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Email this6:13 pm
June 13, 2016
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Hello,
I am a medical student, and have applied to live of credit at 3 different backs and all 3 approved it (the thing is none of the banks saw my LOC with the other banks, so assumed its my first LOC and approved it).
I now have access to all three LOCs (250,000 each). There was no where in the contract mentioning that I am limited to only one LOC.
My question is: is what I did illegal? could it cause problems in the future?
Do banks perform annual credit checks without my consent to find out about my debts?
Who can I ask to make sure nothing could happen?
Thanks a lot!
P.S: im going to invest the money since the return is more than the interest charged by the bank!
8:58 pm
October 21, 2013
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Your question is fraught with potential complications.
I am not a lawyer and have no legal training, and you should not trust anyone you don't know who may claim to be one. The person you should ask for a definitive answer is a lawyer.
So I assume you are looking for a lay person's opinion.
I believe that, yes, they will check your credit rating periodically to see if you are still a good risk. They won't need your permission because you almost certainly would have already given it to them when you applied for the LOC.
It would be considered fraud if you lied on your application.
They can withdraw or reduce the credit, which they may very well do when they realize the size of your liabilities.
Lines of credit count as liabilities on your credit even when you're not actively using them.
What will you do if they call the loan when they discover you're overextended or if they think you misled them? You'd better check the fine print to see what the provisions are. I expect they can call it whenever they don't like you as a customer any more. If you're locked into GiCs, you could be up sh*ts creek.
I would close 2 of the LOCs immediately- the ones whose approvals came in 2nd and 3rd time-wise. You have to formally close them. It is not good enough just to pay it back and owe nothing as it still counts as a liability on your credit rating until either you or they close it.
If you think they may knowingly lend you the same amount at more than one bank, I suggest you go to bank #2 next year and apply, and see what happens. If that works, try bank #3 the following year - if rates are still suitable. One a year is plenty.
By the way, this debt will affect your ability to get credit cards or get more credit on your existing ones.
And we haven't even discussed what you're investing it in or any implications for income tax. If you can afford medical school without actually using this money, you may not be in the tax-free income zone.
At first, I thought you were making up this story, but I see that CIBC and TD, for example, really does offer medical students up to 275K in LOC with unspecified reduced interest rate. I can imagine all 3 of them want your business, as they're hoping to develop a "relationship" with you and have you and your business as a client for life. It's a promo.
Don't squander your future on these kinds of shenanigans. It makes me wonder about your intended billing practices.
6:20 am
December 23, 2011
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Loccol said
Hello,
I am a medical student, and have applied to live of credit at 3 different backs and all 3 approved it (the thing is none of the banks saw my LOC with the other banks, so assumed its my first LOC and approved it).I now have access to all three LOCs (250,000 each). There was no where in the contract mentioning that I am limited to only one LOC.
My question is: is what I did illegal? could it cause problems in the future?
Do banks perform annual credit checks without my consent to find out about my debts?Who can I ask to make sure nothing could happen?
Thanks a lot!
P.S: im going to invest the money since the return is more than the interest charged by the bank!
For each bank account you opened and/or LOC....where you not asked for your approval for a credit check during the opening process? You should have!!
So I say, you have done nothing illegal. Unless you were deceptive during the application process. Or possibly all done on same day so the credit bureau did not register?? And you are a student likely with debt for education upon graduation? Something does not correlate here!
3 times $250,000 is not only unbelievable it is reckless!!
And to leverage your funds is also reckless......I hope you know what you are doing.
9:16 am
June 13, 2016
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kanaka said
Loccol said
Hello,
I am a medical student, and have applied to live of credit at 3 different backs and all 3 approved it (the thing is none of the banks saw my LOC with the other banks, so assumed its my first LOC and approved it).I now have access to all three LOCs (250,000 each). There was no where in the contract mentioning that I am limited to only one LOC.
My question is: is what I did illegal? could it cause problems in the future?
Do banks perform annual credit checks without my consent to find out about my debts?Who can I ask to make sure nothing could happen?
Thanks a lot!
P.S: im going to invest the money since the return is more than the interest charged by the bank!For each bank account you opened and/or LOC....where you not asked for your approval for a credit check during the opening process? You should have!!
So I say, you have done nothing illegal. Unless you were deceptive during the application process. Or possibly all done on same day so the credit bureau did not register?? And you are a student likely with debt for education upon graduation? Something does not correlate here!
3 times $250,000 is not only unbelievable it is reckless!!
And to leverage your funds is also reckless......I hope you know what you are doing.
Thank you guys for your replies!
I applied to all three in two/three days, and thats why the inquiries didnt show up on their system. They never asked me about whether I had applied to anywhere else, and so I dont think I was deceptive ... thats why I dont believe I did a fraud! I havent stolen anything, havent provided false documents or anything...
I manage my money very well, and I will definitely make sure I am able to pay the interests regularly in a timely manner.
4:51 pm
April 6, 2013
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Loccol said
Thank you guys for your replies!
I applied to all three in two/three days, and thats why the inquiries didnt show up on their system. They never asked me about whether I had applied to anywhere else, and so I dont think I was deceptive ... thats why I dont believe I did a fraud! I havent stolen anything, havent provided false documents or anything...
I manage my money very well, and I will definitely make sure I am able to pay the interests regularly in a timely manner.
I would go see a lawyer with the line of credit agreements and get some advice. If it is okay with the lawyer, I would inform the three banks and see how they feel about the resulting situation.
Each of the three banks is obviously comfortable with you borrowing $250,000. Give each of them an opportunity to reduce their individual limit to $250,000 / 3 ≈ $83,000.
There is a chance that the banks do know and are okay with $750,000 of total borrowing. I don't know what your credit history looks like.
Banks do review borrower credit reports periodically. So, they will eventually find out. I think it is better for them to find out from you now, before any money has been advanced, than to be surprised later when they review your updated credit report. They could conclude later that you were gaming the system.
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