20000 Line of Credit at 7.70%

[christian_follower]

Long time member if this subreddit. Need some help.

Got a notification in Scotia app and I'm getting 20000 Line of Credit at 7.70%. Is there more to this? Any insight will be appreciated. I'm very disciplined with money and don't have any debt other than the mortgage. Should I accept it? TIA

 

[lynturc]

@christian_follower Thats a very good rate tbh

 

[chadnyc]

@lynturc years ago, mine was $50,000 at 4%, but I used it to invest in the Nasdaq and not buy stuff. The returns were very nice. Now it's like 8%.

 

[faithwithobedience]

@lynturc prime + 0.5

 

[proverbs31an]

@lynturc Yes, I've been gettign 8-10% offers for a year now, Might need to do some shopping around and see if I can get it sub 7... that wouldn't be too bad.

 

[servantleader]

@proverbs31an No. Blah blah blah blah blah

 

[christian45]

@lynturc Not really

 

[esdras]

@christian45 It's a great rate for unsecured line of credit. Prime +0.5% for an unsecured LOC when HELOC rates are that

 

[edgeofglory]

@christian45 Wrong.

 

[resjudicata]

@christian_follower If you are disciplined, I would take it. I have a 40k Scotiabank line (9.7%) and a 25k Tangerine line (8.2%). They are both are unused but let me keep less cash instantly available for an emergency or logistical reason. There’s no cost to having the line hang out unused.

 

[monsoon]

@resjudicata I know some people disagree with depending on a LOC as a source of emergency funds, but I tend to do this.

I have an uber-stable job, and rather than keep 2 or 3 months in expenses in a savings account I rather have it invested.

 

[debrakayh]

@monsoon The main problem with this is that the banks can call your LOC with very short notice. If you're in financial trouble when you need it, and the bank decides to ruin your day, suddenly you have nothing.

 

[kevin76]

@debrakayh True. But you can get investment in a few days. How much you'll get is the real wild card.

 

[debrakayh]

@kevin76 It has to do with your personal risk honestly. When it was just me living alone, I didn't have any cash on hand ever, because I know that I'm capable of living on stale bread and beans for quite a while. As I got a wife and kids my risk profile changed quite a bit.

 

[monsoon]

@debrakayh Fair enough, and that makes sense.

 

[hishandsandfeet]

@debrakayh This. Tbh the only reason to use a LOC is to make a large payment and pay it back with 2-3 weeks. Less if possible. Its only good for quick access to fast cash. If done right you can use that cash without any interest. Far, far, far, too many people are too comfortable sitting in debt. You hardly ever win as the debtor.

 

[redhossman]

@hishandsandfeet Do LOC not calculate interest daily? I don't think you could get away without "any" interest, but it could be very, very little.

 

[resjudicata]

@redhossman Yes, interest definitely accrues daily. So, about $20 for $10k at 10% for a week, I think.

 

[mofnah]

@hishandsandfeet LOC calcs interest daily

 

[hishandsandfeet]

@mofnah Yah you guys are right. Last time I used it. I transfered money back to the account in under 12 hours.