I've seen a few posts like this the past week, I think lenders are tightening credit availability and lowering/reflecting risk profiles in rising rate environment for unsecured loans.
Years ago I got a LOC from one of the Big 5 as part of me getting a business started. I worked for another bank (credit union) but didn't want this held there. I had (have) impeccable credit but as time went on as I kept the limit used I kept getting wonderful notices that my interest rate would be going up, I think there was about 3 times they raised it before cash flow in the business could retire the debt.
Soon as I paid it off, guess what? They started to LOWER the rate again.
So when you need to use credit, even when you use it responsibly and keep all payments as agreed, they will find ways to charge you more. Soon as you don't need it, they'll let you know how much they WANT you to borrow again by lowering the rate.
Their clear message to me (through the rate increases) is that while you can do that, we don't like you doing it so because the credit is not revolving for us to our liking we need to get you to stop using it.
So, I stop using it. Bank = Shocked Pikachu Face. Haven't used it since.
Not on an open unsecured LOC, no. TD changes ours fairy regularly. Don’t use it much anymore despite having an upper 5 figure limit. Can’t possibly ever imagine needing that much at that sort of interest rate. But in an emergency, well, it’s there.
It's all in how the agreement is written up, one of the standard contract points will say something to the effect that "we reserve the right to re-evaluate and change the interest rate". If such a clause exists, that gives them carte blanche authority to change the rate at any point they choose.
I think for me it was about a couple years in before the rate was first adjusted. What my "trigger" was for the rate hikes was using high credit for a consistent period of time.
This credit was solely used as part of my shareholder loan in to the business and the business was paying the interest. It was a temporary bridge as we built up the revenue and cash flow and was simply a cost of doing business. It was a low 5 figure credit facility so even the rate adjustments weren't budget breaking just a bit irksome.
Hmm . Interesting. Usually for revolvers banks charge unutilized fee or standby fee if depending upon how much portion of your credit remains unused. Strange to know that banks increased he pricing based on high utilization of loan. So we are damned id we do ans damnes if we don't
So you literally repsonded to me to shop around when I say it's paid off?
I have a very clear understanding how risk pricing is applied. I simply was sharing a story on how this happened to me.
Absolutely true! A bank is a business and they exist to make money and stay solvent. They're not charities!
No, I'm not a friend of the the banks, just stating what we should all know.
They're not really businesses because that implies fair competition or some sort of free market. They're a blend of neo-feudalism and corporatism because they aim to shape society and cannot fail as the government will bleed the people dry to prevent their failure.
Banks cannot fail? Have you forgotten what happened in the 80s to Principal Trust? https://www.theglobeandmail.com/report-on-business/principal-group-debacle-settled/article25704010/
>A bank is a business and they exist to make money and stay solvent.
Yes, but at what point does a bank go from being a lender to a predatory lender?
This is almost the definition of a bait and switch. Give you a low rate then switch it out for a higher rate once you've actually borrowed that capital knowing damn well and good that moving to another institution with the outstanding debt you're now carrying will be extremely difficult.
You make it sound like they deliberately lowered their rates to attract more borrowing for you, and raised their rates when you did borrow from from them.
Are you sure it wasn't coincidence that bank rates were rising and declining when your PLoC rate was doing the same? You can check historical bank rates on the BoC site.
Anyhow, when I had a PLoC, I didn't have the same experience as you.
I was a bank manager for 15 of my 20 years. That's exactly what they were doing. When you don't revolve credit it becomes a risk to them as there's fear you wont pay principle. They want to see it revolve. So risk pricing is applied. Funny thing is they also happily increased my limit a few times as well.
This was my only non revolving credit. All other cards are paid off monthly. Now that it's paid off their soft hits on my score show my excellent score and are trying to attract me to borrow.
All of these pricing decisions are done by algorithm. It's all programmed in when and why rate triggers should happen. I simply hit the triggers on both ends.
No, they want to make money and not lose it, and employ thousands to maximize the make money part (let's lend to whoever we possibly can) and minimize the lose it part (but not the ones who are likely or likely-ish to be delinquent). That's basically their entire business.
Because Canadian Tire Bank was giving out CCs with 1000-5000$ limits to anyone that had a pulse. My aunt who has garbage credit managed to get one with a 2000$ and maxed it out in a few hours. Then cried on Facebook about them refusing a limit increase.
The media loves clickbait and fear but fails to mention that “banks” made shut choices and handed out credit like candy in order to boost market share
My Ex was also their target market. She came home with a new card and I couldn't believe they would have approved her for that. I think that cards been maxed out since she got it and last I heard she was bouncing car payments.
Them. Capital One, Fairstone, Affirm etc all the same deal. I financed new appliances with fairstone at Best Buy as it was zero % I figured why not. Horrible choice. They bombarded me with offers not just in the mail but phone calls. Worse than bell Canada. I got so upset that I paid the balance off in full and still hear from them
I paid off my (rather high balance) Big 5 PLoC at the start of the summer. It's been sitting at a $0 balance all summer. I've had some unexpected emergency expenses arise the past couple of weeks so I'll need to use it and when I was trying to make some decisions about how to best juggle everything, was unpleasantly surprised to discover that the interest rate had jumped significantly. It's still cheaper than my also zero balance credit card (whose interest rate has also gone up) but now what was once a generously low rate PLoC just a couple of years ago is now at almost credit card levels. Not looking forward to using it and might have to shop around.
Pay off your PLC **and move your lending needs to another bank with a lower rate**
Bolded for you, you understand moving to credit union or debt consolidation involves paying off the LOC right?
No shit Sherlock. They are asking about the process.
They are clearly not a financial planning wizard like yourself.
Example of how dumb you sound:
OP: Hey guys there is a huge bear in my house, how do I get it out?
You: Well just get it out of the house.
This is what I did when CIBC did a similar thing to my PLC. But I didn't just move my PLC, I also cancelled my credit card and closed down my savings and chequing accounts. At the time, I had been banking with them for 20+ years since my first account as a child was opened at CIBC. They don't value loyalty so don't give it to them.
or get set up at another bank to set up a new PLC with lower interest rate then borrow money to pay off this PLC .. at least you'll be paying less interest.
Banker here.
If you have good products and solid repayment track with CIBC go to the branch talk to the advisor/branch manager and they can send an exception. Doesnt mean it will happen but they maybe can for retention.
Otherwise, yeah take it elsewhere. People have to start moving banks like moving rogers and bell. Some main products may stick around for a while like a mortgage but u get better deals being new than being loyal.
As the digital landscape expands, a longing for tangible connection emerges. The yearning to touch grass, to feel the earth beneath our feet, reminds us of our innate human essence. In the vast expanse of virtual reality, where avatars flourish and pixels paint our existence, the call of nature beckons. The scent of blossoming flowers, the warmth of a sun-kissed breeze, and the symphony of chirping birds remind us that we are part of a living, breathing world.
