Get the answers you need to learn more about the Academic Answer loan from SunTrust or private loans in general. Click on a question to get an answer.
Frequently Asked Questions About the Academic Answer® Loan from SunTrust.
1) How is the interest rate calculated for the Academic Answer Loan?
- The Academic Answer Loan is a private education loan. The variable interest rate is calculated by adding the current one-month LIBOR index (which is rounded up to the nearest 1/8th of 1%) to a margin.
- The Academic Answer interest rate for graduate students starts as low as the one-month LIBOR1 + 3.50%, currently a 3.75% interest rate and 3.68% APR2. The Academic Answer rate for undergraduate students starts as low as one-month LIBOR + 4.00%, currently a 4.25% interest rate and 4.16% APR3
2) Are there fees associated with the Academic Answer Loan?
Late fees may be charged if your loan payment is not received within 10 days of the due date. These fees will not exceed 5% of your monthly payment but can be charged every month that your payments are late. A return payment fee of $30 may also be charged for checks or preauthorized payments that are not honored.
There are no fees for prepaying an Academic Answer loan. If you have paid ahead on your loan, interest will continue to accrue on the remaining unpaid principal amount. In addition, there are no fees to access your loan payment history or to send documents via express delivery or fax. There are also no fees associated with granting forbearance for the Academic Answer loan.
3) What are the Academic Answer Loan limits?
Your school's cost of attendance, minus any federal loans, scholarships or grants, is the maximum loan amount per academic year.
Academic Answer loan limits are set by grade level. To determine the maximum loan amount you may be considered for, use our convenient loan limit calculator.
Aggregate maximums (includes all student loans and any unsecured, deferred consumer debt):
Undergraduate: $100,000
Graduate: $150,000
Minimum Loan Size: $1,001*
* The minimum loan amounts are higher in these states: Alaska: $5,001, Colorado: $3,001, New Mexico: $2,501, Oklahoma: $4,401, Rhode Island: $5,001, South Carolina: $3,301. The Academic Answer loan is not available to students whose permanent residency state is IA, IL, TX, WA or WI, or for cosigners whose permanent residency state is IL.
4) What repayment options are available?
The Academic Answer Loan has three repayment options available:
Full Deferral: Defer all principal and interest charges while in school; note that interest will accrue during the deferment period and will be capitalized (added to the loan balance) at the time of repayment
Interest-Only: Pay only the accrued monthly interest while in school
Immediate Repayment: Begin making monthly principal and interest payments immediately
5) Is there a grace period?
Yes. Payments do not have to start on the Academic Answer Loan until six months after graduation or dropping below half-time status.
6) Is there a minimum monthly payment?
Yes. Once the payments begin, the minimum monthly payment is $50.3
7) How frequently should I expect my monthly payment to change?
8) How will the monthly payments be applied if I wish to pay down my principal?
including any late charges, and c) Outstanding principal balance.
9) Is there a deferment option?
Payments can be deferred while enrolled in school at least half time. Interest that accrues during this time will be capitalized (added to the loan balance) at repayment.
Deferment periods:
Undergraduate: up to 60 months
Graduate: up to 48 months
10) What expenses can the Academic Answer Loan cover?
The Academic Answer Loan can be used to cover education-related expenses including tuition, fees, books, living expenses, a new computer, etc.
11) Do I have to be enrolled at least half-time to receive the Academic Answer Loan?
Yes. Borrowers must be enrolled at least half-time in an eligible and participating school in order to receive the Academic Answer Loan.
12) Does my school's financial aid office have to certify the loan?
Yes, the Academic Answer loan is a school-certified product. When certifying a loan, the financial aid office will verify you are eligible for the loan amount requested. Your funds will be sent directly to the financial aid office to be applied to your account.
13) How many disbursements can be made on the Academic Answer Loan?
Up to four disbursements can be made for a single Academic Answer Loan.
14) What if my school is not listed as a participating school?
If your school does not appear on the Academic Answer loan list, then unfortunately we are not serving your institution at this time. Your school's Financial Aid Office may be able to recommend another private loan lender who offers a loan for your school.
15) Does SunTrust offer any discounts?
Each Academic Answer Loan is eligible for a $300 principal reduction upon graduation (proof of graduation is required). In addition, the interest rate can be reduced by 0.25% if all of the required payments are automatically deducted from a personal bank account.
16) Do you offer cosigner release?
Yes. If the initial 48 consecutive principal and interest payments are made on time, the borrower can apply to have the cosigner released from the loan. The borrower must meet credit guidelines at that time.
17) Who is eligible to apply for the Academic Answer Loan?
Borrower eligibility includes the following:
The student must be the legal age of majority or at least 17 years of age with a Cosigner who is legal age of majority. The legal age for entering into contracts is 18 years of age in every state except Alabama and Nebraska (19 years old), and Mississippi and Puerto Rico (21 years old).
The borrower must be a U.S. citizen or permanent resident in an eligible state
The borrower must be attending an eligible and participating school
The borrower must be enrolled at least half-time in a degree program
The borrower's permanent residence is NOT in Illinois, Iowa, Texas, Washington, or Wisconsin. The cosigner's permanent residence is NOT in Illinois.
