I interviewed Sandy Maric; he is a mutual funds representative at RBC Royal Bank. Among the things that caught my attention through the interview are how the bank system helps him to approve a loan product to a costumer. The straightforward requirements RBC handles in order to borrow money to the people. During the interview, Sandy was kind and gentle, we had a nice sort of conversation instead of a strict session of questions and answers. We got along in a great way and the conversation allowed me to get to know about which is the process the bank had to approve a loan product and other important issues involved the credit consumer lending practices.
I started asking him what I should do to get a loan product, “You need to get a no monthly fee Student Banking account, in order to qualify for a pre-approval credit card does not require a credit history with a limit up to $ 2,000”. He also explained that RBC has special programs do not need credit history to help other newcomers to Canada. These programs will give them a credit card that they can use to build a good credit history. Any other credit/loan application require income application, that give client employee status or if the client is self-employee. The self-employee costumer needs to bring all the tax information.
Credit cards are easier to approve than mortgages that have more restrict criteria on TDSR and extra criteria that is the GDSR. Speaking about TDSR Sandy mention that a client can qualify for certain loan amount with an average between 30%-44% to the TDSR. If a client has a TDSR between 40%-44%, but also has a good credit history or high income the bank system might approve a loan amount less than the client is requiring. Even though the client is not happy with that, he has to go to the ratification center. The ratification center will more in depth, it will ask for more detail documents.
This process can apply for credit card or line of credit. The difference is in the amount of money. A line of credit is for more than $10,000 and it has a better rate of interest, so usually is for a better clientele based on relationship that the costumer has with the bank. The client with good relationship or high income could reach an interest rate of prime or for the average clientele is prime plus 3%-5%. In order to maintain himself update about important changes, Sandy checks the bank system every morning to see if updates in interest rates, new products, requirements. He also has internal letters that tell him what is going on in the world in mortgages, loans, finance, etc.