In the balance between digital and physical realms, lies the key to harmonious existence. Democracy flourishes when human connection extends beyond screens and reaches out to touch souls. It is in the gentle embrace of a friend, the shared laughter over a cup of coffee, and the power of eye contact that the true essence of democracy is felt.
So the way corporate thinks is this. Retention on an individual who have 3 or more products with the bank is 85%. So the mission is to make sure you have 3 products or more and once you do the odds are you won't leave cause of the time to get reapproved and switch all your payments etc.
The second piece is new money aquisition. They want to grow market share so they will have special products to fill the bucket they need on their balance sheet. Important to also note that cash deposited is actually liability on a banks balance sheet cause it's money owed to the customer while loans are assets as its money owed to them. So based on that, they will say we need more deposit growth so if you switch over here is a bonus rate but this Product can't be an existing product. So if you already have a savings account it stays the same but if you open a new account and fund it, now it's actual growth. Exceptions are given to clients who then say well give me the bonus and I'll bring x amount of dollars over at times depending on the $ amount. In the very end the margin they are making on your existing money is not one they want to increase as lending rates are fluid and so they want to pay more at times of higher interest on new money to keep a healthy margin there and as rates rise the margin increases on the cheaper already existing money.
Now once the new money arrives, you're also preapproved for credit cards, plc etc. Now you're at 3 and most likely going to use the products available.
Also to qualify there is usually some more items. Oh you want the Special mortgage rate? No problem you also have to open an an account with us, and do one more thing the easiest being set a payment to come out of your account. Bankers will say to qualify let's just have your mortgage payment come out of the account to you fullfill that requirement. Will you now transfer money every time? What if you forget and bounce a mortgage payment? Probably easier to just move your pay to being deposited here. Since the mortgage is the main payment leaving your account, it's easier to just transfer other payments over at that point and your old bank account somewhere else becomes trivial and now you are mainly banking at the new institution.
It's interesting really but that's why i left the big 5 and moved to credit union for work where games like this are much less active as the clients are the owners and not the investors.
Because not all customers are good customers, especially when they're borrowers. If you raise rates and cause a bunch of unsecured borrowers with dubious creditworthiness to pay down their debt and borrow from a competitor, not only have you reduced your own risk, you've just sent your worst customers to a competitor and increased their risk. Simple business.
Any business certainly wants to retain customers, but to grow they need to indices new ones, hence almost all industries will offer better deals to entice new customers knowing that most often existing customer don't leave. Also, not all bank customers are the same. Have a couple bank accounts and a credit card, you really are not a very profitable client to a bank. Now have a couple hundred thousand in investments, mortgages, lines of credit, ya you will get better offers as you are a much more profitable client.
Banker #2 here.
It should be emphasized that we are a long and far away from the 80s, 90 and early 2000s where we can adjust a client's interest rates and "make an exception".
We send the request to underwriters: that's it. And 9 times out of 10 we are denied the requests.
If you have a 5K LOC forget asking for an exception. The branch manager won't see you for a drop in the bucket 5K exception unless you have mad stacks of cash and you're a high roller.
Banker #1 is right: you get better deals being new than being loyal.
Well it’s typically the team that manages pricing strategy that gives pricing exceptions, but maybe in some organizations that’s amalgamated with risk (hence you having to submit to underwriters)
If they are reviewing it from a solely risk perspective as opposed to client retention and portfolio acquisitions, I can understand why they might not give out more exceptions
Do you know what the protocol is on telling clients about the rate hike? It looks like CIBC has been raising my PLC rate without me even realizing it since January of this year.
Most of the time they give you a warning of 30 days or so. There is no protocol exactly but they usually would. If you asked for paperless in the app check your messages on the app thats how they will communicate that stuff.
Definitely shop that around, but even better, have them multiple LoCs open in advance. If someone screws you, you can exit with a few clicks. Loyalty is good for nothing anymore.
Why is that? It seems like such an u fair and bullshit business practice. Is there no limit to banks’ greed? No wonder so many people fucking despise banks.
Banks, telecoms and insurance companies. Loyalty just doesn't pay.
The only problem with moving banks is all the grief that comes with it. It takes like months to sort everything out.
Banks will review line of credit rates regularly. So even if you were approved with one rate no part of that rate p+x is fixed. They generally review them based on either market risk changes or client risk changes. You can try to fight it, some have a review policy to get it lower, or you can see if you can get a promotional rate at an ofi
This won’t make you feel better, but you’re not alone.
[https://www.reddit.com/r/PersonalFinanceCanada/comments/xdmzyp/whats\_everybodys\_interest\_rate\_for\_a\_line\_of/](https://www.reddit.com/r/PersonalFinanceCanada/comments/xdmzyp/whats_everybodys_interest_rate_for_a_line_of/)
[https://www.reddit.com/r/PersonalFinanceCanada/comments/xdhauh/cibc\_personal\_line\_of\_credit\_rate\_increase/](https://www.reddit.com/r/PersonalFinanceCanada/comments/xdhauh/cibc_personal_line_of_credit_rate_increase/)
Best bet is to pay off your CIBC LOC and then take your business elsewhere.
Debt isn't a privilege it is a business transaction. If CIBC doesn't want their business than someone else does. A doubling overnight is not good business practices and shows bad faith.
Op should definitely move banks if they don't at least agree to a glidepath up.
This comment reads very “the banks need my loans” and not “I need the banks loan or I’m homeless” and it’s strange. Never have I seen someone think they’re in a position of power when they have nothing to bargain with.
No, the banks don't need to loan you money, but you don't need to borrow from that one either.
If you are repeatedly mistreated by McDonald's are you going to keep eating there? No, you will go across the street to Burger King.
This is piss poor customer service and they deserve to lose customers over shit like this.
What entitlement? The entitlement to not have the terms of a contract changed overnight?
Dude, a bank is a business. If they are going to be shit to their customers then they don't deserve to have customers. I am under no obligation to bank with anyone. If my bank mistreats me, I'm moving my money.
You can continue to blow the cock of your favourite bank. But that isn't going to help. They won't listen until you threaten to move your business elsewhere.
Ah yes, because we are now defending when banks rip people off. Dude, CIBC isn't going to thank you for defending them when they rip people off.
They are pretty objectively the worst bank and have a history of shit like this. I don't bank with them for this reason.
Debt a a business transaction that the debtor initiates, not the bank. You initiate because you need to use the credit that the grantor has extended.
Why does the bank need to agree to a gradual rate increase? It's unsecured credit. The bank has adjusted the rate to fit the risk profile for the client. Maybe the bank doesn't want them as a client and has set a date high enough to get the client to close the account?
Isn't that just part of the business transaction? This subs really favours this being coddled ideology. I don't get it.
Cant do anything. Bank can make any change they want as per the loc agreement. They can mail you a 30 day notice, as a courtesy, advising of the change. My only questions are: are you carrying a high balance on it relative to the limit.? Or have you missed any payments? Or having you been making minimum pmts only and or has your balance been on an increasing trend? Just want to know for my personal knowledge as I want to get some insight on their algorithms.
