SunTrust Private Student Loans Review
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.
Overview of SunTrust private student loans
SunTrust offers three main types of private student loans:
- Custom Choice Loan® -- Available to undergraduate and graduate students who are either U.S. citizens or permanent residents, in amounts ranging from $1,001 to $65,000 (annually). APRs range from 4.371%-13.375% (variable) and 5.344%-14.050% (fixed).
- Union Federal® Private Student Loan -- Same annual loan maximums and APR range as the Custom Choice Loan®, but open to international students as well. These first two options have a few small differences when it comes to perks, which I’ll get to in a second.
- Graduate Business School Loan -- Specifically designed for students seeking an MBA or other graduate business degree, this loan offers a higher limit ($95,000). The Graduate Business School Loan currently offers APRs ranging from 4.371%-9.346% (variable) and 5.344%-9.877% (fixed) and is available to U.S. citizens and permanent residents.
In this review, I’ll discuss some of the pros and cons of SunTrust student loans, as well as the differences in perks between the three loan types.
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Suntrust private student loans
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Rates & Terms:
Fixed Rates: 4.551 - 11.3%
Variable Rates: 3.751 - 10.8%
Terms: 7, 10, and 15 years
What we like about SunTrust private student loans
- High auto-pay discount: Enrolling in autopay gets borrowers a 0.25% interest rate discount. This is fairly common in the student loan industry, but SunTrust banking customers can get an even better 0.50% discount for auto-paying from a SunTrust bank account.
- Graduation rewards: Some SunTrust student loans offer a “graduation reward.” With the Custom Choice Loan® borrowers can get a 2% reduction in their student loan principal upon graduation. The Graduate Business School Loan offers a 1% principal reduction upon completing the degree program.
- On-time payment reward: The Union Federal® Private Student Loan doesn’t offer a graduation reward, but does give an additional 0.25% interest rate reduction after 36 on-time monthly payments. Combined with the auto-pay discount, this can mean up to 0.75% off your interest rate.
- Cosigner flexibility: Students may need a cosigner, but this is not necessarily a requirement if the student borrower has an established credit history of their own and their own source of income.
- High limits: SunTrust’s undergraduate and graduate loans offer annual loan maximums of $65,000 and a total student debt limit of $150,000. For the Graduate Business School Loan, SunTrust allows an annual loan maximum of $95,000 and an aggregate student debt limit of $175,000.
- In-school loan payment options: SunTrust offers borrowers a choice between deferring their payments while in school, starting repayment immediately, paying just $25 per month while in school, or paying the interest due.
- No fees: SunTrust’s private student loans don’t charge any application, origination, or prepayment fees.
What could be improved
Like most financial products, there’s no such thing as a perfect student loan. There are a few potential downsides to SunTrust’s private student loans, including:
- Repayment terms: SunTrust has just three repayment term options -- seven, 10, or 15 years. For the Graduate Business School Loan, the only repayment terms are seven or 10 years. Many of its competitors offer a greater choice of repayment terms.
- Cosigner release: SunTrust allows for a loan’s cosigner to be released from the obligation, but only after 36 on-time payments. Many competitors offer shorter cosigner-release terms.
- Hard credit pull: There’s no way to check your interest rate and loan terms without a hard credit pull, which can affect your credit score.
Here's a general list of eligibility requirements for SunTrust private student loans:
- Enrolled in an undergraduate, graduate, or professional degree program on at least a half-time basis.
- Not have more than $150,000 in total existing student debt ($175,000 for business school loans).
- Either have established credit and an income source, or have a cosigner.
- Be a U.S. citizen or permanent resident (although international students are eligible for the Union Federal® Private Student Loan).
Who SunTrust lends to
SunTrust offers student loans to undergraduate, graduate, and professional students who attend approved schools and are enrolled at least half time in a degree program. They also offer loan refinancing in addition to newly-originated student loans.
Who these loans are right for
SunTrust student loans could be a smart choice for borrowers who have maxed out their federal student loan borrowing capacity and need additional funds to cover their cost of attending school.
They can be an especially good choice for SunTrust banking customers, as a 0.50% auto pay discount is one of the best in the business. The possibility of a principal-reducing graduation "gift" is another feature that sets SunTrust apart from many of its peers.
SunTrust loans can also be a good choice for borrowers who can qualify for student loans on their own credit history and employment situation. Many private student lenders require cosigners for all borrowers, so creditworthy students may want to take a closer look at SunTrust.
Alternatives to consider
It’s generally a good idea to max out your federal student aid as well as any scholarships or grants before applying for a private student loan.
Federal student loans have a few key advantages, including:
- No credit check or income requirements.
- No cosigner required.
- Some federal loans are subsidized, meaning that the federal government pays the interest on the loans while you’re in school.
- Federal loans qualify for forgiveness programs such as Public Service Loan Forgiveness (PSLF) or teacher loan forgiveness.
- Federal loans offer income-driven repayment plans, such as Pay As You Earn (PAYE), which limit your monthly student loan payments to a certain percentage of your disposable income.
For these reasons, many private student loan providers (SunTrust included) encourage borrowers to use their products to bridge their funding gap after they’ve exhausted their federal borrowing capacity.
In addition, there are several other private student lenders you may want to look at. Some offer more flexible repayment terms than SunTrust, while others offer the possibility of deferring payments if you fall on hard times. Our list of the best student loans for 2019 is a good place to start comparison-shopping.
How to apply for a SunTrust student loan
You can apply for a SunTrust student loan online. The application shouldn’t take more than 15 minutes or so, and it’s a good idea to have information about your school, other financial aid, employer (if applicable), and your or your cosigner’s income. As part of the approval process, SunTrust may ask you for documentation such as a copy of your driver’s license, proof of permanent residency, W-2s or 1099s, although the need for additional documentation may arise.