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Best Parent PLUS Loan Refinance
Parent PLUS loans have the highest interest rates of any federal student loan. When you consider the exorbitant cost of college and how long it takes to repay loans it’s no wonder many parents struggle financially. Thankfully, parent PLUS refinancing can help ease your burden.
Written by:Christi Gorbett
If you took out parent PLUS loans to help cover the cost of
your child’s education, you may be struggling with expensive monthly payments
that are eating into your budget. While these loans can certainly be
beneficial, they come with high interest rates that really add up over time.
The good news is well-qualified borrowers can refinance these loans at a lower
interest rate through a private lender. You can even have your child assume
responsibility for the loans through parent PLUS loan refinancing.
Our team of financial experts reviewed and ranked more than
30 online lenders to help you get funded. Here’s a look at the six best parent
PLUS loan refinance companies who made the top of our list.
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Top Picks for The Best Parent PLUS Loan Refinance
- Laurel Road - Best for Refinancing Before Graduation
- Earnest - Best for Repayment Flexibility
- SoFi - Best for High Loans Amounts
- PenFed - Best for Refinancing in the Student’s Name
- RISLA - Best for Income-Based Repayment
Best Parent PLUS Refinance Loans for 2023 - Full Overview
Based on the criteria outlined above, here are our experts’ choices for the best parent PLUS refinance loans:
Laurel Road - Best for Refinancing Before Graduation
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According to our experts, Laurel Road is one of the best parent PLUS loan refinance options available on the market. They’re an especially good fit for any parent who’s looking for a lender that allows PLUS loans to be refinanced in their child’s name (something that not every lender allows). Your child doesn’t even need to be a college graduate in order to qualify; as long as they meet the minimum credit score and income requirements, they can take over your loans prior to graduation.
Pros
Cons
Laurel Road offers parent PLUS loan refinancing in any amount from $5,000 on up; there is no maximum loan limit, which makes this an excellent option for borrowers who have taken out several loans to cover their childrens’ educational expenses. Interest rates are very reasonable, starting at 1.89% for variable rates and 3.49% for fixed rates.
Laurel Road also offers a lot of flexibility with their repayment terms—borrowers can choose practically any term between five and 20 years. A minimum credit score of 660 is necessary to apply, though a higher score of 700 is preferred.
The Bottom Line
Our experts chose Laurel Road as one of the best parent PLUS loan refinance companies because of their low interest rates, flexible repayment terms, and option to refinance loans in the child’s name. They also allow loan refinancing prior to graduation, making them the top choice for anyone whose child hasn’t finished their degree.
Try Laurel RoadRead more in the full Laurel Road review.
Earnest - Best for Repayment Flexibility
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Earnest is a great option for borrowers who want to refinance their parent PLUS loans while maintaining flexible repayment options. Though many lenders tend to set the rules regarding repayment, Earnest allows borrowers to set their own repayment term, the amount due each month, and the due date. Earnest also offers a range of options in the face of financial hardship, including the ability to skip one payment per year.
Pros
Cons
Through Earnest, borrowers can refinance their parent PLUS loans in any amount between $5,000 and $500,000. Variable interest rates of 1.74% to 7.99% are available with fixed rates ranging from 2.99% to 7.99% (including an autopay discount).
Earnest offers a considerable amount of flexibility in its repayment terms, allowing borrowers to choose any term length between five and 20 years. In addition, borrowers can choose their own monthly payment amount and due date—a unique option among lenders. Loans can only be refinanced in the parent’s name; switching loan responsibility to the child is not permitted. Borrowers are expected to have a credit score of 650 or higher to qualify.
The Bottom Line
Earnest is one of the top choices for parent PLUS refinancing due to their low interest rates and repayment flexibility. This is the perfect option for parents who want to refinance their loans but need to have control over how much they pay each month, when, and for how long. Parents whose children haven’t graduated yet or who want their children to take over the loans should look for other options.
Try EarnestRead more in the full Earnest review.
SoFi - Best for High Loans Amounts
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SoFi is an outstanding option for parents who want to refinance PLUS loans in their own name or their child’s name (with the child’s permission, of course). Because there’s no maximum borrowing limit, this is an especially attractive option for parents who have taken out several PLUS loans for two or more children or for multiple years of study. SoFi also offers a variety of forbearance options to help borrowers manage their finances whenever hardship strikes.
