than rates for most terms on mortgages - and that's with a house as security.

Lucky you. You have one of the lowest rates on the market. I'd hang on to that PLC. The going rate is P+3.5 or higher nowadays, even with exemplary credit.
It's entirely possible that I misread the offer. As I stated I really didn't pay that much attention to it. But offering me something at prime + 2.25% is higher than my actual LOC rate which I know is variable and could change, just seems a bit odd.

In any case, I definitely have no intention of closing off my PLC. I like knowing it's there if I need it. :)
Deal Addict
User avatar
Jun 22, 2007
1194 posts
483 upvotes
London, ON
gqbluez wrote: It's entirely possible that I misread the offer. As I stated I really didn't pay that much attention to it. But offering me something at prime + 2.25% is higher than my actual LOC rate which I know is variable and could change, just seems a bit odd.

In any case, I definitely have no intention of closing off my PLC. I like knowing it's there if I need it. :)
You didn't misread. I just had the same option to lock in on a fixed rate of 2.99% for a year for any amount up to my credit limit. After the year is up it gets rolled over into your current revolving line rate. No different than a promotional rate on a balance transfer credit card. Rates vary.

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