Managing Debt: LightStream Helps Consumers Understand Refinancing

1.    Set the right debt management goals. Make sure you are using debt refinancing to improve your financial well-being. It can be a solid financial strategy if you're looking to minimize interest costs, you have promotional or variable loan rates that are coming to an end, or you can save money by consolidating multiple debts into one payment at a lower rate. However, debt refinancing is not recommended to stretch monthly budgets. Extending payments over longer periods may be a more expensive way to pay off debt, and can be looked at negatively by lenders.            

2.    Learn what can be refinanced, as well as the time and effort needed to do it. Many people believe refinancing is only for credit cards. However, you can refinance many other kinds of loans such as those for a car, boat, motorcycle, RV, tuition, or even a timeshare. The process and time involved to secure refinancing varies. Some lenders require branch visits and/or paperwork, while others can be handled completely online.

3.    Evaluate your current debt for opportunities to save. Obtain a free copy of your credit report through a credit bureau or online site. If your credit has improved since you originally financed, you may be able to refinance at a lower interest rate. Look at the amounts you owe and determine where you are paying the highest interest rates, which loans have the longest payment terms, and whether you have several debts that could be combined. Debts that are paid over a shorter term at a lower rate quickly yield savings.

4.    Review different refinancing strategies.

• Balance Transfer: This can be a smart option if you are transferring credit card debt to a different card with a lower rate, or from a card with an expiring low introductory promotional interest rate to a new low rate card. Another way this can work is if you are consolidating debt from several cards onto one with a lower rate.
• Personal Loan: People with good credit may be able to obtain debt consolidation financing at a lower interest rate and/or shorter term than what they are currently paying.
• Home Equity Line of Credit (HELOC): Debts can be refinanced through a loan against the value of your home. Consult your tax advisor to determine whether the interest you'll pay is tax deductible.

5.    Shop interest rates and costs. Many companies offer debt refinancing, so it is important to shop around for the lowest rates. For balance transfers, an average three percent fee is typically charged. For example, a $20,000 transfer will cost an additional $600. Make sure the overall interest savings outweighs the cost and know that not every lender charges fees or points for a personal loan.

"Refinancing is often a smart solution for consumers attempting to lower their monthly payments and reduce the total amount spent on loan repayment," said Todd Nelson, business development officer at LightStream.  "With the right research and goals, debt refinancing can enhance financial freedom, while still managing to keep savings or high-performing assets intact."

For many, using debt tools such as credit cards and loans can be a solid part of a financial plan, especially when living within your means and regularly reviewing interest rates and personal credit history to recognize savings opportunities.

"I have a thing for cars and motorcycles," says Rick Huber, a quality engineer from Pennsylvania. "I also have a child, so managing debt and interest expenses are important. When my credit improved over time, I was able to refinance two cars through LightStream, saving thousands of dollars in interest. Later, I consolidated the debt on two high-rate credit cards. LightStream is a great tool because in the minutes it took me to refinance my loans, I saved thousands of dollars and years of carrying costs. I like reducing my interest costs and knowing that in three years my credit card will be paid off."

For more information on debt refinancing, visit http://www.lightstream.com/debt_consolidation.

About LightStream, a division of SunTrust Bank
LightStream is a national online lending division of SunTrust Bank, providing good-credit customers with competitive rates and an outstanding customer experience. It allows consumers with good credit to borrow between $5,000 and $100,000 with no fees at a fixed rate. Refinancing can be obtained not only for credit card debt, but also for auto and many other types of loans. LightStream's proprietary technology offers consumers a virtually paperless loan application, underwriting, funding and servicing experience. 

About SunTrust Banks, Inc.   
SunTrust Banks, Inc. (NYSE: STI) is a purpose-driven company dedicated to Lighting the Way to Financial Well-Being for the people, businesses and communities it serves. Headquartered in Atlanta, the company has three business segments: Wholesale Banking, Consumer Banking and Private Wealth Management, and Mortgage. Its flagship subsidiary, SunTrust Bank, operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states, along with 24-hour digital access. Certain business lines serve consumer, commercial, corporate and institutional clients nationally. As of December 31, 2015, SunTrust had total assets of $191 billion and total deposits of $150 billion. The company provides deposit, credit, trust, investment, mortgage, asset management, securities brokerage, and capital market services. SunTrust leads onUp, a national movement inspiring Americans to build financial confidence. Join the movement at onUp.com.

© 2016 SunTrust Banks, Inc. All rights reserved. SunTrust Bank is an Equal Housing Lender. LightStream is a federally registered service mark of SunTrust Banks, Inc. SunTrust is a federally registered service mark of SunTrust Banks, Inc. All other trademarks are the property of their respective owners. Lending services provided by SunTrust Bank, member FDIC.

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SOURCE SunTrust Banks, Inc.

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