In-School Refinance Option for Private Student Loans

Refinance existing private student loans into a new loan.

SunTrust offers an In-School Refinance Option that gives students the option to refinance existing private student loans1 into a new private student loan. This option combines your existing private student loan debt with a new SunTrust loan for the next semester. When choosing the SunTrust In-School Refinance Option, your goal should be to get clear benefits from refinancing. Some possible benefits are:

  • A single monthly payment – When you refinance, your private student loan monthly payments will be consolidated into one convenient payment.
  • A lower interest rate – One benefit of refinancing could be transferring your existing private student loan(s)1 to a new, lower interest rate.
  • Loan terms you prefer – You could change the repayment term (the number of years to repay the loan) or the repayment option on your existing private student loan(s) and possibly lower your monthly payment.

Interested but still not sure about which program to apply for?

1. Apply for a SunTrust private student loan

2. After being approved for a new SunTrust private student loan, the choice to add on the In-School Refinance Option will be presented.

The following information, typically found on a billing statement or online account with the loan servicer, will be requested for each of the loans that the student applicant wants to refinance:

  • Loan Servicer Name (often a third party servicing company such as AES or Nelnet)
  • Loan Type
  • Interest Rate (interest rate being charged on your loans)
  • Account Number
  • Payoff Amount

3. Submit a payoff statement dated within the past 30 days for each of the loans the student applicant wants to refinance (this will be requested during the loan process); you might need to contact the loan servicer to request this.

4. Upon approval, your existing private student loan(s) will be added to your new loan, with the new loan rates and terms. Important: You should continue to make payments on your existing private student loan(s) until they are paid off.4

Interested but still not sure about which program to apply for?

FAQs: In-School Refinance Option

When considering the option to refinance existing private student loan(s) into a new SunTrust private student loan, SunTrust wants to ensure you've thought through potential considerations of doing so. Here are answers to some of the questions you may have about the In-School Refinance Option:

Frequently Asked Questions

Is this option offered after I graduate, when I am out of school, like a consolidation?

No. This option is similar to a balance transfer option and is only offered to students that are also taking out a private student loan to fund an upcoming semester or academic period. 

What kinds of student loans can I refinance with a new SunTrust private student loan? 

The student (not a cosigner) can refinance private student loans and private consolidation loans that are not in past due status and that were used for, postsecondary (post high school) Qualified Higher Education Expenses (see below for a description of Qualified Higher Education Expenses).

Loan types that cannot be refinanced into a new SunTrust private student loan:

  • Private student loans for which the student applicant is not the primary borrower
  • Federal student loans
  • Loans made by a school or other educational institution
  • Private student loans in past due status

What are Qualified Higher Education Expenses?

  • In order to refinance existing private student loans into a new SunTrust private student loan, the existing private student loans must have been used to pay for Qualified Higher Education Expenses. Private student loan consolidation loans can also be included as long as the loans that were consolidated were also used to pay for Qualified Higher Education Expenses.
  • Qualified Higher Education Expenses generally include tuition and fees, room and board, costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study, an allowance for books, supplies, transportation, and miscellaneous personal expenses, and a reasonable allowance for the documented rental or purchase of a personal computer. The formal definition for Qualified Higher Education Expenses is included in Section 221 of the Internal Revenue Code (26 U.S.C. § 221) and includes the items in the definition of "cost of attendance" in Section 472 of the Higher Education Act of 1965 (20 U.S.C. § 1087ll), except as otherwise stated in the Internal Revenue Code's definition of Qualified Higher Education Expenses.
  • If you have questions about particular costs or specialized circumstances or need more information, please consult the full definition of "cost of attendance".

How will refinancing my loan(s) affect my rate?

You can choose to lock in a fixed interest rate or refinance at a variable rate.

  • By choosing a fixed interest rate, the interest rate and monthly payment on the new SunTrust private student loan will be constant throughout the life of the loan.
  • By choosing a variable interest rate, the interest rate on the new loan will be based on the 1-Month LIBOR index and will fluctuate throughout the life of the loan. The monthly payment on the new SunTrust private student loan will fluctuate based on changes in the 1-Month LIBOR index.

If I refinance my student loan(s) with a new repayment option and/or term, how will that affect me?

The loan options (rate type, repayment option and term) that you choose for the new SunTrust private student loan will apply to the existing private student loan(s) that you refinance. 

  • For example, if payments on the existing private student loans(s) are currently deferred, choosing a repayment option other than deferment on the new loan will require you to make payments while you are in school on the principal and/or interest, depending on which repayment option you choose: Interest-Only, Partial-Interest or Immediate Repayment. Conversely, if you are currently paying on your existing private student loans while in school and you choose In-School Deferment5, you will no longer be required to pay on your loan while you are enrolled in school.6
  • When a longer repayment term is chosen through refinancing, it is likely that more interest will be paid over the life of the loan unless the interest rate is significantly lower.
  • Conversely, when a shorter repayment term is chosen through refinancing, it is likely less interest will be paid over the life of the loan unless the interest rate is significantly higher. With shorter repayment terms, consider the monthly payment — shorter repayment terms carry higher monthly payments.

What if I have a cosigner on my existing private student loan(s)?

