How I got $5k for free

In March, I got an offer from Tangerine for an RRSP loan. I was in the process of mentally preparing my taxes since it was that time of the year. I had almost 90k of income for 2018 and had already contributed about $5k to my RRSP. Although, I had the chance to add another $15k via an RRSP loan.

Now, let me preface this by saying this isn’t right for everyone. I had to pay back the loan within 12 months at 1.5% interest, which meant my monthly payments would be $1,268.75. That’s not pocket money for most. Luckily, I had a plan to pay off the balance of the loan before the first month’s payment. Here’s how I did it.

Before acquiring this loan, I was set to get ~$2.5k back as a tax refund. Here’s a breakdown of my calculation using Simple Tax’s calculator.

Adding in the $15k RRSP loan brings my total contributions to $20k and my refund to ~$7.1k.

My refund has a net gain of $4.6k. So using the $7.1k from my tax refund and my own savings, I paid off the RRSP loan. At the end of the day, I was about $4.5k richer. My goal for next year is to max my RRSP without using an RRSP loan.

Have you ever used an RRSP loan? Why or why not?

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