Are you a parent looking for 8 Best Parent PLUS Loan Refinance Lenders in 2024?….Then this blog post is for you. Parent PLUS loans are a type of federal student loan that allows parents to borrow money on behalf of their child who is attending college or a career school. These loans can be used to cover the cost of tuition, room and board, books, and other educational expenses. They are different from other types of federal student loans as they require a credit check and have a higher interest rate.
While many parents choose to take out Parent PLUS loans to help their children pay for college, it can become a financial burden due to the high interest rates and long repayment terms. However, there is an option available for parents looking to lower their monthly payments and save money in the long run refinancing.
Refinancing Parent PLUS loans means taking out a new loan with a private lender to pay off the existing loan. This new loan comes with potentially lower interest rates and more favorable repayment terms, making it an attractive option for many parents.
But before deciding whether refinancing is the right choice for you, it’s important to understand how Parent PLUS loans work and what factors should be considered when choosing a lender for refinancing.
Understand that only biological or adoptive parents are eligible for Parent PLUS loans not grandparents or legal guardians. Also, unlike other types of federal student loans, there is no limit on how much you can borrow through this program as long as it doesn’t exceed the total cost of attendance.
Secondly, it’s crucial to know that once you take out a Parent PLUS loan, your child cannot transfer the responsibility onto themselves in the future. This means that even if your child becomes financially independent after graduation, you will still be responsible for repaying the loan.
Why Refinance a Parent PLUS Loan?
- Lower Interest Rates
- Reduce Monthly Payments
- Consolidate Multiple Loans
- Release Co-Signer
- Access Better Loan Terms
- Pay Off Loan Sooner
- Switch to a Fixed Interest Rate
- Take Advantage of Benefits
Factors to Consider When Choosing a Refinance Lender
1. Interest Rates: The interest rate you receive on your refinance loan will greatly impact how much you end up paying over time. It’s important to compare rates from different lenders and choose the one that offers you the lowest rate possible. A lower interest rate means less money spent on interest and more savings for you.
2. Fees: In addition to interest rates, be sure to also consider any fees associated with refinancing your Parent PLUS loans. These may include application fees, origination fees, or prepayment penalties. Some lenders may advertise low-interest rates but make up for it with high fees, so be sure to read the fine print before making a decision.
3. Repayment Terms: Different lenders may offer different repayment terms, such as fixed or variable interest rates and various loan lengths. It’s important to understand these options and choose the one that best fits your financial goals and budget.
4. Customer Service: Refinancing your loans is a big financial decision, so it’s important to work with a lender who has excellent customer service. Look for reviews from other borrowers or ask friends and family for recommendations before choosing a lender.
5. Eligibility Requirements: Each lender will have their own eligibility requirements for refinancing Parent PLUS loans, so it’s important to find out if you meet their criteria before applying. Some lenders may require a minimum credit score or income level while others may have stricter requirements.
6. Loan Benefits: Some lenders may offer additional benefits such as flexible repayment options, cosigner release after a certain number of payments, or even discounts for automatic payments. Be sure to research these potential benefits and factor them into your decision-making process.
7. Refinance Limits: Some lenders may have limits on the amount of Parent PLUS loans you can refinance, so be sure to check if they can accommodate the total amount you need to refinance.
8. Overall Reputation: It’s important to work with a reputable lender that has a track record of providing excellent service to their borrowers. Research the company online and read reviews from other borrowers to get a sense of their reputation.
9. Eligible Loan Types: Not all lenders may offer refinancing for Parent PLUS loans, so be sure to confirm that they offer this option before applying.
10. Additional Resources: Some lenders may offer resources or tools to help you better manage your student loan debt, such as calculators or education on refinancing options. These additional resources can be helpful in making informed decisions about your loans.
Top 8 Parent PLUS Loan Refinance Lenders for 2024
1. Earnest
Earnest takes a slightly different approach when it comes to refinancing Parent PLUS Loans by focusing on individualized underwriting rather than credit scores alone when determining interest rates and eligibility.
Their flexible loan terms allow borrowers to choose from various payment plans such as bi-weekly or monthly payments, and even skip a payment once per year. Interest rates start at 2.74% for variable rate loans and 3.25% for fixed rate loans (with autopay discount).
2. Laurel Road
Laurel Road is another great option for parents looking to refinance their Parent PLUS Loans with competitive interest rates starting at 2.54% for variable rate loans and 3.20% for fixed rate loans (with autopay discount). They also offer a unique feature called “Pause Your Payment” where borrowers can pause payments for up to three months if they experience financial difficulty.
One standout perk of refinancing with Laurel Road is their relationship discounts – borrowers can receive an additional 0.25% off their interest rate by opening a checking account with them.
Citizens Bank offers a wide range of refinancing options for parents, including variable and fixed rate loans with terms ranging from 5 to 20 years. They also offer a loyalty discount of up to 0.50% off their interest rates for existing customers who refinance with them.
One notable feature of Citizens Bank is their cosigner release program, which allows borrowers to apply to have their cosigner released after making 36 on-time payments.
4. LendKey
LendKey is a great option for parents looking for competitive interest rates and flexible repayment options. They work with a network of community banks and credit unions to offer loans at lower interest rates than traditional lenders.
Additionally, LendKey offers a unique “Death and Disability Discharge” program where borrowers can have their loans forgiven in the event of death or permanent disability.
5. College Ave
College Ave is known for its streamlined application process and fast funding times, making it an attractive option for parents looking to quickly refinance their Parent PLUS Loans. Interest rates start at 2.74% for variable rate loans and 3.24% for fixed rate loans (with autopay discount).
One standout feature of College Ave is their ability to refinance loans in the name of the student, rather than the parent, if the student is able to take on the loan themselves.
6. Education Loan Finance (ELFI)
ELFI offers competitive interest rates starting at 2.39% for variable rate loans and 3.19% for fixed rate loans (with autopay discount). They also offer a unique feature called “Unemployment Protection” where borrowers can temporarily pause their payments if they lose their job or experience financial hardship.
In addition to traditional refinancing options, ELFI also offers a Parent PLUS Refinance program specifically designed for parents looking to refinance their child’s education debt.
7. PenFed Credit Union
PenFed Credit Union offers a variety of refinancing options for parents, including both fixed and variable rate loans with terms ranging from 5 to 15 years. They also have special programs for military members and their families, including lower interest rates and additional benefits.
One notable feature of PenFed is their ability to refinance up to $150,000 in Parent PLUS Loans, which may be helpful for parents with higher loan amounts.
8. RISLA
RISLA stands out as a top option for parents looking to refinance their Parent PLUS Loans due to their low interest rates and borrower-friendly terms. Interest rates start at 2.99% for fixed rate loans (with autopay discount), and they offer a unique “Cosigner Release” program where borrowers can apply to have their cosigner released after making 24 on-time payments.
Additionally, RISLA offers a “Hardship Program” where borrowers can temporarily pause their payments if they experience financial difficulty.