Student Line of Credit of Canadian Banks

WOWA Simply Know Your Options

Student Line of Credit Interest Rates as of November 2024

Undergraduate Students

Lender	Rates Starting From
TDUndergraduate	6.95%Prime + 1%
TDHonors Business Administration (University of Western Ontario)	5.95%Prime
TDPost-Secondary Certificate Program	7.45%Prime + 1.5%
RBCUndergraduate and Graduate Students	6.95%Prime + 1%
CIBCUndergraduate and Graduate Students	6.95%Prime + 1%
National BankUndergraduate	6.95%Prime + 1%
DesjardinsUndergraduate	6.95%Prime + 1%
ATBUndergraduate	6.95%Prime + 1%
Coast CapitalUndergraduate	7.95%Prime + 2%
Affinity Credit UnionUndergraduate	6.95%Prime + 1%

Student Line of Credit Interest Rates as of November 2024

Professional/Graduate Students

Lender	Rates Starting From
TDGraduate (Masters, PhD)	6.45%Prime + 0.5%
TDMedical/Dental/Veterinary	5.7%Prime - 0.25%
TDMBA/MFin/Optometry/ Pharmacy/Law	5.95%Prime
TDChiropractic/Naturopathy	6.95%Prime + 1%
RBCHealth Sciences Programs	5.95%Prime
RBCProfessional Graduate Programs	5.95%Prime
RBCMedical/Dental	5.7%Prime - 0.25%
BMOProfessional Programs	6.95%Prime + 1%
BMOMedical/Dental	5.7%Prime - 0.25%
CIBCChiropractic/Veterinary Medicine	5.95%Prime
CIBCBusiness	5.95%Prime
CIBCProfessional Programs	6.95%Prime + 1%
CIBCPharmacy/Law	6.2%Prime + 0.25%
CIBCMedical, Dental and Optometry	5.7%Prime - 0.25%
National BankHealthcare Programs	5.7%Prime - 0.25%
Affinity Credit UnionGraduate Programs	6.95%Prime + 1%
Affinity Credit UnionDoctor/Dentistry	5.7%Prime - 0.25%

The TD Student Line of Credit is a flexible financing option designed to assist students in covering their educational expenses with competitive interest rates and a generous credit limit. Just like other banks, the TD Student Line of Credit does not require any principal payments until after graduation, providing students with the financial flexibility they need during their studies.

TD Student Line of Credit Interest Rates

Note: Current TD student line of credit rates are based on the lowest rate offered as of Nov 16, 2024. Your rate may vary based on your program of study, credit score, and other factors.

The TD Student Line of Credit's interest rates vary depending on the level of study and the specific program.

For undergraduate students pursuing an Honors Business Administration degree at the University of Western Ontario, interest rates start from TD’s prime rate. Undergraduate students have a line of credit rate starting from Prime + 1%, while students in a post-secondary certificate program have rates starting from Prime Rate + 1.50%.

For those in Chiropractic or Naturopathy, Graduate (Masters, PhD) and MBA/MFin/Optometry/Pharmacy/Law programs, the interest rates sit between Prime and Prime + 1%. Medical, Dental, and Veterinary students benefit from the most competitive rates, with interest starting as low as Prime - 0.25%.

Credit Limits for the TD Student Line of Credit

The TD Student Line of Credit offers different credit limits based on the level and nature of studies.

For both full-time and part-time undergraduate students, the annual limit is $20,000, with a total limit of up to $80,000.

For Masters or Ph.D. students, and Naturopathy students, the limit is set at $80,000. Chiropractic students have a credit limit of up to $100,000. Optometry/Pharmacy students can borrow up to $175,000, while Law and MBA students can borrow up to $150,000 and $125,000, respectively.

Dental and Medical students have a first-year limit of $100,000, with total limits of up to $350,000. For Veterinary students, the limit is $50,000 in the first year and up to $200,000 over the course of your studies.

Things to Know About a Student Line of Credit with TD

• Interest-only payments until 24 months after you leave school
• Annual proof of enrolment required
• Access funds with your TD Access Card, online or mobile banking, ATMs, and cheques

RBC’s student line of credit, called the Royal Credit Line for Students, comes in three options: For students (undergraduate and graduate programs, college or trade school), Professional Studies (professional graduate or specialized health sciences programs), and Medical and Dental students.

RBC Student Line of Credit Interest Rates

Note: Current RBC student line of credit rates are based on the lowest rate offered as of Nov 16, 2024. Your rate may vary based on your program of study, credit score, and other factors.

RBC offers a student line of credit with varying interest rates depending on the program of study. For both undergraduate and graduate students, the interest rate starts from prime plus 1%, which is currently 6.95%.

