It Can Make Sense to Borrow for Your RRSPMaximizing 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. Making regular ongoing automatic contributions to your RRSP is a great way to invest for your future. But if you missed making your full contribution in a previous year, you could have some catching up to do, and may want to consider borrowing to make a lump sum contribution to your RRSP in the current tax year. This makes the most sense if your tax bracket is higher than usual this year, or if you expect soon to fall to a lower tax bracket. Use our RRSP Loan calculator to see the impact that borrowing to make your RRSP contribution for this year could have on your investment portfolio by the time you retire. Very Attractive Rates and TermsBorrow up to $50,000*, and choose a repayment schedule that suits your needs of up to 10 years. When you use your loan to invest in your RBC Royal Bank RRSP, the interest rate on the loan is set as low as our Prime Rate. Your first repayment can be deferred for 90 days, so you can use your tax rebate to repay all or some of your loan. Benefits of borrowing for an 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 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: | $1,000.00 | | Less total interest over term: | $140.00 | | Your savings:2 | $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. Additional BenefitsWith 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 an RBC Personal Loan. Protect Your DreamsWhether 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. 2. Your savings would be offset by future taxes on the withdrawal of this $2,500. Also the income on the $2,500 would eventually be taxable, but the $140 of interest expense is not tax-deductible. * Personal Loan accounts are available to clients who meet RBC Royal Bank standard credit criteria. This is a general description of Personal Loan; for more information and product details, please contact a credit specialist. Loan amounts and loan limits are subject to standard loan criteria. | 