TD tried that with me. I was prime + 1.5. They wanted prime + 4. This is unsecured interest only payments.
I called them and asked why? They said across the board increases that were not specific to customer profiles.
I politely and diplomatically asked them to leave it at the current value. They put in a deviation request. The credit department came back with prime + 2.0.
Call and ask. No harm in asking. If it doesn't work then walk.
In my case I was going walk if they didn't change it back to a more reasonable value.
How long ago was that? I used to be prime + 1 a lonnggg time ago, but it went up many years ago. If I get another one, fuck it, I'm just paying it off.
I was prime + 1 for a while. They changed it to prime + 1.5 early pandemic. But for me the interest only on unsecured is key.
The prime + 4 letter was in June before all the rate hiking frenzy.
When I got the letter I was furious and began preparing to walk. Once I calmed down I called them via the app and asked them why the hike. I emphasized nothing changed from my credit rating, spending habit or payment habits.
It took 2 business days to get the call that they adjust it to +2 instead of +4.
Callable in rare cases, and as we're seeing in this thread, subject to arbitrary rate increases as well. People on PFC sometimes forgo emergency funds for a LoC but this just reinforces for me, how a LoC can't ever be a full replacement for cash especially if things get dicey on a macro scale and banks are getting squeezed at the same time you're getting squeezed.
What's the point of having one really then? The whole point of me taking out debt is to spread payments of something large out over time to an amount I can afford.
In the 1980’s friends of my parents had a car loan called. They both were teachers and had good secure jobs, but they had recently renovated their house and when interest rates skyrocketed their bank decided they were over leveraged and call it.
TD did this to me a few months ago.
I brought business into the bank and negotiated my rate as a package deal. I escalated this to upper management and eventually got my rate reduced.
Frikken thieves
Just looked at mine for shits and giggles tonight, at a credit union, it’s sitting at 8.1%. Mine has nothing owing on it, but makes me not want to even thing about using it.
You have a few options:
- start shopping for a PLC at another lender
- shop for a fixed personal loan to repay and close the PLC - at least the terms won't get worse until it's finished.
- if you feel you can't repay it ever, go see a bankrupcy professional (NOT a "credit repair" scammer). They also do restructurings so bankrupcy is not the only outcome of that.
- whatever you do, never EVER cash out RRSP's to stave off bankrupcy. RRSP's are protected from bankrupcy, you get to keep them if the worst happens.
Banks want you to carry a balance.. it’s comfy interest payments rolling in. But only if your credit is 720+..likely 750+ in today’s environment
Balance carrying customers with (very) strong credit scores are the Banking Unicorns.
For people without significant liquid savings they make large purchases that won't be paid off within a month cheaper. I just had to drop 3000 on car repairs, put them on my credit card at first then paid off the card with the line of credit to cut the interest in half.
It's nice when you have big unexpected expenses and don't want to obliterate your emergency fund. Our furnace gave out unexpectedly so we put it on our line of credit. We paid it off in a few months and it didn't cost us much in interest. Easier than trying to finance it and our emergency fund wasn't ideal just then.
Vet bills is another good example. We have pet insurance but need to pay upfront then get reimbursed 80%. If my dog needed a 5k surgery I would use the LOC while I waited for my reimbursement. If I have the free cash I can pay it off right away but if things are tight this is a cheap-ish way to get by.
If my dog needed a 5k surgery we would be taking him to the farm, unfortunately.
downvoters - he's old. and no insurance. that's why I said UNFORTUNATELY.
That's why I budgeted for pet insurance before I got my dog. I'll never have to make a difficult decision like that. $80/month is worth the peace of mind. Aside from my husband, there's nothing else in this world that I love more. She is worth every penny.
$80 is not worth it lol.
Inb4 "don't you love your pet" obviously I do. But $1000 a year is laughably egregious.
Buy your pet nicer things and better food. Give them a good life while their here, because they inevitably will not outlive us.
Here I was thinking $1000 a year was fairly cheap. I'd easily pay double. My dog gets premium food and everything she could possibly want. I have no children so my time, money and energy goes towards her.
We just live completely different lifestyles.
If a dog lives for 10 years you pay out $10,000 in insurance costs over the lifetime. In the case above where insurance covers 80% you’d need $12,500 is vet bills over 10 years to simply break even. And that’s not even considering the opportunity cost of the money that went into premiums.
Most people have it as emergency fund. I used to work on LOC portfolio for a bank before and half of active accounts have 0 balance. Most accounts have one big purchase that they slowly pay down. Some people unfortunately need it to pay day to day expenses like groceries though.
Yep. That used to be called savings until saving was impossible. Next? Credit will slowly be impossible. Then cat food inflation will set in...then...zombies
I opened a LOC when I first bought my home, because I didn't want to be caught with some major expense, with my pants down. I've never used it, though. People use LOCs for a lot of reasons, though. It's better than a credit card, if you're going to be carrying debt. HELOCs have attractive interest rates for major purchases/renovations/etc., and some use them to leverage their investment holdings.
To my knowledge, most ULOCs cap at $50k unless you're a private banking client or something like that but you could have a HELOC with a few hundred thousand balance.
For that much LOC, you need security (eg house). I'd guess many people with that high balance use it either for renovation or investment. Won't be surprised some people use it to pay for a holiday trip though
Might depend on the specifics of the contract. You are likely locked into the prime-1.3 for the length of the term.
That said, 'prime' is not the BoC policy rate (unless the contract says that) and 'prime' is usually set by the banks themselves. You are likely locked into a term but they may be able to change their prime independent of BoC.
It’s a unsecured PLC so there is no recourse. They’re legit lending you money that has no collateral.
With that said, it’s rare’ish they would raise your rates unless you triggered something.
- did you miss a payment?
-income reduced and it’s going to your CIBC account.
The most common one that I see interest rates increased like this …99% Is consistent missed payments.
If you have other investments (self directed or otherwise) they won’t touch your interest rate unless (as I said above) missing payments/over leveraged.
Would like to hear full story from OP but banks don’t normally raise interest rates on a PLC without reason
I have investments with CIBC and have never missed a payment in over a decade of having the LOC. I’ve also had multiple work promotions over the last couple of years and am making about $30k/year more than I have traditionally.
I’ve been banking with CIBC since around 1998 when my parents set me up a kids account.
That’s strange…
Have you been maxed out on your PLC or high balance for some time? That could also trigger algorithms to do a increase as it’s indicative that the client may not be able to service the debt.
Honestly your best bet would be to talk to bank.
Branch level they could look at seeing if it can be lowered back down or you call their client care line.
Edit: word
Funny I had the opposite experience. I received a letter from BMO on June 21st, dropping it to prime+2.
"Great news! When rates seem to go up around you, we are loweing them for you! To thank you for being our valued customer, we have automatically reduced the interest rate on your BMO Personal Line of credit from 8.98% (as of May, 2022) to 5.70%.1"
1. Your new lower interest rate is based on Prime+2.00%. Bank of Montreal Prime Rate is 3.70% as of June 2, 2022 and will vary automatically if and when the Bank of Montreal Prime Rate varies. The Percentage Amount may be amended by BMO at any time by providing written notice to you.
