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Student loan debt can quickly become overwhelming, particularly if you have multiple federal and private student loans. Not only is it difficult to manage the multiple required payments, but it can also put a strain on your finances because of the significant amount of your income that is going toward making the minimum monthly payments. Many people turn to consolidation to reduce the multiple payments and reduce the amount you owe each month. Although consolidating your student loan debt has great advantages, it does come with disadvantages as well.

Federal Student Loans

There are a limited number of lenders who offer federal student loan consolidation services, and TD Bank is not one of them, so they cannot consolidate your federal student loans. If you are considering federal loan consolidation, you may want to reference the Department of Education website to look into their Direct Consolidation Loan options.

If you choose an alternate lender who can offer federal student loan consolidation, be sure to understand the benefits you will lose if you choose to consolidate outside the federal government options. Many times, forbearance and deferment options are eliminated if you decide to consolidate your federal loans using a private lender.

Private Student Loans

Although TD Bank does not have a specific private student loan consolidation option, they do offer personal loans up to $50,000 that you can use to pay off your student loans and then have one monthly payment to repay the personal loan. Although the details and rates vary by state, the minimum annual percentage rate (APR) is 8.99%, which is slightly higher than some other lenders, although it is still a competitive rate.

If you want to borrow $15,000 or less, TD Bank has an express option that allows you to receive the money within one business day. While this is convenient, be sure to understand the details and interest rate of the loan before you apply. If you are having difficulty making the minimum monthly payments on your student loans, you will want to make sure the loan payment is lower than the amount you are currently paying.

Understand Your Options

Although it is fairly common to consolidate student loans, it is important to do some research and compare a few different lenders and the rates and terms of their loans. A consolidation it is only beneficial if it reduces your monthly payment amount and allows you to combine the majority of your debts.