Pros
Cons
SoFi provides parent PLUS refinancing in any amount starting from $5,000 up to the total outstanding balance of the loan with no maximum borrowing limit. Fixed interest rates range from 3.49% to 7.99% with variable rates offered between 1.74% and 7.99%. SoFi offers a variety of repayment terms; borrowers can choose to pay back their loans in five, seven, ten, 15, or 20 years.
SoFi does allow borrowers to have their parent PLUS loans refinanced in their child’s name, as long as the child meets the minimum requirements. To qualify for refinancing, the student must have completed at least an associate’s or a bachelor’s degree; borrowers should also have a credit score of 650 or higher.
The Bottom Line
Our experts believe SoFi is one of the best parent PLUS refinance options because they offer refinancing in your child’s name with no maximum loan amount. SoFi also offers benefits that most other lenders don’t including career coaching, job search assistance, and entrepreneurship support. However, if your child did not complete their degree, you should apply with a different lender—your child must have at least an associate’s degree if you want to refinance with SoFi.
Try SoFiRead more in the full SoFi review.
PenFed - Best for Refinancing in the Student’s Name
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PenFed is an excellent option for college graduates or their parents who want to refinance parent PLUS loans. Unlike some lenders, PenFed allows graduates to take over the parent PLUS loans their parents took out when they were attending college. Keep in mind, the student does need to have completed at least a bachelor’s degree in order to qualify; they’ll also need to meet additional income and credit score requirements.
Pros
Cons
PenFed offers refinancing on parent PLUS loans up to $300,000; these loans are available to both parents and children who want to assume responsibility for the parent PLUS loans they benefited from. Interest rates for these loans are fixed and start at 5.49%. PenFed offers pre-qualification with a soft credit check; this means that potential borrowers can view which interest rates they qualify for without damaging their credit score.
Repayment terms are a bit more limited compared to other lenders; borrowers can choose to repay their loans in either five, eight, 12, or 15 years. (Ten and 20 year terms are not offered.) While it is possible for graduated students to take over their parents’ PLUS loans, they must meet the minimum requirements, which include a credit score of at least 670.
The Bottom Line
PenFed made our experts’ list of top parent PLUS refinancing companies because they offer students who’ve completed their bachelor’s degree the option of taking over loans from their parents (a feature some lenders don’t provide). If you’re looking for the lowest possible interest rates or you’d like to stretch out repayment for 20 years, you’ll need to check with other lenders.
Try PenFedRead more in the full PenFed review.
RISLA - Best for Income-Based Repayment
If you’re worried that parent PLUS refinance payments will bust your budget, then RISLA may be the best option for you. Unlike other lenders on this list, RISLA offers borrowers the chance to sign up for income-based repayment, limiting monthly payments to 15% of their discretionary income. However, RISLA may not be the best option if you’ve taken out loans for multiple children or school years; the maximum loan amount is capped at $250,000 so if you need to borrow more, you should apply with a different lender.
Pros
Cons
RISLA provides refinancing on parent PLUS loans in amounts between $7,500 and $250,000. RISLA doesn’t offer any variable interest rates, but their fixed APRs start at 4.29%, which is considerably lower than the average rate on parent PLUS loans. Repayment terms are somewhat limited; borrowers have the option to repay their loans in five, ten, or 15 years. (20 year terms are not offered.)
Refinancing through RISLA is only available to the original borrower—responsibility for these loans can’t be transferred to the student who benefited from them. However, RISLA does provide additional advantages that other lenders don’t have, such as capping monthly payments at 15% of your discretionary income. To qualify, borrowers should have a minimum annual income of $40,000 plus a 680 credit score.
The Bottom Line
Our experts selected RISLA for this list because they allow borrowers to base monthly payments on their income, an option that’s not found with many other private lenders. RISLA also offers various deferment, forbearance, and forgiveness options, which makes them a great choice for those experiencing financial hardship. However, RISLA may not be a perfect fit for everyone; if you’d like to put your parent PLUS loans in your child’s name or need to borrow more than $250,000, you should check out other lenders on this list.
Try RISLARead more in the full RISLA review.
