Refinancing Parent Plus Loans

Refinancing parent plus loan can help you save a good amount by lowering your interest rate. It can also get your hook off for the loan completely by transferring the debt. Learn more on the parent plus refinancing, best parent plus loan refinance lenders and much more.

Updated by Priya shah on 29th January 2020

Student loan is a type of loan that is designed to help students pay for their post-secondary education and the related fees, like tuition fees, books, living expenses and much more. It varies from other kinds of loans, in fact, the interest rate is substantially lower and the repayment schedule may be deferred while the students are still in school.

Being a parent and supporting your child can be very expensive, and some parents take out loans to help pay for educational costs. As a parent, you might have taken out parent PLUS loans to help your children with education. But as you get closer to retirement age and managing multiple financial priorities, you may start wondering about the multiple ways to reduce your burden of repayment.

Refinancing loans can help you save a good amount by lowering your interest rate. That starts at about half of what the government charges for PLUS loans. Refinancing parent plus loan can also get you off the hook for the loan completely by affordable parent plus loan interest rate transferring the debt to your child. Parent plus loans can offer borrowers a variety of benefits, that could easier the applicants to qualify for the parent plus loans than other types of loans with the same or better parent plus loan interest rate. 

However, if you have a strong/ good credit history, and low low debt relative to your income you may be eligible for a lower interest rate if you are refinancing a federal parent PLUS loan with a private student loan. As the interest rate of your depends on your credit score.

Table of content

8 best parent PLUS loan refinance lenders of January 2020

Best refinance company:

Lenders

Best for

Fixed APR

Variable APR

Ratings

PenFed student loan refinance

Transferring or refinancing parent PLUS loans

3.48% to 6.03%

2.32% to 7.06%

4.5/5

SoFi student loan refinance

Transferring a PLUS loan to the child

3.46% to 7.36%

2.31% to 7.36%

5/5

CommonBond student loan refinance

Transferring a PLUS loan to the child

3.21% to 6.45%

1.81% to 6.29%

5/5

Education loan Finance

Transferring a PLUS loan to the child

3.14% to 6.69%

2.39% to 6.01%

5/5

Laurel Road student loan refinance

Transferring PLUS loan to the child

3.50% to 7.02%

1.99% to 6.65%

5/5

Earnest student loan refinance

Refinancing a parent PLUS loan

3.20% to 6.99%

1.99% to 6.89%

5/5

Citizens one student loan refinance

Refinancing a parent PLUS loan

3.45% to 9.02%

2.29% to 9.02%

4.5/5

Navy Federal student loan refinance

Refinancing a parent PLUS loan

4.29% to 12.46%

4.96% to 12.84%

4/5

 If you follow the table you will get to know that SOFI is one of the highest-rated lenders with most affordable refinance rates. SoFi loans started with the aim to provide finance to college students at affordable rates. At the start, they were backed by 40 alumni with a $2 million pilot program at Stanford. In May 2019, SoFi closed $500 million in a single funding round.

SoFi student loans offer Private Undergraduate Loans to students who are enrolled at least half-time in an accredited Title IV school. All applications are processed online with fast and simple steps. Borrowers with a low credit score may opt to add cosigners. This may increase the chances of approval and lower the interest rate of the loan at the same time.

One of the best features of SoFi Graduate Loans is the absence of a loan limit. The amount of the loan covers 100% of the certified cost of attendance. However, there is a minimum amount of loan that can be taken. This amount may vary from state to state depending on the individual laws of each state. 

SoFi loans offer Student Loan Refinancing to all eligible candidates for their Private Student Loans, Federal Student Loans or both kinds of loans at the same time. Sofi student loans also provide a special program for Medical Loan Refinancing and Parent PLUS Loan Refinancing. Among the best refinance company Sofi loan refinances can be a better option to go with.

When you refinance your loans under SoFi, you have a chance to combine all your eligible loans into one loan with a much lower interest rate, better loan terms and several benefits such as career coaching, financial advisors, etc..

