How to Get the Best Deal on a Medical Student Line of Credit

Every bank in Canada worth its salt offers some variation of a Medical Student Line of Credit. Basically, it’s a big-ass loan from the bank to help pay for tuition and living expenses, and can be for as much as $275,000 as of August 2015.

Since it’s a line of credit, once you’re approved for the loan, you can use as much or as little of the $275,000 as you want, and you’ll only pay interest on the amount that you use, starting on the day that you withdraw the money. Until you graduate from residency, you don’t need to repay what you borrow, but you do need to make interest payments every month, even while you’re in school. This is the main reason why everyone should be applying for a government student loan first, since they’re interest and payment-free until you graduate. But for most people, government loans aren’t enough to live on, and many of us will have to turn to a line of credit to make ends meet.

Fortunately, medical student lines of credit are offered at the prime interest rate, which is an extremely favorable rate usually reserved for the banks’ best customers, e.g. medical students. The prime rate is currently 2.7%, but it isn’t fixed in stone, and can change in an instant based on the whims of the Bank of Canada. The prime rate is hovering just above its all-time low right now, so there’s a good chance it’ll be higher at some point during your medical training career. Hence, it’s a good idea to keep borrowing to a minimum because even a small increase in the prime rate can mean hundreds of dollars a year in extra interest payments.

Canada Prime Lending Rate History
The Prime rate fluctuates a lot, so borrow cautiously!

Since almost every bank will offer you a line of credit of $275,000 at prime rate, you might think they’re pretty much all the same and it doesn’t matter which bank you go to, but nothing could be further from the truth.

The fact is, all the banks do offer the same basic terms, but there are huge differences in the side perks on offer. Each bank wants to win your business and get you hooked on their services so when you’re a practicing doctor you’ll keep taking out loans and mortgages from them. It’s a privilege for them to get you as a customer.

So how do you get the best deal?

Never deal with anyone who isn’t a Medical Student Line of Credit Specialist

If a bank employee’s title doesn’t include the words “medical student adviser” or something to that effect, don’t bother talking to them about a line of credit. Most bank employees don’t deal with medical students very often so the only ones with much expertise are the specialists.

Scotiabank Medical Adviser
Only talk to people on this list

Don’t walk into a bank unannounced and expect to deal with a employee competent in medical student lending. Every bank in every city with a medical school has a specialist just for you – find out who they are and make an appointment to see them.

Shop around

Call or email all the medical student advisers in your area and ask what’s their best offer on a line of credit, bank account and credit card. Don’t be loyal to any bank just because your parents bank there and you’ve had an account there since you were eight.

If dealing with big banks isn’t your thing, check with local banks or credit unions such as ATB in Alberta, as they often offer a similar deal.

Consider the total package

You need more than just a line of credit. You need a bank account and a credit card too. Most banks have a medical student package that includes a fee-free bank account and credit card. Generally speaking, the bank account and credit card offers are the most significant differentiating factors between the various banks.

Do you want a top-tier credit card, like the TD Aeroplan Infinite, or the RBC Avion Infinite, which come with loads of airline miles and free travel insurance? Ask for it before applying for the line of credit. As a student carrying loads of debt without a steady income, you’re not usually seen as the ideal candidate for the best rewards cards, but it’s an important perk you can negotiate. You can also get the annual fee waived, for at least one year.

TD Aeroplan card
The TD Aeroplan Infinite comes with a 25,000 Aeroplan mile bonus and free travel insurance

As for the bank account, you should expect to get a bank account with zero monthly fees and plenty of free transactions. You should also negotiate a free order of checks (aim for at least 200), as those can come in handy. Some banks offer a certain number of free email money transfers every month, which are really useful for splitting bills or the rent with friends and roommates.

Never forget the golden rule when dealing with banks, that almost any fee can be waived, and exceptions can be made for almost any rule. If the person you’re speaking to says they can’t do it, ask to speak to their supervisor/manager. Someone high enough in the chain of command has the authority to do just about anything.

Not all lines of credit are made equal

There are a few key differences in the actual line of credit between the different banks.

The amount of money you can borrow in one year

Every bank except RBC limits how much you can borrow in a given year. So despite having a total $275,000 credit line, you might only be able to use $50,000 in your first year. For most people, that’s more than enough, but if you want flexibility in case of an emergency, it might be a consideration. Generally, there’s some flexibility on these annual limits when push comes to shove, but that’s just another hurdle to jump.

