Private student loans are considered the loans of last resort, when all other means of obtaining funding for college have been exhausted. When private loans are required to cover any shortfall in covering the costs of education it pays to take the time to compare lenders and the various options available. Not all private student loans are created equal and students are given a range of choice from the Sun Trust Bank.
Sun Trust offers two basic private student loans. The Academic Answer is a no fee variable rate loan, whilst the Custom Choice loan can be either fixed or variable depending upon personal preference, and may be subject to fees. The Custom Choice offers a variety of repayment options that can be tailored to meet individual needs.
Academic Answer offers a variable interest rate based on the LIBOR index, with current rates starting from as low as 2.94% based on personal credit and the credit of a responsible co-signer. Co-signer release terms begin after 48 months of consecutive on time payments.
A graduation reward of 2 percent is offered with the Academic Answer loan, but this should not be deciding criteria as it only represents a $200 reduction on a loan with a principal of $10,000. Those who qualify for the graduation reward must provide proof of graduation within 90 days. The interest rate can be reduced by 0.25% if the student opts to pay by automated debit, with an additional 0.25% discount available if payments are made from a Sun Trust deposit account.
The same discounts apply to the Custom Choice Loan but the graduation reward is 1 percent rather than 2. Custom choice allows the student to control the repayment schedule by opting for immediate repayments, interest only repayments, partial interest payments of $25 per month, or full deferment.
The choices apply whilst the student is in college, with partial interest repayments representing a good choice for those who cannot afford to make full interest payments but don’t want the full amount of interest to be capitalized and added to the principal. Repayment terms available are 5, 10, 15 or 20 years, depending on the amount borrowed, but students should always consider the shortest term wherever possible to reduce the total amount repaid.
Fees may be applied to the Custom Choice loan and range between 0% – 6% based on credit. A fixed rate option is available which ranges from as low as 3.9% to 13.99%. The high rate is at the high end so students with poor credit and a co-signer who does not qualify for a lower rate can find a better deal with another lender. However those with a co-signer with excellent credit will find the 3.9% fixed rate one of the best currently available.
Fixed rate student loans are a safe option for an uncertain future if one considers the possibility of interest rates rising over the term of the loan. Depending on credit students could get an excellent deal with a private loan from Sun Trust Bank making it definitely worth considering as a viable provider.