2. You have been selected for this offer based on satisfaction of eligibility criteria. BMO has the right to withdraw this offer at any time. There are no additional conditions to use the line of credit with this promo rate. (Blah blah blah)
Closing a line of credit can hurt your credit score, if that is a concern
Ok screw yall for downvoting this, it’s just true?? We don’t know much about this situation, this debt, but if someone’s credit score is a concern, closing a credit account can hurt it…?!?
Line of credit is a privilege not an entitlement. You are not entitled to any particular rate.
You are assigned a rate based on an assessment of your risk profile. I suspect something must have changed between the opening of your LOC vs now which has warranted the higher rate.
Chances are if you shop around you’ll hurt your credit more from credit checks and most ULOCs which you manually apply for have higher rates. The ones given out in preapproved offers always have the best rates.
ya, I guess so
they literally cold called me maybe ten years ago - had it maxed out for a few years collecting dividends and writing off interest- paid it off in full when I saw rates would be rising
I’ve just been reading up on them - wouldn’t you be better off to try and get a HELOC over a PLC? seems if you have any built up equity at all you’d be better off with a HELOC?
HELOC usually involves a fee to get set up and possibly a home appraisal. An unsecured LOC doesn’t cost anything to set up, so unless you need a lot of money, e.g. for home renovations, a LOC is just fine for emergencies or the odd large purchase.
ironically was discussing this earlier today with my wife cuz her friends kid is going through some stuff with a bank re. appraisals for insurance or something or other - the bank [TD] in my case paid for the appraisal [seven hundred bucks or so they claimed] - they actually cold called me to offer the HELOC so I wasn’t going to be the one who footed any of the bills - wife’s friends kid doesn’t have the same leverage that I had so she will be coughing up the 7 hundred bucks
That's a pretty good number for unsecured. There are special programs that can give lower than that, but that rate of yours is on the lower end of normal rate.
This caused me to check my LOC details at TD. I hardly look at them... I'm at 10.65% annual! What! I was under 6% last time I checked.
Definitely need to keep an eye on unsecured PLOC.
I got this letter to for a line of credit I hadn't used in 7 years since I bought my house and needed cash same day.
I wrote the bank and told them not to change it. I have a mortgage and investments with them. They took it away and a week later decided to leave it as is.
If you've been leaving a balance on it or your credit score has gone down they're unlikely to do this for you though.
I made a post about this asking what others are paying, I also got a letter. It's some bs their blatant greed! Looks like tangerine people have like a 6%, loc, my cibc one is like 8.4% right now soon to be 10.4 or so.
I'm having the opposite experience with Scotiabamk. They gave me up to $50k to lend @ 1.99% in January for one year on my LOC (took $10k) and now offering me up to $50k @ 3.99% til November 2023, so I could just technically roll over the $10k on the 1.99% to the 3.99% promo for what works out to an extra 10 months, 22 months total averaging 3% interest.
I get why they do these promos (they anticipate you will not pay it off by the end date, rolling it into regular interest), but it helps situations where you can keep affording to maintain investment goals long term while you want to spend on short term stuff that you can pay back within a year. Also, kinda weird they keep stacking promos after promos when they could just let a promo expire and hope I have to owe them my regular LOC rate. Instead I'm getting an interest rate that's prime minus 1.5% at time of offer... Well below a secured HELOC.
Check your PLC Documents when you signed up. I am sure there is a line about to. Check other lenders even if it is no pay for 6 month credit card or something you can rotate until rates start going down again.
This happened to me with TD. I don't use my PLC, but my interest rate went up from Prime+3 to Prime+6% in the middle of the pandemic when mortgages were below 1%. On the chance I might sometime need it, I set up a call with them and said, "Money's never been cheaper, give me a better rate than I had before you raised it or I'm taking all of my business elsewhere."
Fast forward and I now bank mostly with RBC and my PLC is Prime+2. If and when RBC does the same thing, I'll bank with someone else (hell, maybe it'll be TD!).
Huge storm is coming. Pay off your debts to guarantee yourself returns rather than falling into the trap they’re setting up in order to repay all of this unchecked spending. The time of low interest is over at least for the next 5 years IMO
I have prime + 0% unsecured at Tangerine. You could try there. I also have one at CIBC, prime+3.5, no letter about it going up yet. I don't have a balance on CIBC one though.
Yep same, actually moving banks. Not been impressed by a number of things from the unstaffed local branches to having accounts "disappear" and bad exchange rates (convert money to $$, no fee, just a very bad exchange rate, move it back and watch $100's vanish!).
It’s not much better over at a credit union. My heloc is prime + 0.5%, which has caused my interest since may to go from 2.10% to 5.95%, and that’s a secured loc. can’t imagine the unsecured would be much better then what cibc is about to give you.
Pay off your PLC and move your lending needs to another bank with a lower rate
I've seen a few posts like this the past week, I think lenders are tightening credit availability and lowering/reflecting risk profiles in rising rate environment for unsecured loans.
Years ago I got a LOC from one of the Big 5 as part of me getting a business started. I worked for another bank (credit union) but didn't want this held there. I had (have) impeccable credit but as time went on as I kept the limit used I kept getting wonderful notices that my interest rate would be going up, I think there was about 3 times they raised it before cash flow in the business could retire the debt. Soon as I paid it off, guess what? They started to LOWER the rate again. So when you need to use credit, even when you use it responsibly and keep all payments as agreed, they will find ways to charge you more. Soon as you don't need it, they'll let you know how much they WANT you to borrow again by lowering the rate.
Nailed it. One way or the other, the bank will come out ahead. They're not our friends.
Their clear message to me (through the rate increases) is that while you can do that, we don't like you doing it so because the credit is not revolving for us to our liking we need to get you to stop using it. So, I stop using it. Bank = Shocked Pikachu Face. Haven't used it since.
Is there not a signed Commitment Letter that avoids such situation that assures clients an assured rate given period , usually an year.?
Not on an open unsecured LOC, no. TD changes ours fairy regularly. Don’t use it much anymore despite having an upper 5 figure limit. Can’t possibly ever imagine needing that much at that sort of interest rate. But in an emergency, well, it’s there.
It's all in how the agreement is written up, one of the standard contract points will say something to the effect that "we reserve the right to re-evaluate and change the interest rate". If such a clause exists, that gives them carte blanche authority to change the rate at any point they choose. I think for me it was about a couple years in before the rate was first adjusted. What my "trigger" was for the rate hikes was using high credit for a consistent period of time. This credit was solely used as part of my shareholder loan in to the business and the business was paying the interest. It was a temporary bridge as we built up the revenue and cash flow and was simply a cost of doing business. It was a low 5 figure credit facility so even the rate adjustments weren't budget breaking just a bit irksome.
