SunTrust Banks (STI) in Atlanta will offer a new loan program that allows borrowers to refinance their existing private student loans.
The SunTrust Bank Private Student Loan Consolidation Program gives approved borrowers the choice of a fixed- or variable-interest rate in addition to several repayment terms, according to First Marblehead (FMD), a third-party administrator of student lending activities for SunTrust. The program will begin accepting applications in early August.
The consolidation program uses First Marblehead’s Monogram platform, an integrated suite of design, implementation and credit risk management services for private-label education loan programs.
First Marblehead of Boston announced in April 2010 that it had agreed to process and manage SunTrust’s student loans. The partnership has been extended until 2015 and was expanded to increase the amount of lending they can do together.
The Mechanics of Student Loan Consolidation
The best place to start is to understand what exactly refinancing student loans means, and what is involved. Simply described, these agreements reduce the cost of repaying loans by buying out thoseloans and replacing them with one straightforward debt. It is a practical solution, and plays a key part in the students starting their post-college life without the weight of bankruptcy.
The complication that can be created by having numerous loans of difference amounts and differing terms, and at various interest rates, is removed through refinancing. In fact, multiple monthly repayments makes clearing college debts almost impossible. By replacing these loans with a college debt consolidation program, the overall debt is much more easily managed.
How Student Loan Consolidation Agreements Work
The idea behind refinancing student loans with bad credit, as with all refinancing agreements, is that a desperate financial situation can be dealt with in a proactive way. In the short-term, it eases the pressure, but in the long run, it steers the borrower away from bankruptcy – a ruling that no-one wants to be branded with.
The basic arrangement is that the individual loans taken out over a college career are bought out by one consolidation loan, making repaying college debts less complicated and more affordable. The savings are possible because each individual loan has different interest rates, which is a more expensive situation than repaying the debt with just one interest rate charged.