Common Bond - Best for Generous Forbearance Policies
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CommonBond is a great choice for parents and students who are looking to refinance large parent PLUS loan amounts at low interest rates. Qualification requirements can be strict, especially if you want to take 15 or 20 years to repay the loan. However, if you do qualify, you’ll have access to CommonBond’s generous forbearance options which include up to 24 months of deferment over the life of the loan.
Pros
Cons
CommonBond offers parent PLUS refinancing to both the original borrowers and graduated students who want to take over their parents’ loans. Applicants can borrow any amount up to $500,000 at APRs ranging from 2.24% to 7.34%. One of the most unique features offered by CommonBond is its hybrid interest rate that is fixed for five years then variable for the following five years; this is a good option if borrowers anticipate interest rates will decrease in a few years’ time.
CommonBond offers several repayment terms to choose from, including five, seven, ten, 15, and 20 years. Qualifying can be difficult, however, especially for longer-term loans; borrowers should earn at least $65,000 per year with a FICO score of 680 or higher if they want to stretch repayment out over 15 or 20 years. The student will also need to graduate from a Title IV school prior to refinancing.
The Bottom Line
There are various reasons why CommonBond made our experts’ list of the best parent PLUS loan refinancing options. For one, CommonBond provides high loan limits, competitive interest rates, and long repayment terms to make monthly payments more affordable. CommonBond also offers borrowers a unique way to save on interest through their hybrid interest rate. They’re also set apart by their generous forbearance policy that allows up to 24 months of payment deferment.
Try CommonBond
Read more in the full CommonBond review.
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How to Choose the Best Parent PLUS Refinance Loan?
Before you settle on one specific parent PLUS refinance lender, you’ll want to spend a little time researching the various options that are available to you. To find the refinancing option that best meets your needs, it’s a good idea to evaluate each lender based on criteria such as loan features, interest rates, application process, qualifications, customer support, online reviews, and additional features; these are the same factors used by our experts to rank the best parent PLUS loan refinance companies in this article.
- Loan Features: As you’re comparing your options, pay close attention to the loan terms, loan amounts, and loan use limitations; there’s no point applying for a loan if it can’t be used for parent PLUS refinancing or if the maximum loan amount is lower than what you currently owe.
- Interest rates and fees: Another important factor to consider is the minimum and maximum interest rates charged by the lender plus any additional fees that may apply.
- Application process: Every lender has a different application process with some being more invasive than others. Check to see which parent PLUS loan refinance companies offer pre-qualification with a soft credit pull that will allow you to check offers without harming your credit.
- Qualification process: It’s also important to assess each lender’s qualification process. Take some time to verify whether or not you meet the minimum requirements for credit score, income, debt-to-income ratio, and work history; doing so will save you from wasting your time applying for loans you don’t qualify for.
- Customer support: At some point during the life of the loan, it’s likely you’ll need to talk to your lender’s customer service department. Make sure that they’re easily accessible with support on multiple channels including online and by telephone. It’s also helpful if the lender offers supplemental information and tools online to help answer your questions whenever they arise.
- Online user reviews: It’s a good idea to check reviews and ratings, especially on independent sites like Trustpilot. By reading each lender’s reviews, you’ll be able to determine how well they treat their customers and whether you want to do business with them.
- Perks and Bonuses: You should also consider additional perks and bonuses like payment flexibility and advanced technology. For example, don’t bother applying with a lender that requires payment by mail if there are others offering user-friendly apps that make payment easy?
Best Loans for Parent PLUS Refinance - Feature Comparison
| Company Name | Est. APR | Min. credit score | Loan Amount | Loan term |
| Laurel Road | 1.89% - 6.2% variable 3.49 - 6.3% fixed | 660 | $5,000+ | 5 to 20 years |
| Earnest | 1.74% - 7.99% variable 2.99% - 7.99% fixed | 650 | $5,000 to $500,000 | 5 to 20 years |
| SoFi | 1.74% - 7.99% variable 3.49% - 7.99% fixed | 650 | $5,000+ | 5, 7, 10, 15, or 20 years |
| PenFed | Starting at 5.49% fixed | 670 | $7,500 to $300,000 | 5, 8, 12, or 15 years |
| RISLA | Starting at 4.29% fixed | 680 | $7,500 to $250,000 | 5, 10, or 15 years |
| CommonBond | 2.24% - 7.34% variable 2.94% - 6.99% fixed | 680 | Up to $500,000 | 5, 7, 10, 15, or 20 years |
What Is a Parent PLUS Loan?