How interest is paid every month

With Scotiabank and National Bank, your monthly interest is paid automatically by withdrawing even more money from your line of credit to cover it. This is known as “capitalizing” the interest. Since most medical students don’t have a regular source of income and need to borrow money to pay the interest anyways, it can be a very convenient feature.

With TD and RBC, your monthly interest payment must come out of your bank account and can’t be automatically taken from your line of credit. In practical terms, this means you need to make sure you have enough money in your bank account to cover the interest payment on the day it’s due. If you don’t, you’ll be hit with a insufficient funds charge, usually around $35, in addition to penalties for making a late payment. Banks will often forgive you the first time this happens, but it’s one more thing to add to your calendar.

Medical Student Line of Credit Cheat Sheet

I’ve put together a cheat sheet of the various banks’ packages, based on information gleaned from talking to banks, consulting their websites and of course the premed101 forums (a good resource to consult for the latest info). Any of this information is subject to change or be out of date, but it’s a place to start. 🙂

If all else fails, just remember to negotiate and don’t consent to a credit check until you’re happy with what’s being offered. You can always walk away and think about it. 🙂

 Bank of Montreal (BMO)CIBCMD Management (National Bank)Royal Bank (RBC)ScotiabankTD
Maximum Credit Line$250K, max $75K/year$275K$275K$275K$275K (max $50K/year for school plus $75K for residency)$250K
Maximum Credit Line in First Year$75K$70K$50K$85K
Interest RatePrime ratePrime ratePrime ratePrime ratePrime ratePrime rate
Grace Period after Graduation from Residency - Interest-only payments during this time12 months12 months12 months12 months12 months12 months
Credit cardNo special dealStudent credit card with $1K limitCMA Platinum Mastercard, with annual fee waived for 2 years$5K Visa Avion Infinite card with annual fee waived first yearUp to 2 cards, total $10K limit with fees waived (Visa Infinite Momentum and Amex Gold)No special deal
Interest automatically paid from Line of Credit (vs from bank account)unknownNoYesNoYesNo
NotesLimits can be flexible
Chequing accountNo monthly fee
30 transactions/mo
2 free email transfers/mo
No monthly fee
Unlimited transactions
No monthly fee
Unlimited transactions
200 free cheques/yr
No monthly fee
Unlimited transactions
12 bank drafts/yr
5 free email transfers/mo
No monthly fee
Unlimited transactions
$5K overdraft protection
No monthly fee
25 transactions/mo

Which Microsoft Surface Tablet Model Should a Medical Student Buy?

The Microsoft Surface tablet is extremely popular among medical students, and for good reason. These days, the only practical way of keeping up with hundreds of lecture slides a day is to take notes digitally. If you’re printing everything, your bookshelf will soon weigh as much as a small elephant.

Some people take notes on their laptops, but it’s extremely hard to draw diagrams and highlight key points on a laptop. A more practical option is a tablet – the most models are the iPad and the Microsoft Surface.

Surface Pro 3 vs iPad Air

Let’s settle the iPad vs Surface debate

iPads are a decent solution, especially when you get a pressure sensitive pen and an external keyboard. But I’d say that the Microsoft Surface tablet is even more ideal, for two reasons.

First, the Surface is actually designed for pen input, whereas the iPad is designed primarily for finger touch. What this means is that when you’re writing with a pen on the iPad (which you have to buy separately), you can’t rest your wrist on the screen, otherwise the screen will register any wrist/palm contact as a touch. Writing on an iPad is more like painting, and I notice my classmates awkwardly trying to write while keeping palms and fingers away from the screen. The Surface, by contrast, registers pen input and finger touch separately – if your pen is within a couple inches of the screen, it senses that and ignores any input from your palm, so your screen doesn’t scroll away on you.

Microsoft Surface Writing
Is that wrist touching the screen? Can’t do that on an iPad!

Second, the Surface is a full-fledged computer. It can do everything any other computer can, such as multitasking easily between several windows and running desktop software like Word, Excel and PowerPoint.

Ok, hopefully you’re now convinced that the Surface is the way to go. Which model of Surface should you get?

Personally I think Microsoft makes things way more confusing than they should be. There are currently two models of Surface – the Surface 3, and the Surface Pro 3.

