October 21, 2013 | In: Financial

How to Move Your Line of Credit to Another Bank

When trying to move their line of credit from one bank to another, some people follow this process:

  • They call the bank that has their current line of credit.
  • They ask them to cancel it.
  • They go to the other bank and tell them that they just canceled their line of credit with another bank and they need to re-open it with them (them means the other bank).
  • They become surprised when the bank tells them we need to review your credit score, check your assets, etc…

The above process, as you can see from the last step, is wrong. In fact, if you do the above, you’re not really moving your line of credit from one bank to another, you are cancelling it with the first bank and re-opening it with another.

There is a much better and easier process:

  • Go to the bank that you want to move your line of credit to.
  • Ask them to move your line of credit from Bank X to them.
  • They will make you sign on a few papers, and they will do it themselves.

You might be surprised, but a bank can access your account at another bank! They can even do cancellations, etc… That’s how open the US/Canadian banking system is (in my opinion, this is a bit scary, but that’s another issue).

Now, before doing the move, make sure of the following:

  • The interest rate is less or equal to the previous interest rate you are currently paying.
  • The minimum payment is also less or equal to that you are currently paying.
  • There are no associated fees for the transition, and there are no monthly fees on the line of credit with the new bank.

Banks are always happy when they get someone’s line of credit, so, usually, you can negotiate a sweet deal. Make sure that you tell the bank that you don’t want to see those interest rates going up for at least a year.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

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