Private student loans in more detail.
Private student loans — also called alternative loans — can help you fill the gap when federal loans, scholarships, grants and work-study programs don't quite meet your financial need. And borrowing money to finance your higher education can be a wise investment; however please make sure you fully understand the nuances of a private student loan.
What you need to know before taking out a private student loan.
- You should always borrow from the federal student loan programs before you apply for private student loans. Federal student loans, like the Stafford and PLUS loan, usually offer lower interest rates and an overall lower cost of borrowing. To see the differences between private and federal student loans view our loan comparison chart.
- Private student loans are offered by private lenders, like SunTrust. Because these private supplemental loans aren't guaranteed by the federal government, you don't need to fill out any federal forms to apply.
- Private student loans can be used for all education-related expenses. You can borrow up to the cost of attendance at your school, but we recommend that you only borrow what you need in order to limit your amount of debt.
- Interest rates for private student loans are usually based on an index (such as Prime or LIBOR) plus a margin, depending upon your credit history.
- Private student loans typically allow undergraduate students to apply for a loan with a cosigner; such as your parents, which can increase your chance of getting approved and obtaining a better interest rate.
- Your monthly repayment obligation will be based on the amount borrowed, the interest rate, the origination or repayment fee (if applicable) and the length of repayment.
If you would like to discover the benefits that an Academic Answer loan from SunTrust can offer you, simply choose to learn more today. Or, for more information about private loans, see our private loan brochure.