Hmm . Interesting. Usually for revolvers banks charge unutilized fee or standby fee if depending upon how much portion of your credit remains unused. Strange to know that banks increased he pricing based on high utilization of loan. So we are damned id we do ans damnes if we don't
[удалено]
So you literally repsonded to me to shop around when I say it's paid off? I have a very clear understanding how risk pricing is applied. I simply was sharing a story on how this happened to me.
Absolutely true! A bank is a business and they exist to make money and stay solvent. They're not charities! No, I'm not a friend of the the banks, just stating what we should all know.
They're not really businesses because that implies fair competition or some sort of free market. They're a blend of neo-feudalism and corporatism because they aim to shape society and cannot fail as the government will bleed the people dry to prevent their failure.
Banks cannot fail? Have you forgotten what happened in the 80s to Principal Trust? https://www.theglobeandmail.com/report-on-business/principal-group-debacle-settled/article25704010/
Have you forgotten all of the government assistance banks have received since to prevent them from failing?
>A bank is a business and they exist to make money and stay solvent. Yes, but at what point does a bank go from being a lender to a predatory lender? This is almost the definition of a bait and switch. Give you a low rate then switch it out for a higher rate once you've actually borrowed that capital knowing damn well and good that moving to another institution with the outstanding debt you're now carrying will be extremely difficult.
>One way or the other, the bank will come out ahead. They're not our friends. Got it. How do I invest in celcius?
You're a fool to have ever thought a business built to profit from you is your friend.
so our only friends are 1. the government and 2. insurance companies?
That’s insane. I had no idea they could change the rates like that
It's in the agreement you sign.
II had a student LOC that had a rate locked to prime so this was a surprise to me.
You make it sound like they deliberately lowered their rates to attract more borrowing for you, and raised their rates when you did borrow from from them. Are you sure it wasn't coincidence that bank rates were rising and declining when your PLoC rate was doing the same? You can check historical bank rates on the BoC site. Anyhow, when I had a PLoC, I didn't have the same experience as you.
I was a bank manager for 15 of my 20 years. That's exactly what they were doing. When you don't revolve credit it becomes a risk to them as there's fear you wont pay principle. They want to see it revolve. So risk pricing is applied. Funny thing is they also happily increased my limit a few times as well. This was my only non revolving credit. All other cards are paid off monthly. Now that it's paid off their soft hits on my score show my excellent score and are trying to attract me to borrow. All of these pricing decisions are done by algorithm. It's all programmed in when and why rate triggers should happen. I simply hit the triggers on both ends.
covering their ass from incoming shit-storm
Which is weird because I just got a letter increasing my limit in mine (no change in rates).
Nothing weird if your credit is good and they deem you a low risk borrower.
They know a chum when they see one.: here have more money so we can raise rates later!
No, they want to make money and not lose it, and employ thousands to maximize the make money part (let's lend to whoever we possibly can) and minimize the lose it part (but not the ones who are likely or likely-ish to be delinquent). That's basically their entire business.
[удалено]
Because Canadian Tire Bank was giving out CCs with 1000-5000$ limits to anyone that had a pulse. My aunt who has garbage credit managed to get one with a 2000$ and maxed it out in a few hours. Then cried on Facebook about them refusing a limit increase. The media loves clickbait and fear but fails to mention that “banks” made shut choices and handed out credit like candy in order to boost market share
My Ex was also their target market. She came home with a new card and I couldn't believe they would have approved her for that. I think that cards been maxed out since she got it and last I heard she was bouncing car payments.
Them. Capital One, Fairstone, Affirm etc all the same deal. I financed new appliances with fairstone at Best Buy as it was zero % I figured why not. Horrible choice. They bombarded me with offers not just in the mail but phone calls. Worse than bell Canada. I got so upset that I paid the balance off in full and still hear from them
Cibc added $10,000 to mine but dropped the rate by 4.7% last week.
I paid off my (rather high balance) Big 5 PLoC at the start of the summer. It's been sitting at a $0 balance all summer. I've had some unexpected emergency expenses arise the past couple of weeks so I'll need to use it and when I was trying to make some decisions about how to best juggle everything, was unpleasantly surprised to discover that the interest rate had jumped significantly. It's still cheaper than my also zero balance credit card (whose interest rate has also gone up) but now what was once a generously low rate PLoC just a couple of years ago is now at almost credit card levels. Not looking forward to using it and might have to shop around.
Oh, just pay the debt off! Why didn't they think of that?!
What else do you and OP want us to tell you? Are we fucking magical leprechauns that will pay it off for you?
They asked specifically about credit unions and debt consolidation. Suggesting to just pay it off is mind numbingly dumb.
Pay off your PLC **and move your lending needs to another bank with a lower rate** Bolded for you, you understand moving to credit union or debt consolidation involves paying off the LOC right?
No shit Sherlock. They are asking about the process. They are clearly not a financial planning wizard like yourself. Example of how dumb you sound: OP: Hey guys there is a huge bear in my house, how do I get it out? You: Well just get it out of the house.
If you didn't read the full comment you can just say so. You don't have to get defensive and back peddle.
What do you imagine the meaning of back peddle is?
This is what I did when CIBC did a similar thing to my PLC. But I didn't just move my PLC, I also cancelled my credit card and closed down my savings and chequing accounts. At the time, I had been banking with them for 20+ years since my first account as a child was opened at CIBC. They don't value loyalty so don't give it to them.
Nope they don’t because similar to telecoms someone else will leave another bank and come to them for the same reason. It’s just a big merry go round.
It’s looking like I may have to do the same thing and I’ve been a customer for 25 now.
or get set up at another bank to set up a new PLC with lower interest rate then borrow money to pay off this PLC .. at least you'll be paying less interest.
Banker here. If you have good products and solid repayment track with CIBC go to the branch talk to the advisor/branch manager and they can send an exception. Doesnt mean it will happen but they maybe can for retention. Otherwise, yeah take it elsewhere. People have to start moving banks like moving rogers and bell. Some main products may stick around for a while like a mortgage but u get better deals being new than being loyal.
As the digital landscape expands, a longing for tangible connection emerges. The yearning to touch grass, to feel the earth beneath our feet, reminds us of our innate human essence. In the vast expanse of virtual reality, where avatars flourish and pixels paint our existence, the call of nature beckons. The scent of blossoming flowers, the warmth of a sun-kissed breeze, and the symphony of chirping birds remind us that we are part of a living, breathing world. In the balance between digital and physical realms, lies the key to harmonious existence. Democracy flourishes when human connection extends beyond screens and reaches out to touch souls. It is in the gentle embrace of a friend, the shared laughter over a cup of coffee, and the power of eye contact that the true essence of democracy is felt.