A parent PLUS loan is a federal loan provided to the parent or guardian of a dependent undergraduate student. Parent PLUS loans can be taken out in large amounts, up to the cost of attendance (minus any financial aid that the student has been awarded). These loans are not subsidized, which means interest starts to accrue as soon as funds have been disbursed. Parent PLUS loans are unique in that the student is under no legal obligation to repay the loan; the parent or guardian who borrowed the funds is fully responsible for repayment.
When Should You Refinance Parent PLUS Student Loans?
While refinancing parent PLUS loans is a great option for many borrowers, it’s not always the best solution. Refinancing should be considered a viable option if:
- You want to consolidate multiple parent PLUS loans into one: If you have several parent PLUS loans—either taken out for multiple children or for different school years—you can refinance them all into a private loan so you can enjoy the convenience of a single monthly payment.
- You can get a lower interest rate: You may be able to get a better interest rate by refinancing your parent PLUS student loans, especially if you have good credit. In the past decade, APRs on parent PLUS loans have reached up to 7.9%; you can save a significant amount of money if you refinance those loans at a lower rate.
- You need a lower monthly payment: Parents who are struggling to afford the required monthly payment should consider refinancing. You may be able to find private loans with longer repayment terms and lower interest rates, which will reduce your monthly payment and ease the strain on your finances.
- You want your child to take over the loans: If your child has graduated from university and secured a good job, you may want to consider having them take responsibility for repayment. This can’t be done through the federal government, but it is possible with parent PLUS refinance lenders.
How Does Parent PLUS Loan Refinancing Work?
Parent PLUS loan refinancing is pretty straightforward; in essence, all you need to do is find a lender that offers loan terms you like, apply, and wait for approval. However, you will need to keep up with your federal PLUS loan payments as you’re going through the process. Thankfully, it shouldn’t take long—funds are typically disbursed within a week of loan approval. Once you receive notification that your old loan has been paid off, you can start making repayment with your new lender.
What Are My Options for Repaying Parent PLUS Loans?
There are several options available to parents who are repaying parent PLUS loans. Of course, parents could continue repaying their loans through the federal program, but this may not work for everyone. Parents who are struggling with high interest rates or exorbitant monthly payments should consider other options, such as federal consolidation of their loans, income-based repayment plans, or refinancing with a private lender.
How Can I Repay Parent PLUS Loans Quickly?
If you’re looking for ways to pay off your parent PLUS loans more quickly, there are a few ways to accomplish this:
- Pay more per month on the standard repayment plan.
- Ask your child to contribute to payments (keeping in mind they’re not legally obligated to make repayment on parent PLUS loans).
- Refinance your parent PLUS loans with a lower interest rate and shorter repayment period.
Can You Refinance Parent PLUS Loans in Your Child’s Name?
Yes, it is possible to refinance parent PLUS loans and make repayment your child’s responsibility. This can only be done through select private lenders, however; the federal lending program plus some private loan companies don't offer this option. It’s also important to note that your child must meet all the loan qualifications first, including credit score, debt-to-income ratio, and work history.
How to Refinance Parent PLUS Loans
The best way to refinance parent PLUS loans differs slightly depending on whether you’re the original borrower wanting to refinance your own loans or a university graduate who wants to take over loans for your parents.
Parents Refinancing Their PLUS Loans
If you’re a parent who took out parent PLUS loans to pay for your child’s university education and you want to refinance, you should:
- Do Your Research: Before refinancing your parent PLUS loans, take time to do your research and make sure it’s the best option available to you.
- Select Your Preferred Lender: Once you’ve determined that loan refinancing is the best choice, you’ll then need to check the terms and interest rates offered by various lenders and make comparisons to find one that meets your needs.
- Fill Out the Loan Application: After selecting your preferred lender, gather all the documentation you’ll need, including personal identification, proof of income, and payoff statements from your current lender.
- Sign Loan Documents: If your application is approved, your lender will have you sign a loan agreement before paying off your parent PLUS loans.
- Start New Loan Payments: You’ll need to start making payments on your new loan once your federal parent PLUS loans have been paid off and switched to the new lender. It’s a good idea to sign up for automatic withdrawal to be sure you don’t miss any payments.
