During RRSP season (usually January and February), Vancouver RRSP Loans can be arranged at the bank counter. Most financial institutions quickly approve RRSP loans and offer great rates and very flexible payment plans. Some banks even approve these loans over the phone. Brokers, planners and fund companies are also getting into he loan business, but the interest charged is usually higher. |
Many banks will allow you to delay payment for up to 90 days. this allows you to use your refund to repay the loan. In many cases, this will eliminate the need for our of pocket payments. Of course, you will still be charged interest for those 90 days, so if you can start payments immediately, you will reduce the amount of interest charges and stretch the payments over 12 months instead of nine.
Do not take out an RRSP loan for longer than a year. Next year, you will require another loan, and then another the year after that and eventually, you may fall behind. If you cannot afford a one-year loan, you will need to consider contributing less or adjusting your income or spending habits.
If you are already in debt, then you might as well make the most of it. If you have $1000 set aside for an RRSP but you're carrying a credit card balance, you are likely better off paying down your credit card and borrowing for the RRSP. The RRSP loan will charge something like 9% while the credit card will likely cost between 20-28%.
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