Unless the cosigner on the private student loan(s) being refinanced is on the new loan, that cosigner will be relieved from the debt obligation, which typically improves the cosigner's debt to income ratio.

When is refinancing not an advantage?

  • The terms of the new loan may not be advantageous if your credit has undergone significant negative changes since you applied for your existing private student loan(s).
  • If your existing private student loan(s) has options that reduce the interest rate, or save you money through rewards, those will be lost if the loan is paid off by the new loan. If your existing private student loan(s) did not offer these, or you lost the benefits, this may not be a consideration.
  • If you are currently receiving relief in the form of a 6% interest rate cap on an existing private student loan(s) pursuant to the Servicemembers Civil Relief Act, by choosing to refinance such loan(s), that benefit will be discontinued, although the loan may continue to be eligible for relief in certain circumstances:
    • If you are a resident of Louisiana, Ohio or Pennsylvania and are on active duty
    • If you are a resident of Louisiana or Ohio and your spouse is a qualifying servicemember
    • If the cosigner is a resident of Louisiana, Ohio or Pennsylvania and is on active duty
    • If the cosigner is a resident of Louisiana or Ohio and his or her spouse is a qualifying servicemember

Should I continue making payments on the loan(s) I'm requesting to refinance?

Yes, you should continue making any required payments on the existing private student loans you choose to refinance until they are paid off. There will be a lag between the time you request this option and the time the loans are actually paid off and it's important to continue to make payments so your credit isn't affected and no late-payment fines are incurred.

Who do I contact with questions?

SunTrust is here to help throughout the entire process. For more information, or to speak to a Customer Service representative, please call the phone number for the program you're interested in, as listed below:

  • Custom Choice Loan® - 866.232.3889
  • AAA Advantage Loan - 800.513.1464
  • Union Federal® Private Student Loan - 866.513.8445
  • Graduate Business Loan - 866.232.3889

Interested but still not sure about which program to apply for?

Important Information

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.

Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue these programs without notice. These loan programs are subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.

1

Private student loans that can be refinanced with a new SunTrust private student loan are private student loans and private consolidation loans that the student applicant used for, or used to refinance loans used for, certain postsecondary expenses not currently in a past due status. Loans that cannot be refinanced into this loan are (1) private student loans for which the student applicant is not the primary borrower, (2) Federal student loans and (3) student loans made by an educational institution. Loans being refinanced must have been used for "qualified higher education expenses" (defined by the Internal Revenue Code), which consists of expenses included in the Higher Education Act's definition of "cost of attendance".

2

Loans being refinanced must have been used for "qualified higher education expenses" (defined by the Internal Revenue Code), which consists of expenses included in the Higher Education Act's definition of "cost of attendance". "Qualified higher education expenses" generally include tuition and fees, room and board, costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study, an allowance for books, supplies, transportation, and miscellaneous personal expenses, and a reasonable allowance for the documented rental or purchase of a personal computer. 

3

The minimum loan amount is $1,001 with exceptions based on the student’s state of permanent residence, as follows: Alaska: $5,001, Colorado: $3,001, New Mexico: $2,501, Oklahoma: $5,001, Rhode Island: $5,001, South Carolina: $3,601. The maximum annual loan limit to cover in-school expenses for each academic year (July 1 to June 30 of the applicable year) is determined by your school’s cost of attendance, minus other financial aid such as federal student loans, scholarships or grants, up to $65,000 for the Custom Choice Loan and Union Federal Private Student Loan or up to $95,000 for the Graduate Business Loan. The loan amount must be certified by the school. The annual loan amount maximums are subject to an aggregate maximum student loan debt limit (which includes all student loans and certain unsecured consumer debt and is calculated per applicant separately including students and cosigners) of $150,000 for Custom Choice Loan and Union Federal Private Student Loan or up to $175,000 for the Graduate Business Loan. If you choose the In-School Refinance Option, the maximum amount that you can refinance is $150,000 minus the amount that you are applying for to cover in-school expenses.

4

You should continue making required payments on the loan(s) you choose to refinance until they are paid off. Time will elapse between when this option is requested and the when the loans are actually paid off. If the payoff amount(s) sent to your servicer(s) do not cover the entire balance owed on the existing loan(s), the outstanding balance(s) will remain your responsibility.

5

Principal and interest 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. Any accrued and unpaid interest will be capitalized (added to the unpaid principal loan balance) when repayment of principal and interest begins. There are no prepayment penalties.

6

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. With the Full Deferment option, payments may be deferred while a 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 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. For Partial Interest and Fully Deferred loans, any accrued and unpaid interest will be capitalized (added to the unpaid principal loan balance) when repayment of principal and interest begins. There are no prepayment penalties. The Partial Interest Payment option of $25 per month is only available on loans of $5,000 or more. View payment examples for the Custom Choice Loan; view payment examples for the Union Federal Private Student Loan; view payment examples for the Graduate Business School Loan. Making interest only or partial interest payments while in deferment (including the grace period) will not reduce the principal balance of the loan. If you choose the Immediate Repayment option, the first payment of principal and interest will be due approximately 30‐60 calendar days after the final disbursement date, the minimum monthly payment will be $50.00 and it will apply to the new loan in full, including, if applicable, any existing private student loans that you refinance into the new loan.

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