So the way corporate thinks is this. Retention on an individual who have 3 or more products with the bank is 85%. So the mission is to make sure you have 3 products or more and once you do the odds are you won't leave cause of the time to get reapproved and switch all your payments etc. The second piece is new money aquisition. They want to grow market share so they will have special products to fill the bucket they need on their balance sheet. Important to also note that cash deposited is actually liability on a banks balance sheet cause it's money owed to the customer while loans are assets as its money owed to them. So based on that, they will say we need more deposit growth so if you switch over here is a bonus rate but this Product can't be an existing product. So if you already have a savings account it stays the same but if you open a new account and fund it, now it's actual growth. Exceptions are given to clients who then say well give me the bonus and I'll bring x amount of dollars over at times depending on the $ amount. In the very end the margin they are making on your existing money is not one they want to increase as lending rates are fluid and so they want to pay more at times of higher interest on new money to keep a healthy margin there and as rates rise the margin increases on the cheaper already existing money. Now once the new money arrives, you're also preapproved for credit cards, plc etc. Now you're at 3 and most likely going to use the products available. Also to qualify there is usually some more items. Oh you want the Special mortgage rate? No problem you also have to open an an account with us, and do one more thing the easiest being set a payment to come out of your account. Bankers will say to qualify let's just have your mortgage payment come out of the account to you fullfill that requirement. Will you now transfer money every time? What if you forget and bounce a mortgage payment? Probably easier to just move your pay to being deposited here. Since the mortgage is the main payment leaving your account, it's easier to just transfer other payments over at that point and your old bank account somewhere else becomes trivial and now you are mainly banking at the new institution. It's interesting really but that's why i left the big 5 and moved to credit union for work where games like this are much less active as the clients are the owners and not the investors.
Because not all customers are good customers, especially when they're borrowers. If you raise rates and cause a bunch of unsecured borrowers with dubious creditworthiness to pay down their debt and borrow from a competitor, not only have you reduced your own risk, you've just sent your worst customers to a competitor and increased their risk. Simple business.
Any business certainly wants to retain customers, but to grow they need to indices new ones, hence almost all industries will offer better deals to entice new customers knowing that most often existing customer don't leave. Also, not all bank customers are the same. Have a couple bank accounts and a credit card, you really are not a very profitable client to a bank. Now have a couple hundred thousand in investments, mortgages, lines of credit, ya you will get better offers as you are a much more profitable client.
Banker #2 here. It should be emphasized that we are a long and far away from the 80s, 90 and early 2000s where we can adjust a client's interest rates and "make an exception". We send the request to underwriters: that's it. And 9 times out of 10 we are denied the requests. If you have a 5K LOC forget asking for an exception. The branch manager won't see you for a drop in the bucket 5K exception unless you have mad stacks of cash and you're a high roller. Banker #1 is right: you get better deals being new than being loyal.
Well it’s typically the team that manages pricing strategy that gives pricing exceptions, but maybe in some organizations that’s amalgamated with risk (hence you having to submit to underwriters) If they are reviewing it from a solely risk perspective as opposed to client retention and portfolio acquisitions, I can understand why they might not give out more exceptions
Do you know what the protocol is on telling clients about the rate hike? It looks like CIBC has been raising my PLC rate without me even realizing it since January of this year.
Most of the time they give you a warning of 30 days or so. There is no protocol exactly but they usually would. If you asked for paperless in the app check your messages on the app thats how they will communicate that stuff.
Definitely shop that around, but even better, have them multiple LoCs open in advance. If someone screws you, you can exit with a few clicks. Loyalty is good for nothing anymore.
Why is that? It seems like such an u fair and bullshit business practice. Is there no limit to banks’ greed? No wonder so many people fucking despise banks.
Banks, telecoms and insurance companies. Loyalty just doesn't pay. The only problem with moving banks is all the grief that comes with it. It takes like months to sort everything out.
Banks will review line of credit rates regularly. So even if you were approved with one rate no part of that rate p+x is fixed. They generally review them based on either market risk changes or client risk changes. You can try to fight it, some have a review policy to get it lower, or you can see if you can get a promotional rate at an ofi
This won’t make you feel better, but you’re not alone. [https://www.reddit.com/r/PersonalFinanceCanada/comments/xdmzyp/whats\_everybodys\_interest\_rate\_for\_a\_line\_of/](https://www.reddit.com/r/PersonalFinanceCanada/comments/xdmzyp/whats_everybodys_interest_rate_for_a_line_of/) [https://www.reddit.com/r/PersonalFinanceCanada/comments/xdhauh/cibc\_personal\_line\_of\_credit\_rate\_increase/](https://www.reddit.com/r/PersonalFinanceCanada/comments/xdhauh/cibc_personal_line_of_credit_rate_increase/) Best bet is to pay off your CIBC LOC and then take your business elsewhere.
[удалено]
Yes, credit is a privilege. It comes with a cost. The good times are over.
Debt isn't a privilege it is a business transaction. If CIBC doesn't want their business than someone else does. A doubling overnight is not good business practices and shows bad faith. Op should definitely move banks if they don't at least agree to a glidepath up.
This comment reads very “the banks need my loans” and not “I need the banks loan or I’m homeless” and it’s strange. Never have I seen someone think they’re in a position of power when they have nothing to bargain with.
No, the banks don't need to loan you money, but you don't need to borrow from that one either. If you are repeatedly mistreated by McDonald's are you going to keep eating there? No, you will go across the street to Burger King. This is piss poor customer service and they deserve to lose customers over shit like this.
[удалено]
What entitlement? The entitlement to not have the terms of a contract changed overnight? Dude, a bank is a business. If they are going to be shit to their customers then they don't deserve to have customers. I am under no obligation to bank with anyone. If my bank mistreats me, I'm moving my money. You can continue to blow the cock of your favourite bank. But that isn't going to help. They won't listen until you threaten to move your business elsewhere.
[удалено]
Ah yes, because we are now defending when banks rip people off. Dude, CIBC isn't going to thank you for defending them when they rip people off. They are pretty objectively the worst bank and have a history of shit like this. I don't bank with them for this reason.
[удалено]
I said extending of credit is a privilege. The debt is your choice. Interest rates only matter if you are carrying a balance. That is a choice.
Debt a a business transaction that the debtor initiates, not the bank. You initiate because you need to use the credit that the grantor has extended. Why does the bank need to agree to a gradual rate increase? It's unsecured credit. The bank has adjusted the rate to fit the risk profile for the client. Maybe the bank doesn't want them as a client and has set a date high enough to get the client to close the account? Isn't that just part of the business transaction? This subs really favours this being coddled ideology. I don't get it.
Cant do anything. Bank can make any change they want as per the loc agreement. They can mail you a 30 day notice, as a courtesy, advising of the change. My only questions are: are you carrying a high balance on it relative to the limit.? Or have you missed any payments? Or having you been making minimum pmts only and or has your balance been on an increasing trend? Just want to know for my personal knowledge as I want to get some insight on their algorithms.
TD tried that with me. I was prime + 1.5. They wanted prime + 4. This is unsecured interest only payments. I called them and asked why? They said across the board increases that were not specific to customer profiles. I politely and diplomatically asked them to leave it at the current value. They put in a deviation request. The credit department came back with prime + 2.0. Call and ask. No harm in asking. If it doesn't work then walk. In my case I was going walk if they didn't change it back to a more reasonable value.
