Education is costly
Education is costly. Depending on your program of study, your loans and grants, your part-time income, or your RESP may not always suffice to cover all your fees and expenses. As a future doctor, many financial institutions will offer you a student line of credit or a credit card.
Line of credit or credit card?
Both of these financial products give you access to a certain amount of money. When you use them, you are spending money which does not belong to you and which you will have to pay back. A closer look at these two products shows that a credit line is more beneficial.
|Average interest rate||3.45% – 4.95% (*)||19.90% – 22.22%|
|Interest calculation||Calculated daily, from the first day of the loan. / Billed monthly on the amount used.||Period of 21 days before the calculation.|
|Repayment||Minimum monthly payment: interest amount payable.||Full payment or minimum payment, with interest charged on the unpaid amount.|
|Fees for fund advance||NO||YES|
|Rewards and cash backs||NO||YES according to the type of card|
|(*) Variable, adjusted according to the central bank benchmark rate and according to the institution and the product.|
Using a credit card is thus really more costly.
Questions of interest
Why use a credit line? Because it provides you with working capital that can help you cover the cost of your tuition fees, books, living expenses and various other costs related to your medical studies. Its purpose is to enable you to focus on your studies and to have the necessary cash for contingencies: purchase of a new computer, essential consumer goods, etc.
Living within your limit
The repayment period will vary according to the outstanding credit balance. The monthly payments will depend on the prevailing interest rate, which will apply only to the funds used.
Make your payments to the letter, otherwise unpaid interest will accumulate and increase the size of the loan.
Keep an eye on your finances!
Credit has its limits and sometimes it’s hard to resist temptation. The Financial knows your reality and offers a unique service to BRIO credit line holders.
The personalized counselling offered by our advisors helps you to prioritize your expenditures and manage your debt responsibly.