SoFi Refinancing Loans are also eligible for the Unemployment Protection Program. We have an in-depth review of the SoFi Student Loan Refinancing in another article. Please refer to it if you wish to know more.


Should I refinance parent PLUS loans?

Refinancing parent plus loan brings a number of benefits that include lowering your interest, lowering your monthly payments and get you best refinance rates.

Depending on the loan term you choose you can simultaneously be able to do both at the same time. Even if your monthly payment doesn’t decrease by lowering the interest rates you still can save money on interest charges over the lifetime of your loan. Parent PLUS loans carried a 7.08% interest rate for the 2019-2020 academic year, which is also considered as the higher end of the federal student loans. That can make it difficult to get ahead on principal payments.

You should refinance parent PLUS loans if you have a credit score of 600 or higher. And are comfortable giving up federal loan benefits also can qualify for best refinance lower rate.

Refinancing your loan doesn’t make sense if you need an income-driven repayment plan to qualify for public service loan forgiveness or want other federal loan entitlements like loan discharge if you or the child you borrowed the loan for dies.


Worried about your college tuition? Find the best student loans for you


Alternatives to parent PLUS loan refinancing

You might not be sure if refinancing your parent plus loan is a good idea or not. Or it may also be possible that you might have trouble qualifying for a lower rate than you are currently paying. But what if it’s not working out,  there are various alternatives to consider.

As of comparing the federal repayment plans, it is good to place to start if you are having trouble making payments you can also explore other options for immediate relief like

  • income-contingent repayment(ICR) Plan

  • Loan forgiveness

  • Student loan repayment assistance


Benefits of refinancing parent PLUS loans

Refinancing parent PLUS loans can stand to save money on interest. Also can take advantage of the unique benefits offered by some lenders like unemployment protection, career services, and networking events to save more money on interest. There are many benefits to refinancing parent PLUS loans, like:

  • Your child may be benefitted from a lower interest rate on the new loan.

  • The parent would be released from the original loan.

  • The child can make their own credit score by making on-time payments.


Limitations of refinancing parent PLUS loans

There are certain things that need to be known to every individual who is deciding to refinance your parent plus loans. There are certain downwards you must be aware of that includes:

  • Refinancing with private lenders can lead you to lose federal student loan benefits, like access to income-driven repayment options and public service loan forgiveness(PSLF).

  • The legal ability may be transferred to the child, as the parent plus loan will be paid off, and your child will now have to repay the new loan.

  • The process is not reversible.


Looking to refinance your student loans? Choose from our list of best companies to refinance your student loans


How we rank parent PLUS refinance companies

Here are some factors that can be considered in the ranking of parent PLUS refinancing:

The highest and lowest interest rate

Most of the lenders do advertise an interest rate range for fixed and variable-rate loans. The highest and lowest possible rates are compared to the average rates for parents plus refinancing. And the highest score is given to the lender whose rates are below the average.

Origination and application fees

None of the lenders charge application and origination fees since they all got top marks.

Maximum loan amount

As the lenders earn top marks they let you refinance up to $500,000 which is higher than most people's loan amount and extra credit is also added if they don’t have pre-set maximum.

Maximum repayment terms

The repayment term is the amount of time that is allotted to pay off your loan. A longer-term loan can end you paying off a higher rate of interest, however, a longer-term can be beneficial if you are wishing to lower your monthly payments.

Repayment term choice

Being able to choose several loan terms are more likely that you will find the best fit that comes to monthly payments and interest rates. The lenders are earning top marks for offering five loan terms, with points taken away or extra credit awarded to the lenders that offer fewer or more terms. It is always to be well aware of all your student loan repayment options so that you can take control of your repayment phase.

Cosigner release option

A cosigner with good credit can definitely help you qualify for refinancing and also getting the loan at a lower rate of interest. Lenders may release a cosigner and keep your loan terms if you make a series of on-time payments and your creditworthiness also improves.

Autopay discount

Most of the parent PLUS refinance lenders that we compared got top marks for offering a 0.25% interest rate discount to the borrower who enrolls autopay.