College Planning: Private Student Loans

Should a private student loan be part of your plan?

Planning for college can be complex at times, with many questions to think about. Where should I go to school? Can I afford it? Should I take out a federal or private student loan? Will I be able to repay it?

The following information is designed to help students understand when a private student loan may be a good option and how to plan for a SunTrust student loan.

First, know what your financial need and your funding options are.

A private student loan is a loan issued by a lender other than the federal government. When considering student loans, remember that some federal student loans may offer advantages over private student loans. For this reason, it is suggested that students seek federal student aid and scholarships before private student loans. Here is a checklist of questions to ask when applying for federal financial aid:

Preguntas frecuentes

What are the deadlines of the schools I am interested in?

Contact all schools that you are interested in attending and work with the admissions office to determine deadlines and specific paperwork needed for the admissions process.

Have I researched and applied for relevant scholarships and grants?

Start your search online with our scholarship page and also consider entering the SunTrust Off to College Scholarship Sweepstakes (no purchase necessary, terms apply). Don't forget to check with the college you will be attending or your local high school guidance office.

Have I completed the FAFSA® form?

Now that you have narrowed your choice of colleges/universities to attend, you can begin the financial aid process. Start by filing the Free Application for Federal Student Aid (FAFSA) as soon as possible after October 1. The FAFSA is used by all colleges to determine your eligibility for federal, state and institutional aid, including loans.

Have I reviewed my Student Aid Report?

After you file your FAFSA, you will receive your Student Aid Report (SAR) online or in the mail. Review it carefully to make sure you didn't make any mistakes on your FAFSA form. Your SAR will automatically be sent to the schools you listed on the FAFSA.

Did I consider my Award Letters?

Each school's financial aid office will then determine your financial need to attend their school and send you an award letter. Your award letter may contain aid comprised of grants, scholarships, work-study awards, institutional aid and/or loans. Review each award letter very carefully to determine what is best for you. You can accept or decline any part of the award letter.

Have I looked into federal student loan options?

Information regarding the federal student loan programs is available in our section on Federal Student Loans.

Next, if you need additional money, consider a SunTrust private student loan.

If your financial aid award package doesn't cover all your education costs, look into private student loan options from SunTrust. Private student loans, sometimes referred to as alternative loans, can help with college-related costs including miscellaneous expenses such as a computer, transportation, housing, etc.

Finally, plan for a SunTrust private student loan.

If you've decided a private student loan is the right choice, when you apply, you'll need to know the loan amount to apply for and, if approved, the loan options you want. Here are some things to help you prepare:

 

  • Calculate the loan amount to apply for.

    • Your loan amount should be the cost of attending your school (including education related expenses such as tuition, room and board, books, living expenses) minus the financial aid, savings and other funding resources you have.

      Try it yourself: Use our College Loan Calculator to find a loan amount to request. (Don't know the cost of attending a school or your financial aid and scholarships yet? Plug in sample amounts for now to see how it works.) Try the College Loan Calculator now >

  • Review the loan options that are available.

    • Unlike a side order of fries with a burger, loan options are not an afterthought of the whole loan request. Loan options, such as a choice of fixed or variable interest rate, the loan term length and repayment options, are very important and should be a central part of your loan planning because they can greatly affect the total amount of interest you pay over the life of the loan. Here are the SunTrust private student loan options available for you to consider:

      Rate type: fixed versus variable

      • Fixed interest rates do not change for the life of the loan. Fixed rates are generally a little higher than variable rates at the outset, but they offer predictable monthly payments and may be less expensive in the long run.
      • Variable interest rates for each calendar month are calculated taking the One-Month LIBOR, an industry benchmark rate that drives variable rate changes and adding it to a margin rate (a fixed part of the rate that doesn't change) - this means the variable rate could go up or down every month.

      Repayment options1

      Once a repayment option is chosen, and the loan has been disbursed, it cannot be changed. Please consider carefully. If you opt to choose a repayment option that requires making payments while in school, make sure you consider what your budget will be like during the time you'll be in school to ensure you can afford to make the payments. Learn about SunTrust’s private student loan repayment options.

      Preguntas frecuentes

      How does In-School Deferment work?