Those enrolled in health science programs also see a similar interest rate - prime plus 1%. Professional graduate programs, on the other hand, enjoy an interest rate set at the prime rate. Currently, that’s 5.95%.

Medical and dental students receive the most favorable rates at RBC, with their line of credit interest set at prime minus 0.25%, currently at 5.7%.

Credit Limits for the RBC Student Line of Credit

For undergraduate and graduate students, the line of credit has a credit limit of at least $5,000. Professional or Health Sciences students can have a credit limit starting from $5,000 and extending up to $200,000. For those pursuing a degree in medicine or dentistry, RBC provides even larger credit, with credit limits reaching up to $350,000.

Things to Know About a Student Line of Credit with RBC

• Interest-only payments until 24 months after you leave school
• Co-signor is required for undergraduate and graduate students
• Medical and Dental Students continue to have access to their line of credit even after graduation

The Bank of Montreal (BMO) is one of the leading financial institutions in North America, offering a comprehensive range of banking services. That includes a Student Line of Credit, Professional Student Line of Credit, and Medical or Dental Student Line of Credit with BMO.

BMO Student Line of Credit Interest Rates

Note: Current BMO student line of credit rates are based on the lowest rate offered as of Nov 16, 2024. Your rate may vary based on your program of study, credit score, and other factors.

BMO's student line of credit interest rates vary based on the prime rate, a benchmark that banks use to set variable rate loans. For professional programs, the interest rate is set at prime plus 1%. Medical and dental students have a rate starting from prime minus 0.25%.

Programs included in BMO’s Professional Student Line of Credit are:

• Accounting
• Chiropractic
• Clinical Psychology
• Computer Science
• Engineering
• Law
• MBA
• Occupational Therapy
• Optometry
• Pharmacy
• Veterinary Medicine

Credit Limits for the BMO Student Line of Credit

BMO Student Line of Credit Repayment

You can make interest-only payments while you're in school and for up to two years after graduation. Your line of credit's minimum monthly payment will start including principal payments after this period.

From the third year onwards, your monthly minimum payment gradually increases, starting at 1% of the outstanding balance (including interest) and reaching a maximum of 7% or a $100 minimum, whichever is greater, by the eighth year onwards. The goal is to help you manage your payments effectively until the loan is paid in full.

BMO Student Line of Credit Repayment Schedule

Things to Know About a Student Line of Credit with BMO

• Interest-only payments until 24 months after you leave school
• Access your funds through online/mobile banking, with line of credit cheques, or at a branch
• Medical and Dental Students continue to have access to their line of credit during residency/specialty studies

The Canadian Imperial Bank of Commerce, commonly known as CIBC, is one of the "Big Six" banks in Canada. CIBC provides a range of products, from mortgages and loans to investment and retirement planning. One such offering, the CIBC Student Line of Credit, is designed to support students in financing their education.

CIBC Student Line of Credit Interest Rates

Note: Current CIBC student line of credit rates are based on the lowest rate offered as of Nov 16, 2024. Your rate may vary based on your program of study, credit score, and other factors.

For undergraduate and graduate students, as well as students in professional programs, the interest rate at CIBC starts from Prime + 1%. However, for those pursuing medical, dental, and optometry professional programs, a more favourable rate of Prime - 0.25% is offered.

Credit Limits for the CIBC Student Line of Credit

The CIBC Student Line of Credit offers different credit limits based on the program of study. For undergraduate programs, full-time students can borrow up to $20,000 per year with a maximum limit of $80,000. The same maximum limit is applicable for part-time students, but their yearly limit is capped at $10,000, for up to ten years.

Distinct limits are set for specific fields. For instance, students in Nursing or Engineering can access up to $60,000, while those in Occupational Therapy, Physiotherapy or Accounting have a limit of $80,000. Law and Optometry students can access up to $100,000 and $125,000 respectively.

Business students, like those pursuing an MBA or EMBA, have a limit of $125,000. The limit extends to $140,000 for Veterinary Medicine or Chiropractic Medicine students. The highest limit, up to $350,000, is reserved for students in Medicine or Dentistry.

Repayment Options

Take up to 20 years to pay off your CIBC student line of credit, or pay it off at any time without penalties.

Upon graduation, you can convert your CIBC student line of credit into a personal loan, or keep it as a line of credit.

