Getting a degree is a significant achievement, but it can be expensive. While students can get great jobs and high paying income with their degrees in the future, many students drop out of school because they can’t afford to cover the costs of higher education in the present.
Tuition fees, housing costs, cost of books, and food – these expenses can quickly become overwhelming for students. Banks understand that getting an education is a stepping stone for students to become higher-earning professionals, and that’s why they offer credit systems for them.
Some systems help students cover the costs associated with their education, which is repaid upon completion of their education when they have a higher income.
What is a Student Line of Credit?
While some people might use them interchangeably, a student line of credit is not the same thing as a student loan. A student loan is provided by the government (Provincial and or Federal), while a line of credit is provided by a financial institution, like TD bank. They’re both reserved for post-secondary education students who require financial assistance.
Student loans are available to students while still in school, and the loans have to be repaid with interest, but only upon graduation. Students can’t apply for a specific amount; the government determines how much to give based on their tuition and family income. Students can request a delay in repayment depending on their financial situation.
With student lines of credit, students make interest-only payments while still in school. The line of credit is paid back after the student graduates. Instead of a lump sum, they can borrow just what they need when they need it.
Students need a co-signer to acquire a line of credit. The co-signer’s financial status or income (usually students’ parents or guardians) is a crucial factor in determining the loan amount. This is because, as most students have little to no credit history, the banks will need someone else to ensure that used credit will be paid off.
TD Student Line of Credit
TD Bank offers a diverse package of student lines of credit tailored to suit the students’ situation. For example, students studying courses or in programs with higher costs may be eligible for higher credit limits than students in cheaper courses or programs.
TD Student lines of credit also typically carry lower interest rates than traditional loans or credit cards. TD may require that you have a co-signer if you do not have adequate income. This person will be responsible if you cannot pay off your debt.
How it Works
Upon approval for a TD student line of credit, you can access your line of credit via your TD Access Debit Card. With your debit card, you can use your line of credit to pay for all your school-related needs. The credit line isn’t limited to any specific kind of purchase; you can buy a laptop or an energy drink.
The meaning of the term “school-related needs” is solely at your discretion. It’s important not to get carried away and overspend, though, as all the money still has to be paid back. You can also write cheques and bank online; this is a bonus if you have the TD Student Chequing Account.
How the Credit is Repaid
A perk of the TD student line of credit is the flexible repayment plan. For as long as you’re still a student and then for up to 24 months after you graduate, you only need to pay back the interest on your account monthly and not the credit itself. Upon exhaustion of this grace period, when it’s time to repay the credit, your student line of credit will be converted to a student loan with monthly payments.
As we earlier stated, it’s easy to get carried away and overspend. To maximize your student line of credit, it’s essential you work with a budget or at least give yourself a clear definition of what “school needs” are. Without these checks in place, it’s possible to unknowingly rack up high debts on things you didn’t even need. Remember, it’s not free money.
TD Students Line of Credit Limits
TD offers different credit limits and interest rates depending on the program and course of study.
This package is for both full and part-time university or college students in Canadian institutions.
Full-time students can get a credit limit of up $20,000 annually and a maximum of $80,000 over four years of study.
Part-time students can get a credit limit of up to $20,000 annually and a maximum of $80,000 over eight years of study. Note that the credit limits are dependent on the student’s program.
They are designed for post-graduate students. The credit limits for post-graduate students are also dependent on the student’s program.
- Masters or Ph.D.: Up to $80,000 over two years of study
- Naturopathy: Up to $80,000 over four years of study
- Chiropractic: Up to $100,000 over four years of study
- Optometry/Pharmacy: Up to $125,000 over four years of study
- Law: Up to $125,000 over three years of study
- MBA: Up to $125,000 over your study period
They are designed for professional students; the credit limits are also dependent on the program of study.
- Dental: Up to $325,000 and $100,000 in your first year
- Medical: Up to $325,000 and $100,000 in your first year of study; continued access during residency.
- Veterinary: Up to $140,000; access up to $35,000 in your first year of study
Note that you don’t need to reapply. Apply once for a credit limit that you can use and re-use while in school.
TD Student Line of Credit Interest Rates
TD Bank offers two kinds of interest rates, fixed and variable. Fixed interest rates stay the same till the loan is paid off, meaning you will always pay the same monthly amount and, thus, know exactly when your loan will be paid off.
As a result of this, fixed rates usually start higher than variable rates. Variable interest rates are subject to change. The TD student line of credit variable interest rates depend on the TD prime rate, falling and rising with it.
As of March 4th, 2021, these are the TD student line of credit variable interest rates for students according to their programs.
|Post-Secondary Certificate Program||TD Prime Rate + 1.50%|
|Undergraduate||TD Prime Rate + 1.00%|
|Undergraduate - Honours Business Administration (University of Western Ontario)||TD Prime Rate|
Graduate and Professional Students
|Graduate (Masters, Ph.D.)||TD Prime Rate + 0.50%|
|Medical, Dental, and Veterinary||TD Prime Rate - 0.25%|
|MBA and MFin||TD Prime Rate|
|Chiropractic and Naturopathy||TD Prime Rate + 1.00%|
|Optometry, Pharmacy, and Law||TD Prime Rate|
The TD prime rate, as of March 4th, 2021, is 2.45%. If you’re reading this at a later date, please refer to the website directly for up-to-date numbers.
The interest rates for TD student lines of credit are also subject to change. If you’re reading this at a later date, please refer to the website directly for up-to-date rates.
TD Student Credit Cards
TD Bank also offers a diverse collection of credit cards designed specifically for students, including reward point cards and cashback cards. If you need a credit card or want to start building your credit score early, browse through TD’s credit cards suite for students.
Disclaimer: Rates and product offerings are always changing, so this article might not reflect the current market situation. Please contact your financial advisor before making any financial decisions.
How can I apply?
You can apply by booking an appointment, visiting a branch, or calling 1-855-882-6918. Use TD Banks’ branch locator to find a branch close to you.
Is it open to international students?
Yes. TD has an International student package that caters to the specific needs of international students.
Can I use my credit card to withdraw cash from an ATM?
All TD CHIP Credit Cards are issued with ATM access. Alternatively, you can add your TD Credit Card as an option on your TD Access Card by calling TD Credit Cards or visiting any TD Canada Trust branch.
How can I improve my credit score?
You can improve your credit score by paying your bills either on or before the due date. Also, check to ensure that your credit products’ balance is not always at or close to the credit limit. And lastly, by limiting the number of credit applications or credit checks.
Does the TD app display the current interest rate of my Line of Credit (LOC)?
NO. Currently, this information is not available on the TD app. Log in to EasyWeb to check the current terms of your Line of Credit (LOC) online.