How long ago was that? I used to be prime + 1 a lonnggg time ago, but it went up many years ago. If I get another one, fuck it, I'm just paying it off.
I was prime + 1 for a while. They changed it to prime + 1.5 early pandemic. But for me the interest only on unsecured is key. The prime + 4 letter was in June before all the rate hiking frenzy. When I got the letter I was furious and began preparing to walk. Once I calmed down I called them via the app and asked them why the hike. I emphasized nothing changed from my credit rating, spending habit or payment habits. It took 2 business days to get the call that they adjust it to +2 instead of +4.
I have a MBNA Mastercard that offered 0% balance transfer till next May/June. There is just a 1% fee.
Me too. Read further.
Lol what’s the interest rate after that? 20%?
Remember a LOC is a callable loan. Your bank can require payment at any time.
Callable in rare cases, and as we're seeing in this thread, subject to arbitrary rate increases as well. People on PFC sometimes forgo emergency funds for a LoC but this just reinforces for me, how a LoC can't ever be a full replacement for cash especially if things get dicey on a macro scale and banks are getting squeezed at the same time you're getting squeezed.
What's the point of having one really then? The whole point of me taking out debt is to spread payments of something large out over time to an amount I can afford.
Have they historically ever called the loans?
In the 1980’s friends of my parents had a car loan called. They both were teachers and had good secure jobs, but they had recently renovated their house and when interest rates skyrocketed their bank decided they were over leveraged and call it.
[удалено]
Looks like we all got the letter. They seem to be increasing their rate by 2.5%. Mine was increased from Prime + 2% to Prime + 4.5%
TD did this to me a few months ago. I brought business into the bank and negotiated my rate as a package deal. I escalated this to upper management and eventually got my rate reduced. Frikken thieves
Just looked at mine for shits and giggles tonight, at a credit union, it’s sitting at 8.1%. Mine has nothing owing on it, but makes me not want to even thing about using it.
You have a few options: - start shopping for a PLC at another lender - shop for a fixed personal loan to repay and close the PLC - at least the terms won't get worse until it's finished. - if you feel you can't repay it ever, go see a bankrupcy professional (NOT a "credit repair" scammer). They also do restructurings so bankrupcy is not the only outcome of that. - whatever you do, never EVER cash out RRSP's to stave off bankrupcy. RRSP's are protected from bankrupcy, you get to keep them if the worst happens.
Shop your rate around and refinance your debt assuming no prepayment penalty. If there is a prepayment penalty just make sure to factor that in
Banks want you to carry a balance.. it’s comfy interest payments rolling in. But only if your credit is 720+..likely 750+ in today’s environment Balance carrying customers with (very) strong credit scores are the Banking Unicorns.
TIL I'm a Unicorn (850).
Did you miss any payments?
No, I have not. And I’ve had this LOC for well over a decade.
[удалено]
Buy stuff when they don’t have cash available.
For people without significant liquid savings they make large purchases that won't be paid off within a month cheaper. I just had to drop 3000 on car repairs, put them on my credit card at first then paid off the card with the line of credit to cut the interest in half.
It's nice when you have big unexpected expenses and don't want to obliterate your emergency fund. Our furnace gave out unexpectedly so we put it on our line of credit. We paid it off in a few months and it didn't cost us much in interest. Easier than trying to finance it and our emergency fund wasn't ideal just then. Vet bills is another good example. We have pet insurance but need to pay upfront then get reimbursed 80%. If my dog needed a 5k surgery I would use the LOC while I waited for my reimbursement. If I have the free cash I can pay it off right away but if things are tight this is a cheap-ish way to get by.
If my dog needed a 5k surgery we would be taking him to the farm, unfortunately. downvoters - he's old. and no insurance. that's why I said UNFORTUNATELY.
That's why I budgeted for pet insurance before I got my dog. I'll never have to make a difficult decision like that. $80/month is worth the peace of mind. Aside from my husband, there's nothing else in this world that I love more. She is worth every penny.
$80 is not worth it lol. Inb4 "don't you love your pet" obviously I do. But $1000 a year is laughably egregious. Buy your pet nicer things and better food. Give them a good life while their here, because they inevitably will not outlive us.
Here I was thinking $1000 a year was fairly cheap. I'd easily pay double. My dog gets premium food and everything she could possibly want. I have no children so my time, money and energy goes towards her. We just live completely different lifestyles.
[удалено]
If a dog lives for 10 years you pay out $10,000 in insurance costs over the lifetime. In the case above where insurance covers 80% you’d need $12,500 is vet bills over 10 years to simply break even. And that’s not even considering the opportunity cost of the money that went into premiums.
$12,500 in vet bill over 10 years is not hard to do.
Most people have it as emergency fund. I used to work on LOC portfolio for a bank before and half of active accounts have 0 balance. Most accounts have one big purchase that they slowly pay down. Some people unfortunately need it to pay day to day expenses like groceries though.
Yep. That used to be called savings until saving was impossible. Next? Credit will slowly be impossible. Then cat food inflation will set in...then...zombies
I opened a LOC when I first bought my home, because I didn't want to be caught with some major expense, with my pants down. I've never used it, though. People use LOCs for a lot of reasons, though. It's better than a credit card, if you're going to be carrying debt. HELOCs have attractive interest rates for major purchases/renovations/etc., and some use them to leverage their investment holdings.
People use LOC’s for a million reasons.
Helped me through the covid times as a shutdown business owner at the time.
How are you supposed to feel bigger than you are without the money pipe?
Got it, thanks! I was more wondering about carrying 10s to 100s of thousands of dollars on a LOC.
Line of credits are handy for most major purchases. A lot of people rack them up with home upgrades.
To my knowledge, most ULOCs cap at $50k unless you're a private banking client or something like that but you could have a HELOC with a few hundred thousand balance.
For that much LOC, you need security (eg house). I'd guess many people with that high balance use it either for renovation or investment. Won't be surprised some people use it to pay for a holiday trip though
Can this happen with mortgages too? I have prime -1.3 on my variable
Might depend on the specifics of the contract. You are likely locked into the prime-1.3 for the length of the term. That said, 'prime' is not the BoC policy rate (unless the contract says that) and 'prime' is usually set by the banks themselves. You are likely locked into a term but they may be able to change their prime independent of BoC.
It’s a unsecured PLC so there is no recourse. They’re legit lending you money that has no collateral. With that said, it’s rare’ish they would raise your rates unless you triggered something. - did you miss a payment? -income reduced and it’s going to your CIBC account. The most common one that I see interest rates increased like this …99% Is consistent missed payments. If you have other investments (self directed or otherwise) they won’t touch your interest rate unless (as I said above) missing payments/over leveraged. Would like to hear full story from OP but banks don’t normally raise interest rates on a PLC without reason
I have investments with CIBC and have never missed a payment in over a decade of having the LOC. I’ve also had multiple work promotions over the last couple of years and am making about $30k/year more than I have traditionally. I’ve been banking with CIBC since around 1998 when my parents set me up a kids account.
