Demystify the RRSP loan.

Specialists commonly suggest taking out a loan to make an RRSP contribution that will be partially repaid upon receipt of the tax refund. The RRSP loan is in principle an excellent debt because it allows for interesting tax savings. This applies in the case of a temporary lack of liquidity that prevents you from contributing to your RRSP. Because, as mentioned above, the tax refund and the return on your investments can offset the cost of the loan. As a result, you can continue to contribute to your RRSP or increase your contributions, regardless of your situation.

Advantages of borrowing for your RRSP?
Benefit from a higher tax refund.
Take advantage of your unused contributions.
Reach your savings goals faster.

Some tips to remember.
Borrow only as much as you can repay without selling your investment.
For example, you should be able to repay your loan even if the value of your investment falls to 0.
Check your risk tolerance.
Anticipate and estimate how much money you would lose in a worst case scenario. For example, if the stock market lost 30% of its value, what would be the loss on your dollar investments? Would you be able to withstand that loss? Be aware that even with these losses, you are still obligated to pay back your loan.
Make sure you are financially sound.
If you are having trouble making payments on your current debts and loans, such as a mortgage or credit cards, borrowing to invest is probably not for you. You should be able to repay the loan (and its interest) without it causing you financial problems. Check the interest rate on the loan - is it competitive?

The possibility of repaying the loan at any time, in full or in part.

Source La Presse and the AMF