It Can Make Sense to Borrow for Your RRSP
Maximizing your annual RRSP contribution is one of the best ways to build a secure retirement. Sometimes, it can be tough to come up with the money. Plus, if you missed making your full contribution in a previous year, you could have a lot of catching up to do.
That is why RBC Royal Bank® offers a Royal Credit Line® or a Personal Loan for RRSP contributions. Both available with flexible payment schedule options to make your loan as worry-free as possible.
Very Attractive Rates and Terms
When you use your loan to invest in your RBC Royal Bank RRSP, the interest rate on the loan is set at our Prime Rate.
Your first repayment can be deferred for 120 days, so you can use your tax rebate to repay all or some of your loan.
Benefits of borrowing for RRSP contribution:
| Compound Interest and Tax Deferral can Outweigh the Cost of Borrowing |
| You need to borrow: |
$2,500.00 |
| Your marginal tax rate is: |
40% |
| Your Royal Credit Line or Personal Loan Interest Rate is: |
4.75%1 |
| Your loan term is: |
12 months |
| Your monthly payments would be: (including LoanProtector® premium) |
$220.00 |
| You Would Save: |
| Tax Rebate/Deduction: |
$1,000.00 |
| Less total interest over term: |
$140.00 |
| Your savings: |
$860.00 |
That's not all. The money you borrow to invest will grow together with the rest of your RRSP investments - sheltered from tax as long as it's in your plan.
Select the right borrowing options for your RRSP contribution
| Royal Credit Line |
Personal Loan |
| Borrow $1,000 up to the annual contribution limit. |
Borrow $5,000 to $50,000*. |
| Use to top up a payment or to make a full year's contribution. |
A higher credit limit and fixed payment schedule make a personal loan ideal for catching-up on missed contribution room from previous years. |
| Borrow again and again - up to your approved credit limit - without having to reapply. |
Terms to suit your needs, amortized over up to 10 years. |
Additional Benefits
With a Royal Credit Line or a Personal loan, you can arrange a fixed schedule of payments or a pre-authorized payment schedule to ensure that you pay down your loan easily, conveniently and without hassle.
Of course, you can also pay more than your regular installment at any time, without penalty.
Plus, you enjoy all the other benefits of a RBC Royal Credit Line or Royal Personal Loan.
Protect Your Dreams
Whether your dream is a new car, vacation or home renovation, it's important to protect it from the unexpected. LoanProtector® Life and Disability Insurance offers just the solution. Designed to provide financial back up during difficult times, it provides low-cost, valuable protection for you and your family.
1. Interest rates used for examples are for illustration purposes only. Interest rates are subject to change at any time without notice.
* Royal Credit Line and Personal Loan accounts are available to clients who meet RBC Royal Bank standard credit criteria.
This is a general description of Royal Credit Line and Personal Loan; for more information and product details, please contact a credit specialist.
Loan amounts and loan limits are subject to standard loan criteria.
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