I’ve summarized the differences in the two models below. The Surface Pro 3 has a bigger screen (with 26.5% more pixels), and has more memory and processing power.

Keep in mind that Microsoft offers students a 10% discount, whether online or in their stores.

 Surface 3Surface Pro 3
Screen Size10.8"
1920 x 1280 Pixels
2160 x 1440 pixels
Weight1.37 lbs1.76 lbs
Kickstand Adjustability3 positionsInfinite number of positions
ProcessorIntel Atom CPU 1.6Ghz (reduced power laptop processor)Intel i3, i5 or i7 (full-powered laptop processor)
RAM2GB or 4GB4GB or 8GB
Hard Drive64GB or 128GB64GB, 128GB, 256GB or 512GB
Pen$45 extraIncluded
Keyboard$144 extra$144 extra
Pricing (with student discount)$575 - 2GB/64GB
$692 - 4GB/128GB
$854 - i3/4GB/64GB
$1,079 - i5/4GB/128GB
$1,412 - i5/8GB/256GB
$1,664 - i7/8GB/256GB
$2,114 - i7/8GB/512GB
Price (including pen and keyboard)$764 - 2GB/64GB
$881 - 4GB/128GB
$998 - i3/4GB/64GB
$1,223 - i5/4GB/128GB
$1,556 - i5/8GB/256GB
$1,808 - i7/8GB/256GB
$2,258 - i7/8GB/512GB

Personally, I’d go with the Surface Pro 3. Once you factor in having to buy the pen separately with the Surface 3, you’re only paying a ~$200 premium to have a much bigger screen and a more powerful processor.

Which Surface Pro 3 model should you get?

If you’re buying a Surface Pro 3 mainly as a note-taking device, and don’t plan on using it as your primary computer, then get the cheapest model – i3, 4GB RAM and 64GB hard drive for $998 with the keyboard. That’s plenty enough power to run OneNote, surf the web and watch podcasts.

If you’re looking for a little more power, the i5, 4GB RAM and 128GB hard drive model isn’t a bad deal for $1,223, or a $225 premium over the i3 model.

If this is going to be your main machine, then splurge for the i5, 8GB, 256GB model. $1,808 is a lot to spend on a computer in this day and age, but it’s your combined computer and note-taking device.

Further upgrades – to the i7 processor and 512GB hard drive – are a terrible value in my opinion. Most users won’t notice a difference between an i5 and i7 processor. And it costs $450 to upgrade from the i7 256GB to the 512GB model. Yet a 512GB solid state drive costs only $200 on Amazon.

Unfortunately, it’s not easy to upgrade the Surface Pro 3 yourself, as it’s not designed to be opened and the RAM and hard drive are soldiered onto the motherboard.

[EDIT 8/26/2015] As reader David S points out in the comments below, you can add a microSD card to a slot on the side of the Surface Pro 3 to expand the storage space. A 64GB card costs about $35 on Here’s a picture of what that looks like:

Surface Pro 3 MicroSD slot
Surface Pro 3 MicroSD slot

Luckily, there is a way to get your hands on a Surface Pro 3 for a lot less money…

How to get a Surface Pro 3 for cheap

Conventional wisdom says that used cars are a much better deal than new ones. The same applies to the Surface Pro 3.

I bought a used i5, 4GB, 128GB model on Kijiji for $650 – about the half the cost of a new one, once you factor in taxes and recycling fees.

If you’re going to buy a used one, get one that’s still under warranty. The warranty is transferable, and Microsoft’s service is amazing.

At first I had some issues with the touch sensitivity of my screen. I requested an “advanced exchange” online, after which Microsoft overnighted a brand new machine to me, and I simply mailed my old one back with a prepaid label they supplied.

When my pen got a little flaky, Microsoft overnighted a new one to me – and didn’t even ask for the old one back.

I can’t emphasize this enough – if you buy a used machine, make sure it’s still under warranty (less than 1 year old), because Microsoft will promptly fix any problems you have.

The Surface Pro 3 is an amazing machine. It’s slick, light and its touch-sensitive screen is badass. It makes sitting in a lecture hall for six hours a day a smidgeon more bearable. Just don’t break the bank while buying one. There are a few years yet before you’re making a bazillion dollars a year. 😉