How to Refinance Parent PLUS Loans | Parent PLUS Loan Repayment

Refinance Parent PLUS Loans

How To Refinance Parent PLUS Loans

Parent PLUS Refinance can help you alleviate the financial burden of Parent PLUS Loan repayment.

When it comes to Parent PLUS Loan repayment options, there are two primary approaches to consider:

  1. Refinance Parent PLUS Loans in your name
  2. Refinance Parent PLUS Loans in your child’s name

Compare Best Refinance Parent PLUS Loans For 2018

Lender
Rates (APR)
Minimum Credit Score

Overview

Variable Rates:2.46% - 6.97%
Fixed Rates:3.89%- 7.89%
Average Savings:-
Minimum Credit Score:None
Minimum Income:None

Details

Eligible Loans:Private & federal
Minimum Loan Amount:$5,000
Loan Terms:5 - 20
Borrower Residency:All states, except AL, KY, MS, VT
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:2.47% - 6.99%
Fixed Rates:3.90% - 7.98%
Average Savings:-
Minimum Credit Score:Good or Excellent
Minimum Income:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:2.96% - 7.70%
Fixed Rates:3.75% - 7.03%
Average Savings:-
Minimum Credit Score:700 (670 with a co-signer)
Minimum Income:$42,000 solo or couple; $25,000 with a co-signer

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$7,500
Loan Terms:5, 8, 12, 15
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Overview

Variable Rates:3.05% - 6.47%
Fixed Rates:3.50% - 7.02%
Average Savings:$20,200
Minimum Credit Score:660
Minimum Income:None

Details

Eligible Loans:Private & Federal
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20
Borrower Residency:All states
Unemployment Protection:Yes
Co-signer Option:Yes

Advertiser Disclosure


What are Parent PLUS Loans?

Parent PLUS Loans are loans borrowed by parents on behalf of a dependent undergraduate student. Parent PLUS Loans are a type of PLUS Loan, which are federal loans that graduate students or parents of dependent undergraduate students can borrow to pay for college or a career school.

With Parent PLUS Loans, the parent is the borrower, not the student. The lender is the U.S. Department of Education. With Parent PLUS Loans, a parent can borrow funds up to the cost of attendance, less any financial assistance received.

Why should you refinance Parent PLUS Loans?

If you are currently involved in Parent PLUS Loan repayment, there is a good chance that you are overpaying.

For the 2017-2018 academic year, the interest rate on a Parent PLUS Loan is 7%, and the one-time fee is 4.264% of the amount borrowed.

For parents who borrowed a Parent PLUS Loan from 2006-2013, the interest rate was even higher – at 7.9%.

Today, based on your credit profile, you may be able to refinance Parent PLUS Loans for less than 3%.

Parent PLUS Loans also interfere with your retirement and can be a financial burden for parents.

Parents with Parent PLUS Loans may have to manage their own financial situation. This may include limited retirement income, a mortgage, Parent PLUS Loans for other children, their own student loans and other life expenses.

Therefore, a logical next step is to refinance Parent PLUS Loans to save money.

Option #1: Refinance Parent PLUS Loans in your name

When you consider the Parent PLUS Loan repayment options, your first consideration should be to refinance Parent PLUS Loans.

With Parent PLUS Refinance, you can refinance Parent PLUS Loans with a private lender.

When you refinance Parent PLUS Loans, the process is similar to student loan refinancing.

You obtain a new loan at a lower interest rate, and then use the proceeds for Parent PLUS Loan repayment. With the lower interest rate, you can lower your monthly payment, save interest costs and accelerate Parent PLUS Loan repayment.

With Parent PLUS refinance, you remain the borrower, but the federal government is no longer the lender. Instead, a private lender becomes the lender for Parent PLUS Loan repayment.

When you apply for Parent PLUS Loan repayment options, lenders will evaluate several factors for Parent PLUS refinance, which may include your income, employment, monthly cash flow, other debt obligations and debt-to-income ratio. Overall, Parent PLUS refinance lenders want to refinance borrowers who are financially responsible and can repay their loan.

Another benefit of Parent PLUS refinance is that your child can make voluntary payments on the loan to help with Parent PLUS Loan repayment.

Option #2: Refinance Parent PLUS Loans In Your Child’s Name

While evaluating Parent PLUS Loan repayment options, another option is to refinance Parent PLUS Loans in your child’s name.

As you may know, the federal government does not refinance Parent PLUS Loans or permit you to transfer Parent PLUS Loans to your child.

The good news is that you can use Parent PLUS refinance to transfer your Parent PLUS Loans to your child.

These two Parent PLUS Loan repayment options are similar, but the difference here is that your child graduate would become financially responsible for the loan.The lender would evaluate the child graduate’s underlying financial information and credit profile. Through this Parent PLUS refinance strategy, the child graduate becomes the sole borrower.

This can be a great Parent PLUS Loan repayment option, particularly for graduates who are employed and have developed a credit history. The stronger their financial profile, the greater likelihood of a lower interest rate, which means you save money.

This Parent PLUS refinance strategy also can be beneficial for situations in which your child borrower has a stronger credit profile that you do. That would be another circumstance in which it may make more sense for the child borrower to refinance Parent PLUS Loans in his or her name.

When it comes to Parent PLUS refinance, the general rule still applies: the stronger the financial profile, the lower the interest rate.

What are the best lenders for Parent PLUS Refinance?

When it comes to Parent PLUS refinance options, you can refinance Parent PLUS Loans with multiple, high quality lenders.

Some of the leading private student lenders that can refinance Parent PLUS Loans include Earnest, Elfi, SoFi, Purefy and Laurel Road.

What are the key benefits of Parent PLUS Refinance?

Parent PLUS Refinance comes with many benefits.

1. Interest Savings
With Parent PLUS refinance, you can potentially save thousands of dollars on your Parent PLUS Loans.

2. Soft Credit Check
When you refinance Parent PLUS Loans, you can check your new interest rate before you apply. This is a major benefit that does not impact your credit score to ensure that Parent PLUS refinance makes financial sense for you.

3. No Origination or Prepayment Fees
There are no origination fees or prepayment fees with Parent PLUS refinance. That means that more money can be used for Parent PLUS Loan repayment.

4. Child Can Build Credit
If you transfer your Parent PLUS Loans to your child through Parent PLUS refinance, your child can build credit through Parent PLUS Loan repayment. The more on-time payment your child makes, the more they can build credit and raise their credit score.

What are the other considerations for Parent PLUS Refinance?

When considering Parent PLUS Loan repayment options,remember that Parent PLUS refinance means you will no longer have federal loans. That means that the federal loan benefits such as federal loan repayment programs, public service loan forgiveness, deferral and forbearance will not be available through the federal government.

How much money can you save with Parent PLUS Refinance?

You can use Make Lemonade’s refinance student loans calculator to see how much money you can save through Parent PLUS Loan refinance.

Let’s assume that you have $50,000 of Parent PLUS Loans at a 7% interest rate, and let’s assume that you can refinance Parent PLUS Loans with a 3% interest rate.

With Parent PLUS refinance, in this example, you would save $11,729 and lower your monthly payment by $98 per month.

Laurel Road
5 (100%) 2 votes
Refinance Parent PLUS Loans
5 (100%) 75 votes

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