Many borrowers will need a cosigner. If you are concerned about being approved for a private loan, or you don't have a substantial credit history, we recommend you consider strengthening your chances by adding a creditworthy cosigner.
18) What documentation do I need to provide?
19) What information is needed to apply for the Academic Answer Loan?
The following information is needed to complete the application. If applying with a cosigner, the cosigner will also need to provide this information.
Name
Social Security number
Date of birth
Permanent address
Monthly rent or house payment
Home phone number
Occupation
Employer information
Gross annual income
References: name, address, and phone numbers for two people who do not live with the borrower or cosigner
20) What is the one-month LIBOR index?
The one-month LIBOR (London Interbank Offered Rate) is a financial index to which many adjustable rate loans are tied. Over the last 10 years, the LIBOR has been consistently lower than the Prime rate. Click here for a historical comparison of the one-month LIBOR vs. the Prime rate.
21) Is the interest tax-deductible?
Interest on student loans may be tax deductible. Please consult your tax advisor or visit irs.gov for more information.
22) What happens to the interest rate if I default on my loan?
If you fail to make any of your monthly payments in full, according to the due date on your monthly billing statement, your loan will be considered in default. Your interest rate may continue to change monthly, as it did prior to default.
23) How do I cancel my loan if I am unhappy with the final terms?
If you would like to cancel your newly approved and/or disbursed Academic Answer loan, you must send a written cancellation notice to SunTrust, to your school, and to your cosigner, if applicable, within 10 days of receiving the Disclosure Statement. If your loan funds have already been disbursed, they must be returned within 30 days. If you send a written cancellation notice but fail to return your loan proceeds within 30 days, your loan will remain in effect and you will be in default.
Frequently Asked Questions About Private Loans in General
1) What is a private loan?
Unlike Federal Student Loans, private student loans are specialized education loans based on your credit history and income. Lenders typically give better terms for better credit history. Many lenders also allow cosigners which can help you qualify for better rates.
2) What can private loans be used for?
Private student loans can be used for any education-related expense including tuition, books, and room and board.
3) Who can apply for a private loan?
The student must apply for the loan. Since many students do not have extensive credit history, consider applying with a creditworthy cosigner to increase your chances of possibly receiving better rates and terms.
4) Are there application deadlines?
No. There are not typically any application deadlines for private loans.
5) What is the application process?
After submitting your online application, you will receive an immediate credit decision. Even if you are conditionally approved, you may still add a creditworthy cosigner to your loan application. You will then receive paperwork in the mail as well as notification of any additional documentation that may be required for your loan. Once all paperwork is received, your loan may be disbursed in as little as 2-5 business days.
6) Are there any fees?
Based on your credit history, there may be fees associated with origination, disbursement or repayment.
7) What are the interest rates?
Interest rates will be based on your or your cosigner's credit history and are generally stated as an index, such as Prime or LIBOR, plus a margin.
8) Is the interest tax deductible?
Interest on student loans may be tax deductible. Please consult your tax advisor or visit irs.gov for more information.
9) How soon will I receive my funds?
Private loan funds are usually disbursed within 2-5 business days of receiving all necessary paperwork.
10) Who offers private loans?
Banks, private lenders and other financial institutions offer private student loans.
11) Are there any deferment options?
You can typically choose to begin repaying your loan immediately, make interest only payments while you are in school, or defer all of your payments while you are in school. Any interest you defer will be capitalized (added to your balance) when you begin making your loan payments.
12) What should I look for in a private loan?
Interest rates and fees can vary significantly between lenders. Many lenders also offer borrower benefits that can reduce the principal or interest on a private loan. Be sure to look carefully at the terms and conditions when applying for a loan.
1LIBOR stands for London Interbank Offered Rate. The one-month LIBOR is the Current Index, as published in the "Money Rates" section of the Wall Street Journal (Eastern Edition). Your variable interest rate and Annual Percentage Rate (APR) may be higher depending upon your credit history and will increase or decrease if the one-month LIBOR index changes. Your variable interest rate is calculated by adding the current one-month LIBOR index (captured on the 25th day of each month, or the next business day thereafter, of the month immediately preceding such calendar month and rounded up to the nearest 1/8th of one percent) to your margin. The current one-month LIBOR index was 0.25% on 11/1/09.
2This APR example assumes a $10,000 graduate, cosigned loan disbursed over two transactions with a deferment period of 45 months upon initial disbursement and a six month grace period upon graduation, a monthly principal and interest payment of $59.13 (there is a minimum monthly payment of $50), a 25 year repayment term (300 months), and a 3.50% margin. Margins can range from 3.50% to 10.75% depending if the loan is cosigned and upon your or your cosigner's credit history.
3This APR example assumes a $10,000 undergraduate, cosigned loan disbursed over two transactions with a deferment period of 45 months upon initial disbursement and a six month grace period upon graduation, a monthly principal and interest payment of $63.69 (there is a minimum monthly payment of $50), a 25 year repayment term (300 months), and a 4.00% margin. Margins can range from 4.00% to 11.25% depending if the loan is co-signed and upon your or your cosigner's credit history