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 RRSP loans, including a Royal Credit Line® or a Personal Loan for RRSP contributions. Both are available with flexible payment schedule options to make your RRSP loan as worry-free as possible.
Benefits of RRSP Loans
| 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 RRSP Credit Line or RRSP
Personal Loan Interest Rate is: |
4.75%1 |
| Your loan term is: |
12 months |
| Your monthly payments would be: |
$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.
Which RBC Royal Bank RRSP loan option is right for you?
| Royal Credit Line |
Personal Loan |
| Borrow $1,000 to $15,500*. |
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. |
Speak to an investment representative to discuss your personal situation.
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 see our product brochures or call us at 1-800-769-2511.
* Loan amounts and loan limits are subject to standard loan criteria.
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