How is line of credit interest calculated
Your credit rating
Line of Credit
Where can I apply for credit at TD Canada Trust?
There are three ways to apply for credit at TD Canada Trust --
- In person at your nearest TD Canada Trust branch On the phone by calling 1-877-247-2265 Online 24 hours a day, seven days a week!
Due to Quebec legislation, applications from Quebec residents cannot be accepted online or over the phone. Please visit any branch to apply.
What information will I need to provide when I apply for credit?
In order to process your application quickly, you may be asked to provide --
- The purpose for your application, such as home renovations or a new car purchase Personal details such as your name, address, birth date and Social Insurance Number (SIN optional) Employment and income details Details about a co-signor, if applicable Your assets, such as a car, bank accounts, investments, house etc. Your liabilities, including any loans, credit card balances, mortgages etc. and the total of your monthly payments
Also, you will need to provide the following additional documents if you are using your home as security --
- Property tax confirmation A copy of your fire insurance policy A property appraisal (completed by TD Canada Trust) Your title registration
What can I do if my application for credit is turned down?
If your request for credit has been turned down, you may still qualify for credit. To improve your chances of qualifying, you can --
- Provide collateral security and/or Have a co-signor guarantee your personal loan or line of credit
What is a co-signor? Who can co-sign a line of credit or personal loan?
A co-signor is a person who becomes equally responsible for repaying a credit balance with you. Anyone of the age of majority in their province of residence can co-sign with you.
What is collateral security and why would I use it?
Collateral is something you own that you can pledge as security for a loan or a line of credit. Examples of collateral would be the equity in your home, a new vehicle, stocks/bonds, or GICs. Since collateral provides extra security for your credit request, it's a great way to lower your interest rate and save on the amount of interest you pay.
I've heard people talk about the importance of having a good credit rating. How does that affect me?
A good credit rating means that you have repaid past credit balances and continue to pay current credit balances in a timely manner. You should be able to maintain your good credit rating by making your credit balance payments on time and in full.
Where can I obtain a copy of my credit bureau report?
You can obtain a copy of your credit history by contacting Equifax Canada directly at 1-800-465-7166 or www.equifax.ca
What is the difference between a line of credit and a personal loan?
A line of credit is a source of readily available credit that is there for you to use whenever you want, for whatever you want. There is no need to reapply each time you wish to access the funds. As you pay off any credit that you have used, it becomes available again. A personal loan is a source of credit for a fixed amount that allows you to make fixed monthly payments over a predetermined period of time. You can choose from a wide range of terms to make the payments fit you budget -- the longer the term, the lower your monthly payment. A loan gives you the peace of mind that comes with knowing exactly how much you will pay each month.
If I sell my home, can I take this Home Equity line of credit with me, or do I have to reapply?
What is a TD Home Equity FlexLine?
A TD Home Equity FlexLine is a line of credit that is fully secured by the equity in your home with a variable interest rate that also gives you the option to convert all or part of your outstanding balance to a fixed interest rate through our Fixed Rate Advantage
Option (FRAO). It provides immediate access to your available credit within your credit limit.
Can I purchase a home with a TD Home Equity FlexLine?
Yes. A TD Home Equity FlexLine is available both for a home purchase and as a source of credit for other purposes. For a purchase, a minimum 20% down payment is required.
How are existing TD Home Equity Line of Credit customers impacted by FlexLine?
How do I access a TD Canada Trust Line of Credit?
You can access your available credit in the following ways --
- Write a Line of Credit cheque Make cash withdrawals at TD Canada Trust branches Add your Line of Credit to your TD Canada Trust Access Card and use it at merchants and automated teller machines (ATMs) worldwide Transfer funds from your Line of Credit using EasyLine telephone banking or EasyWeb Internet banking
How does the renewal process work within the TD Home Equity FlexLine?
If you have a Fixed Rate Advantage Option within your TD Home Equity FlexLine, at maturity you will have the option to renew or pay the remaining amount.
How is interest calculated on my line of credit?
For the revolving portion of your line of credit, interest is calculated on a daily basis on the outstanding principal balance and payable on a monthly basis.
Should you choose to lock in all or a portion of your balance with our Fixed Rate Advantage Option, interest a secured line of credit is calculated on a semi-annual compounding basis on the outstanding balance of the fixed portion daily from the date of the last payment, and is collected in the regular payment. Interest on the locked-in portion of an unsecured line of credit is calculated on a daily basis on the outstanding principal balance and payable on a monthly basis.
What happens if interest rates rise? Can I lock in the rate on my line of credit?
If interest rates start to rise, it's easy to use the Fixed Rate Advantage Option at any time to lock in all or a portion (subject to minimums) of your balance at a fixed interest rate with fixed payments.
Depending on which line of credit you qualify for, you have the option of converting a portion of your balance to one- to five-year closed mortgage rates (for TD Home Equity FlexLines) or to competitive loan interest rates (for unsecured Lines of Credit).
What is the monthly minimum payment I am required to make?
You can decide how much you want to pay each month toward your outstanding balance. Choose as little as 3% or $50, whichever is greater, or any amount up to the entire balance. When secured with the equity in your home, your payment can be interest only.
Is there a limit on how much I can prepay on my line of credit?
If you have a TD Home Equity FlexLine Fixed Rate Advantage Option, you may prepay up to 15% of the original principal amount each calendar year without charge, at any time. Any unused portion of the 15% cannot be carried over to the following year. Principal repayments in full or in part that exceed the 15% allowance are subject to an additional payment of the greater of three months' interest or an Interest Rate Differential (IRD) amount. You can also increase the payment amount by up to 100% over the term.
What are the payment options?
Payments are required on a monthly basis. However, you can set up weekly, rapid weekly, biweekly, rapid biweekly and semi-monthly payments on the fixed-rate portion of your line of credit at any time during the term.
What are the costs associated with getting a line of credit?
There are no application or annual fees associated with any of our Lines of Credit. However, for TD Home Equity FlexLine, there may be fees to register the property as security and/or appraisal fees, which are the responsibility of the customer. These fees differ in each province.
Is life insurance available on a Personal Loan or line of credit?Source: www.tdcanadatrust.com