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I was thinking of setting up a Personal Line of Credit through my bank.
I've been asked a couple of times by their reps every time I call them for various inquiries if i'm interested in doing so at that time... however I'm always in a rush and end up telling them I'll call them back.

So I decided i should finally scratch this task off of my list.

I don't have any use for accessing cash for a PLC at the moment, however would like to have it on tap as a 'just in case' resource for cash.

Whats an average or standard amount one should request?
I dont want to go overboard so that they'll ask a million different questions and ask for verification, but just a good amount that would be relatively hassle free to setup. Considering any of the major banks; BMO, CIBC, RBC, TD, Scotia..

Does something line 20k sound like a reasonable reserve? I'm trying to eyeball something that would keep me afloat and make all payments in the event of job loss for a couple months.
 

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In response to your question, $20K is a reasonable amount for this. They may make adjustments to this amount (lower) if you buy a house or get divorced.

But I am concerned with your idea to rely on this to keep you "...afloat and make all payments in the event of job loss for a couple months." Do you not have cash saved for this possibility?
 

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I think if you open a line of credit it may tempt you to use is for non-emergencies, is this correct? It's nothing to be ashamed of, many of us here have at times... my husband and I used to. But if you want to get ahead you really should be opening a savings account and have emergency cash stashed away for the "what if's".... otherwise you will be digging a deep hole that may be very difficult to get out of.

The only reason we have a LOC is because:

a) we use it responsibly (ie only going under zero about twice a year, often for only 100 $ or less - mainly because we're too damn cheap to pay interest)

b) it gives us free cheques and unlimited transactions using the LOC as a chequing account

Although we're saving up an additional $5K to get a TD Select account so we can get the same free cheques and a few other bonuses... then we'll get rid of the LOC. It really does pay to save.
 

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I presume this would not be real estate secured? If RE secured always go for the largest amount secured by your home at the time (to prevent further expense to increase in future). If not RE Secured-would probably go $25 or $50K anyway to justify the hassle. How many months expenses would this be? 6 months should be minimum request. Make sure you have the discipline not to draw on it except in real emergency.
 

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... then we'll get rid of the LOC. It really does pay to save.
Yes, it pays to save and I consider myself good at it. But getting rid of a LOC is a VERY bad idea for any responsible money manager (as you seem to be).

The existence of that fund in your name is a definite added layer of safety as you go through life. I used it ONCE and it saved my butt, big time. I needed every penny due to adversity. Additionally, I had 12 months of cash saved up and had used it all up earlier on. It was a very difficult time in my life and the savings were essential, but the LOC gave me an added layer of protection. Once I got back on my feet I paid it down pronto and it has been at a zero balance ever since. It costs me nothing to keep it in the background with no balance.

I've gone to the 3-tier savings format but I am still keeping the LOC. You just never know.
 

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I don't have any use for accessing cash for a PLC at the moment, however would like to have it on tap as a 'just in case' resource for cash.
.
It's been said many times, many ways, but many prefer to sit on some cash for the "just in case" scenarios. Some argue that it's a squandering of potential growth to keep cash under the mattress, but I feel better this way.

I did get a $15k LOC a couple years ago to cover the REALLY BIG "just in case" event. When bad things happen, why compound it even more by digging under a pile of debt? Better to self-impose some limits on how bad you can make the financial situation.
 
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Discussion Starter #7
Thanks for all of the input everyone.
I would prefer to keep it non-RE secured... as i could imagine all off the hassle that would accompany a RE secured line.

I think i'll request about 25k, and apply online.

But I am concerned with your idea to rely on this to keep you "...afloat and make all payments in the event of job loss for a couple months." Do you not have cash saved for this possibility?
Well if this was to happen, yes I'd survive and get by... however it's more of a due-diligence thing, and I figured since it's free to setup it wouldnt hurt to just have this added layer.
 
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