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 3.66% APR2. The Academic Answer rate for undergraduate students starts as low as one-month LIBOR + 4.00%, currently a 4.25% interest rate and 4.13% 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) 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.
12) How many disbursements can be made on the Academic Answer Loan?
Up to four disbursements can be made for a single Academic Answer Loan.
13) 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.
14) Does SunTrust offer any discounts?
Each Academic Answer Loan is eligible for a $300 principal reduction upon graduation. 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. To receive the principal reduction benefit, proof of graduation must be submitted within 90 days of graduation. A copy of your diploma or final transcript is acceptable proof.
15) 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.
16) Why do I need to complete an Applicant (Borrower) Self-Certification Form?
17) My school suggested I apply for my loan earlier this year. Why?
In addition to the Applicant (Borrower) Self-Certification Form, new regulations governing private education loans require three new disclosure documents be provided to borrowers during the application process. Borrowers must actively take steps to accept the loan terms, which may result in a longer application process.
You can expedite the process by:
Obtaining your cost of attendance and estimated financial aid—this is required in order to complete the Applicant (Borrower) Self-Certification Form during the online application process for an Academic Answer loan.
Promptly providing required documentation, if applicable
Accepting your loan quickly upon receipt of the Approval Disclosure. All applicants, including cosigners (if applicable), must complete this step in order to receive the Final Disclosure and loan funds.
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
Students must also provide total cost of attendance and estimated financial assistance.
The student's cost of attendance (COA) and estimated financial assistance (EFA) are used to complete the Applicant Self-Certification during the online application process for the Academic Answer loan. This certification is required for all private student loans, regardless of the lender you choose. If you do not have this information available, you may need to contact your school to obtain your COA and EFA before starting the Academic Answer application. The Applicant Self-Certification is not required for cosigners.
20) 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.
21) How do I cancel my loan if I am unhappy with the final terms?
A borrower and cosigner, if applicable, must accept the Approval Disclosure by phone or fax within 30 calendar days of receipt. If no action is taken within the 30 calendar day timeframe, the loan is automatically cancelled. If the borrower accepts the Approval Disclosure, a Final Disclosure will be presented to the borrower and cosigner, if applicable. Either the borrower or cosigner has the right to cancel (e.g.rescind) the loan within three business days of receiving the Final Disclosure. At this point, loan cancellations must be submitted in writing by fax.
Loan cancellation is possible after your funds have been disbursed. Either the school, the student borrower, or the cosigner must return the funds within 30 days of the disbursement date to cancel the loan and avoid any interest or other charges. 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) Are there any fees?
Based on your credit history, there may be fees associated with origination, disbursement or repayment.
6) 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.
7) 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.
8) Who offers private loans?
Banks, private lenders and other financial institutions offer private student loans.
9) 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.
10) 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 3/1/10.
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 $83.64 (there is a minimum monthly payment of $50), a 15 year repayment term (180 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 $88.03 (there is a minimum monthly payment of $50), a 15 year repayment term (180 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