Lines of Credit

We have been offered a $10,000 line of credit with the Bank of Montreal because of our good history with our auto loan and credit card that we have with them.  They are offering us a really reasonable rate (less than 4%), no credit check and it would be unsecured.

We're very interested because of the work were planning to do on the back yard this year, we were planning on having to use the credit card a bit as we saved up money (we won't have the $10,000 for the yard technically until December, 2013 so were planning on using the CC and then paying it off as we saved the $$).

A line of credit with such a low interest rate would seriously help with the interest for next year's back yard project.

....what are your thoughts?


  1. Hmmm. Sure sounds more sensible than using a CC. Is the rate floating? I would find out how the payments work. Often, they are interest only, and people somehow never pay them off. If you treated it as an actual loan and set up payments when you were done with the work, so it didn't drag out, it could work. Especially if you didn't use it to increase your budget beyond what you plan.

  2. Is there a rush for the project? I would suggest saving as much as you can, & using the line of credit for an unexpected emergency (furnace breaking, needing to repair your roof, etc), in the event (hopefully it won't happen) you need it.

  3. When I went into my BMO branch this week to get my jar $, out of the blue the first thing the teller said was "I see you don't have a LOC with us. Are you interested in one?" I had to tell her I already had one with another bank.

    4% is a good rate.

  4. I double checked, the rate is prime + 2.49 % so right now it's 5.49 - but still betwe then the cc and we don't pay unless we actually use it.

    Minimum payments are 50 or 2% of monthly balance whichever is greater.

    I think we would make payments like our cc - whenever there is a balance we pay it off a fast as possible.



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