      • Make no payments while in school at least half-time.
      • This option frees you up to focus on your studies — so you don't have to work while in school to make your loan payment.
      • While your payments are deferred, your interest still accrues and is added to the principal balance; it will be capitalized (added to the loan balance) when repayment of principal and interest begins. Note: Federal student loans also accrue interest in deferment, although for subsidized loans, interest generally does not accrue while the borrower is in-school.
      • In-school deferment is usually the most expensive repayment option.
      • Payments may be deferred (a) while student is enrolled at least half-time at an approved school, and (b) during the 6-month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date.

      What is Interest-Only Repayment?

      • Pay only the interest while in school at least half time.
      • With this option, you avoid paying interest on interest.
      • Principal may be deferred (a) while student is enrolled at least half-time at an approved school, and (b) during the 6 month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date.
      • Making interest-only payments while in school does not reduce the principal balance of the loan.

      What is Partial Interest Repayment?

      • Pay partial interest of $25 per month while in school at least half time; this option is available on loans of $5,000 or more.1
      • This option allows borrowers the opportunity to start building good credit habits by paying a manageable monthly payment.
      • Partial interest payments begin 30-60 days following the first disbursement date.
      • Principal and any remaining interest above $25 may be deferred (a) while student is enrolled at least half-time at an approved school, and (b) during the 6-month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date.

      How does Immediate Repayment work?

      • Pay principal and interest while in school at least half time.
      • Each month, make the full monthly principal and interest payment; the first payment starts approximately 30-60 days following the final loan disbursement date.
      • This is usually the least expensive repayment option.
      • There are no prepayment penalties on these repayment options

      Try it yourself: Use the Payment Comparison Tool for the Custom Choice Loan® to see how changing the Repayment Option from Immediate Repayment, to Interest-Only to Partial Interest to In-School Deferment can change the Total of Payments amount. Try the Payment Comparison Tool >

      Loan length/repayment term2

      Try it yourself: Use the Payment Comparison Tool for the Custom Choice Loan to see how changing the loan term from 7 to 10 to 15 years can change the Total of Payments amount. Try the Payment Comparison Tool >

  • Determine which SunTrust private student loan to apply for.


    • SunTrust has private student loan options for both undergraduate and graduate students. Not sure which SunTrust private student loan best fits your needs? Compare the loans now >

Open to high school seniors and college undergrads, two winners selected every two weeks from October 29, 2018 until May 13, 2019. No purchase necessary. Terms apply.

 

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Información importante sobre estos productos

Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. View and compare the available features of SunTrust private student loans.

Union Federal is a federally registered trademark of Cognition Financial Corporation used by SunTrust Bank under license. The Union Federal Private Student Loan is funded by SunTrust Bank and is not offered in connection with any other lender or the federal government. Cognition Financial Corporation is not an affiliate of SunTrust Bank.

Es posible que se apliquen ciertas restricciones y limitaciones. SunTrust Bank se reserva el derecho a cambiar o interrumpir estos programas sin previo aviso. These loan programs are subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.

©2010 fafsa.gov. All rights reserved. FAFSA is a trademark of the U.S. Department of Education.

1

Any applicant who applies for a loan the month of, the month prior to, or the month after the student’s graduation date, as stated on the application or certified by the school, will only be offered the Immediate Repayment option. The student must be enrolled at least half-time to be eligible for the partial interest, fully deferred and interest only repayment options unless the loan is being used for a past due balance and the student is out of school. With the Full Deferment option, payments may be deferred while the student is enrolled at least half-time at an approved school and during the six month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date. The Partial Interest Repayment option (paying $25 per month during in-school deferment) is only available on loans of $5,000 or more. View payment examples for the Custom Choice Loanthe Union Federal Private Student Loan or the Graduate Business School Loan. With the Immediate Repayment option, the first payment of principal and interest will be due approximately 30-60 calendar days after the final disbursement date and the minimum monthly payment will be $50.00. No hay penalización por pago anticipado.

2

View payment examples for the Custom Choice Loan, the Union Federal Private Student Loan, or the Graduate Business School Loan. The 15 year term and Partial Interest Repayment option (paying $25 per month during in-school deferment) are only available for loan amounts of $5,000 or more. Making interest only or partial interest payments during in-school deferment (including the grace period) will not reduce the principal balance of the loan.

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