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 15th October 2020

A student loan is a type of loan that is designed to help students pay for their post-secondary education and their respective 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 for 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 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 depends on your credit score.

Table of content

8 best Parent PLUS loan refinance lenders

Below is a list of private student loan lenders who refinance Parent PLUS loans. 

Lenders

                        Best for


    Fixed APR

    Variable APR

PenFed 

Transferring or refinancing parent PLUS loans

3.48% to 6.03%

2.32% to 7.06%

SoFi 

Transferring a PLUS loan to the child

3.46% to 7.36%

2.31% to 7.36%

CommonBond  

Transferring a PLUS loan to the child

3.21% to 6.45%

1.81% to 6.29%

ELFI

Transferring a PLUS loan to the child

3.14% to 6.69%

2.39% to 6.01%

Laurel Road 


Transferring PLUS loan to the child

3.50% to 7.02%

1.99% to 6.65%

Earnest 

Refinancing a parent PLUS loan

3.20% to 6.99%

1.99% to 6.89%

Citizens one 

Refinancing a parent PLUS loan

3.45% to 9.02%

2.29% to 9.02%

Navy Federal 

Refinancing a parent PLUS loan

4.29% to 12.46%

4.96% to 12.84%

If you follow the table you will get to know that SoFi is one of the highest-rated lenders with the 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.

Learn more about SoFi student loan refinancing review

They act like credit unions who are not-for-profit organizations providing services to specific communities. Penfed not only provides refinancing for multiple federal student loans but also refinancing can take over a spouse's loan or combine married couples loans into a single loan. 

Learn more about PenFed Student Loan Refinance Program

CommonBond Student Loan Refinance was established by founders who were students themselves. The minimum loan amount that they refinance for student loans is $5000. But cosigner release is not offered by them.
Learn more about CommonBond Student Loan Refinance


ELFI is a recent company in the student loan market. They are proven as the one amongst the best refinancing options. They provide refinancing for Undergraduate, Graduate, MBA Loans, Law and dental school loan,s and parent loans.

Learn more about Education Loan Finance (ELFI) Reviews

Laurel Road provides the best interest rate offering, forbearance, grace periods, and extra discounts. They also provide cosigner release.
Learn more about Laurel Road Student Loan Refinancing Review

Earnest student loans provide their service to residents in certain states. They have prequalification and grace periods. And provide good customer service.

Learn more about Earnest Student Loan Reviews

Established in the year 1871, their branches are spread throughout New England, Mid Atlantic, and the Midwest. They have good features like Multi-year Approval, Flexible Payment Options to look forward to.
Learn more about Citizens Bank Student Loan Refinancing


Should I refinance parent PLUS loans?

Refinancing a parent PLUS loan brings several benefits that include lowering your interest, lowering your monthly payments, and get your best refinance rates.

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.

  • income-contingent repayment(ICR) Plan

  • Loan forgiveness

  • Student loan repayment assistance

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 mentioned above.


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

Certain things 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

Weigh all your options before you conclude to refinance.


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


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 a 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.