Things to Know About a Student Line of Credit with CIBC

• Interest-only payments until 24 months after graduation or 6 months if you leave school
• You’ll get free SPC membership, which offers discounts at hundreds of stores
• Medical, Dental and Optometry Students can get the monthly fee rebated on a CIBC Smart Plus Account for up to four years, a $1,400 value

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A student line of credit (LOC) is a type of loan that provides financial assistance to students for their post-secondary education. Unlike traditional loans, you can borrow, re-pay, and borrow as many times as you’d like up to your credit limit. This allows you to only borrow what you need at the time.

Interest on student lines of credit only accrues when the funds are withdrawn, and principal payments can be deferred until after graduation. This makes it an attractive option for students who may not have a steady income or substantial savings to cover their education costs. Student lines of credit are an alternative to government student loans, such as OSAP in Ontario.

One of the benefits of a student line of credit is that you have the option to make interest-only payments while you are still in school. This means that instead of paying back the full amount borrowed, you only have to pay the accumulated interest until you graduate. However, the amount that you owe will not go down if you don’t make more than the minimum monthly interest payment.

Most banks also extend this interest-only payment period for a set period after graduation or after you leave school. At TD, RBC, BMO, and CIBC, you can continue to make interest-only payments up to 2 years after graduation. At Scotiabank, you only get 1 year after graduation for interest-only payments.

After this period, you’ll have to make principal payments to pay down the amount that you owe.

Comparing Student Line of Credit Interest-Only Periods

Student line of credit interest rates are based on prime, which is the interest rate that banks charge their most credit-worthy customers. For undergraduate students, the rate is usually prime + 1% or more. For graduate and professional students, it may be at prime. Medical and dental students typically get a discount to prime, such as prime - 0.25%.

Interest is only charged on the amount that you actually borrow. Just because you have a certain credit limit doesn’t mean that you have to borrow and use it all if you don’t need to.

For example, let’s say that you have a $20,000 credit limit with an interest rate of 8.20%. Your tuition and fees are $10,000, and your other expenses for the year are $5,000. You’ll only need to borrow $15,000 over the course of the year, but you still have an additional $5,000 available for unexpected costs.

If you were to borrow $15,000 all at once, your minimum monthly payment would be the interest on this amount. That turns out to be $102.50 per month.

Minimum Payment = (Annual Interest/12) x Borrowed Amount

Minimum Payment = (8.2%/12) x $15,000

Minimum Payment = $102.50

After borrowing $15,000, you’ll need to pay at least $102.50 to cover the interest. You can always pay more or make extra payments if you’d like to pay down your principal.

With most banks, after you graduate, your student line of credit will be converted into a personal loan. Your interest rate may change. The student line of credit will also enter into a repayment period. This means that you will be required to make regular payments towards the borrowed amount and accumulated interest, and that you can no longer access it to borrow more money.

With some banks for certain programs, such as medical or dental student lines of credit, you may continue to have access to your student line of credit even after graduation. Other banks, such as CIBC, may allow you to convert your student line of credit into a personal line of credit.

To be eligible for a student line of credit, you must meet certain criteria set by the lender. With most Canadian banks, this usually includes:

• Canadian citizen or permanent resident/landed immigrant
• Proof that you are attending an accredited Canadian university, college or trade school
• Co-signer or guarantor, depending on your program of study

Proof of enrollment can be provided with your course schedule, tuition invoice/receipt, proof of enrollment letter, or an RESP Verification of Enrolment Form.

You’ll also need to provide a list of your financial resources as well as estimated expenses.

A student line of credit can be used for various education-related expenses such as tuition fees, textbooks, supplies, and living expenses. For example, living expenses include rent, food, transportation, and other necessary costs. However, it's important to borrow responsibly and only use the funds for essential expenses to avoid accumulating large amounts of debt.

Some lenders may also allow the funds to be used for internships, study abroad programs, and other educational opportunities, such as RBC’s Royal Credit Line for Students Studying Abroad.

No, you cannot claim student line of credit interest on your taxes as it is not tax deductible. In Canada, the Student Loan Interest Tax Credit is only for interest paid on government student loans, such as OSAP. The Student Loan Interest Tax Credit provides a tax credit of 15% on interest paid on student loans, not private student lines of credit.

The main alternative to student lines of credit is a government student loan. These loans are provided by the government and usually have lower interest rates than private loans, with interest on government student loans being tax deductible. They also offer flexible repayment options and may come with additional benefits, such as student loan forgiveness, financial assistance programs, or income-based repayment plans. However, they may not cover all educational or living expenses.

Another alternative to a student line of credit is a personal loan. Personal loans can be used for any purpose, including educational expenses. They typically have fixed interest rates and repayment terms, making it easier for students to budget and plan their loan payments. However, they may also come with higher interest rates and stricter eligibility requirements compared to student lines of credit.