Students Refinancing Their Parents’ PLUS Loans
If you’re a university graduate who wants to repay the PLUS loans your parents took out for your education, you should:
- Check the Loan Qualifications: Loan qualifications might be tough to meet, especially for a recent college graduate; you’ll need to be sure you meet the minimum requirements for credit score, work history, and debt-to-income ratio before applying.
- Calculate Your Budget for Repayment: Before applying for parent Plus refinancing, you should also figure out how much you can afford to pay per month.
- Compare Lenders: After determining the repayment amount your budget will allow, start looking at various lenders and pre-qualify for a few offers to see what terms they offer; then you can pick the one that best fits your budget.
- Complete the Application: Once you’ve selected the lender that best meets your needs, it’s time to gather your documents and complete the loan application.
- Begin Making Payments: After your loan is approved and the old parent PLUS loan has been paid off, you’ll typically have about a month before repayment on the new loan begins. To ensure you don’t miss any payments, consider signing up for autopay.
How Do You Get The Best Interest Rate When Refinancing Parent PLUS Loans?
Here are a few tips to ensure you get the best parent PLUS loan refinance rates:
- Meet Your Financial Obligations: Make sure to pay all your bills on time, especially loan and credit card payments.
- Maintain A Solid Work History: Having a stable income and working at the same place for several years can help you secure a better interest rate.
- Improve Your Credit Score: The higher your credit score, the better the interest rates you’ll qualify for. You can improve your credit score by eliminating errors on your credit report, increasing the available credit on your credit cards, and paying down balances on revolving credit.
- Apply With A Cosigner: Some lenders may allow you to have a cosigner, which could help you earn a better interest rate.
- Compare Offers: Take time to look at several different lenders to find the best place to refinance parent PLUS loans. Prequalify with a few of your favorites and compare their offers to find which lender offers the best interest rate.
Conclusion
Parent PLUS loan refinancing is a great way to roll all your loans into one at a reduced interest rate, potentially saving you thousands of dollars over the lifetime of the loan. Refinancing also allows you to have your child take over repayment of the educational loans they benefited from.
However, refinancing may not be the best option for everyone; if you have a low credit score, limited income, or spotty work history, you may struggle to qualify for the lowest interest rates. Take time to research all the options, prequalify with a few lenders to discover what interest rates are available to you, then decide if refinancing your parent PLUS loans will be advantageous in the long run.
FAQs
How Do Federal Plus Loans Compare To Private Refinance Loans?
Federal PLUS loans tend to provide a wider range of
repayment options compared to private lenders. However, private lenders can
offer better interest rates and lower loan origination fees, especially for
borrowers with good credit.
What Is Parent Plus Loan Consolidation? How Does It Differ From Refinancing?
Loan consolidation makes it possible to combine multiple
federal student loans into one. This can only be done through the federal
lending program and doesn’t change the interest rates on the loans. Refinancing
is done through a private lender that can offer reduced interest rates and
various repayment terms.
What If I Can’t Pay My Parent PLUS Loans?
If you’re having trouble repaying your parent PLUS loans,
you could try switching to a new type of repayment plan. If the financial
hardship you’re experiencing is only temporary, it’s possible to postpone
payments until your finances are in better shape. You might also consider
having your child refinance the loans in their name to ease your financial burden.
How Much Could You Save by Refinancing Parent PLUS Loans?
How much you save will depend on several different
factors—including your outstanding balance, current and new interest rates, and
repayment terms—but the savings could be substantial. For example, if you owe
$40,000 on a parent PLUS loan with 7.595% interest and ten more years of
repayment, you’ll end up paying $57,215 total. If you refinance that loan at an
interest rate of 3.49%, you’ll only pay $47,443. That saves you almost $10,000
in interest!
What Alternatives Are There To Parent PLUS Loan Refinancing?
If you’re wanting to pay off your federal parent PLUS loans
but you’re not sure about refinancing, there are several other options you
could consider, such as consolidating loans through the federal program, taking
out a home equity loan, using funds from your Roth IRA, having your child
assume responsibility for the loans, or using an unsecured line of credit.
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Christi Gorbett
Freelance Content Marketing Writer specializing in finance, personal development, education, marketing, web development, food & beverage manufacturing, pet, and contracting/home improvement niches.
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