Note that your financial circumstances may affect how much you receive from governments. For example, having assets in a tax-free savings account (TFSA) ount you can get. If you have a spouse or common-law partner, his or her assets may also affect how much you can receive.

Establish good credit

Demonstrating that you’re a reliable borrower will help to maintain and even boost your credit score. And that will affect your ability to borrow going forward (and the interest rates you’ll receive), say, when you want to finance payday loans Lancaster online your first home.

Credit scores range from 300 to 900. The higher your score, the better. Obviously, paying your bills on time (including loan repayments) will increase your credit score, while failing to pay on time (or at all) will lower your score.

Whether you like it or not, credit reporting agencies (TransUnion and Equifax in Canada) are keeping track of your credit history and assessing your viability as a borrower. Your history is updated every time you apply for a loan or line of credit, so the information you provide on the application is used to update the score. One item that will keep your score high is the length of time you’ve had debt or a credit card (longer is better).

Check your own credit report and score. TransUnion and Equifax will send you a free copy of your credit report by mail – but it won’t include your credit score. For a fee, these two credit bureaus will give you your credit report and credit score online. You can also access your credit score for free through your financial institution, if available.

A credit score of 700 and above should qualify you for the best interest rates, while a score below 650 may limit your ability to open new lines of credit. There is no hit to your credit when you check your own credit report, so don’t hesitate to request this baseline information.

Secure a line of credit

After applying for scholarships, bursaries, government grants and government student loans, you’ll probably find that you’re still short on funding for medical school. If so, you’ll likely want to apply for a student line of credit.

The major benefits of a student line of credit are flexibility and lower interest. This option is different from a traditional loan because you can use money as you need it, and you pay interest only on the funds you withdraw. This is an important benefit of a line of credit that can save you money compared with taking out a traditional loan. A student line of credit also provides more flexible repayment options, generally requiring lower monthly payments than traditional government loans require.

The snag with all this flexibility is that rates can change. The interest rate for a student line of credit is usually based on the prime rate. For example, your interest rate might be prime rate minus 0.15%, which would give you a 2.30% interest rate when prime is 2.45%. As the prime rate changes, the interest rate you pay will change, so it’s important to keep a close eye on interest rates overall – and to have a sense of where those rates might be headed.

The other downside to student lines of credit is that, unlike for government loans, interest accrues immediately on the amount you borrow. Some student lines of credit allow for capitalized interest, which means that you may sometimes be allowed to skip a payment and have the interest owing added to the principal amount (the original amount you borrowed). This can provide some financial relief, but remember that it’s increasing the debt that you will need to repay later.