Got a private student loan through SunTrust? Did you know you can refinance that loan—and potentially score a lower interest rate? You absolutely can.
If you refinance your SunTrust loan and you've already graduated, you have to pick a new lender. That's because SunTrust doesn't offer refinancing, unless you're applying for a new student loan with Suntrust and you want to roll previous student loan balances into your new loan.
What is refinancing—and why would you want to do it?
Refinancing means replacing an existing loan with a new loan, through a new lender. People do this all the time with other types of loans—like mortgages—to take advantage of lower interest rates. You can do it with your student loans, too.
There are several reasons why you might want to consider refinancing.
To get a lower interest rate and save money
If you took out your original SunTrust loan while you were in college, your credit score may have improved since then—which means you might qualify for a better interest rate now.
This strategy works—our data shows people who refinance save around $16,183 on average. Especially if you’ve kept your credit score sterling, it’s worth it to see if other lenders will give you a lower rate.
To replace multiple loans with one loan
When you refinance, your new lender pays off all the loans you’re refinancing—and issues you a new loan. You now make payments only to one lender, not many. This makes your loan easier to track and manage.
To change your loan payment term
Maybe you want to increase the length of your payment period to reduce your monthly payment—or pay off your loan faster to save on interest.
Either way, refinancing is a surefire way you can change the payment terms on a private student loan.
See also: Everything You Need to Know About Student Loan Refinancing
How do I find a new lender to refinance my loan?
If you're unable to refinance with SunTrust, some shopping around is in order.
For most people, the first criteria is how low the new interest-rate offer is. You can get a ballpark idea by using a refinancing calculator.
Once you’ve narrowed your search, you can apply with several different lenders. They’ll ask you some questions about your financial life, do a soft pull on your credit—this won’t show up on your score—and make you an initial offer.
From there, you can pick the offer you like best, and the lender will handle all the paperwork of paying off your old loans and issuing a new one.
What other criteria can I use to pick a lender?
Apart from the interest rate, you might want to consider:
Customer service
What are people saying about this lender’s services? Look at Yelp reviews and ask your friends.
Horror stories are definitely out there, but some lenders do have a good reputation for customer service. (CommonBond, for instance, has won awards for theirs).
Types of loans
Most lenders offer fixed- and variable-rate loans for various interest rate ranges. A few offer other options (for instance, CommonBond offers a hybrid fixed-and-variable-rate loan).
See also: Choosing a Fixed or Variable Interest Rate
Extra perks
Some lenders have a little something extra that makes them worth a second look.
For instance, SoFi offers coast-to-coast networking events, yoga, wine tastings, and entrepreneurial seed funding; CommonBond has a strong social promise angle; and LendKey will hook you up with over 13,000 local community banks and credit unions to score the lowest rate.
Refinancing can make a big difference in your financial life. You don’t have to stick with SunTrust or any of your other current lenders—you can hit the reset button and score a better interest rate.
Check out Refi Ready to see how much you could save.