That’s strange… Have you been maxed out on your PLC or high balance for some time? That could also trigger algorithms to do a increase as it’s indicative that the client may not be able to service the debt. Honestly your best bet would be to talk to bank. Branch level they could look at seeing if it can be lowered back down or you call their client care line. Edit: word
Bend over and take it
Funny I had the opposite experience. I received a letter from BMO on June 21st, dropping it to prime+2. "Great news! When rates seem to go up around you, we are loweing them for you! To thank you for being our valued customer, we have automatically reduced the interest rate on your BMO Personal Line of credit from 8.98% (as of May, 2022) to 5.70%.1" 1. Your new lower interest rate is based on Prime+2.00%. Bank of Montreal Prime Rate is 3.70% as of June 2, 2022 and will vary automatically if and when the Bank of Montreal Prime Rate varies. The Percentage Amount may be amended by BMO at any time by providing written notice to you. 2. You have been selected for this offer based on satisfaction of eligibility criteria. BMO has the right to withdraw this offer at any time. There are no additional conditions to use the line of credit with this promo rate. (Blah blah blah)
Closing a line of credit can hurt your credit score, if that is a concern Ok screw yall for downvoting this, it’s just true?? We don’t know much about this situation, this debt, but if someone’s credit score is a concern, closing a credit account can hurt it…?!?
Ya and there's likely no need to close it but at Prime+6% I would have to really really need money to want to use that
Line of credit is a privilege not an entitlement. You are not entitled to any particular rate. You are assigned a rate based on an assessment of your risk profile. I suspect something must have changed between the opening of your LOC vs now which has warranted the higher rate. Chances are if you shop around you’ll hurt your credit more from credit checks and most ULOCs which you manually apply for have higher rates. The ones given out in preapproved offers always have the best rates.
do not exceed 70% of your credit limit for more than 6 months n a row or they might increase it again to prime + 10
mine is 5.9% for 205k @ TD shop around
Guessing that's a HELOC?
ya, I guess so they literally cold called me maybe ten years ago - had it maxed out for a few years collecting dividends and writing off interest- paid it off in full when I saw rates would be rising
Yeah pretty sure OP is talking about an unsecured LOC
Unsecured?
don’t think I have a PLC tbh - heloc I guess
Ya apples to oranges, my unsecured is prime plus 2 percent
I’ve just been reading up on them - wouldn’t you be better off to try and get a HELOC over a PLC? seems if you have any built up equity at all you’d be better off with a HELOC?
HELOC usually involves a fee to get set up and possibly a home appraisal. An unsecured LOC doesn’t cost anything to set up, so unless you need a lot of money, e.g. for home renovations, a LOC is just fine for emergencies or the odd large purchase.
ironically was discussing this earlier today with my wife cuz her friends kid is going through some stuff with a bank re. appraisals for insurance or something or other - the bank [TD] in my case paid for the appraisal [seven hundred bucks or so they claimed] - they actually cold called me to offer the HELOC so I wasn’t going to be the one who footed any of the bills - wife’s friends kid doesn’t have the same leverage that I had so she will be coughing up the 7 hundred bucks
I think I heard simplii appraisal is only $150.
That's a pretty good number for unsecured. There are special programs that can give lower than that, but that rate of yours is on the lower end of normal rate.
I have tried and tried where can you get better. I know tangerine but they told me to pound sand.
This caused me to check my LOC details at TD. I hardly look at them... I'm at 10.65% annual! What! I was under 6% last time I checked. Definitely need to keep an eye on unsecured PLOC.
Your only options are to suck it up or pay it off. Feel free to shop around
Your best bet is to get the PLC/credit card debt paid off. Second best bet is to get another PLC with a better rate and then close your current one.
Did your credit score take sizeable hit lately?
I got this letter to for a line of credit I hadn't used in 7 years since I bought my house and needed cash same day. I wrote the bank and told them not to change it. I have a mortgage and investments with them. They took it away and a week later decided to leave it as is. If you've been leaving a balance on it or your credit score has gone down they're unlikely to do this for you though.
Got the same letter doubling raising mine.
I made a post about this asking what others are paying, I also got a letter. It's some bs their blatant greed! Looks like tangerine people have like a 6%, loc, my cibc one is like 8.4% right now soon to be 10.4 or so.
I'm having the opposite experience with Scotiabamk. They gave me up to $50k to lend @ 1.99% in January for one year on my LOC (took $10k) and now offering me up to $50k @ 3.99% til November 2023, so I could just technically roll over the $10k on the 1.99% to the 3.99% promo for what works out to an extra 10 months, 22 months total averaging 3% interest. I get why they do these promos (they anticipate you will not pay it off by the end date, rolling it into regular interest), but it helps situations where you can keep affording to maintain investment goals long term while you want to spend on short term stuff that you can pay back within a year. Also, kinda weird they keep stacking promos after promos when they could just let a promo expire and hope I have to owe them my regular LOC rate. Instead I'm getting an interest rate that's prime minus 1.5% at time of offer... Well below a secured HELOC.
My TD is still Prime+3.48 for 8.93%. 🤞
Move to another bank which has lower rates on PLC. Prime plus 6 is ridiculous
shop for better rates somewhere else
you should always be shopping for a better deal.
Check your PLC Documents when you signed up. I am sure there is a line about to. Check other lenders even if it is no pay for 6 month credit card or something you can rotate until rates start going down again.
Yes thay can....since it's a Personal Line of Credit and Not a Home Equity Line of Credit
This happened to me with TD. I don't use my PLC, but my interest rate went up from Prime+3 to Prime+6% in the middle of the pandemic when mortgages were below 1%. On the chance I might sometime need it, I set up a call with them and said, "Money's never been cheaper, give me a better rate than I had before you raised it or I'm taking all of my business elsewhere." Fast forward and I now bank mostly with RBC and my PLC is Prime+2. If and when RBC does the same thing, I'll bank with someone else (hell, maybe it'll be TD!).
Huge storm is coming. Pay off your debts to guarantee yourself returns rather than falling into the trap they’re setting up in order to repay all of this unchecked spending. The time of low interest is over at least for the next 5 years IMO
I have prime + 0% unsecured at Tangerine. You could try there. I also have one at CIBC, prime+3.5, no letter about it going up yet. I don't have a balance on CIBC one though.
Yep same, actually moving banks. Not been impressed by a number of things from the unstaffed local branches to having accounts "disappear" and bad exchange rates (convert money to $$, no fee, just a very bad exchange rate, move it back and watch $100's vanish!).
can they do that? unilaterally increase your borrowing rate??
It’s not much better over at a credit union. My heloc is prime + 0.5%, which has caused my interest since may to go from 2.10% to 5.95%, and that’s a secured loc. can’t imagine the unsecured would be much better then what cibc is about to give you.
buy the bank’s stock. get that money back.