Best Parent PLUS Loan Refinance

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. 

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 Parent PLUS Refinance Loans for 2022 - Full Overview

Based on the criteria outlined above, here are our experts’ choices for the best parent PLUS refinance loans:

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:

1. 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.
2. 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.
3. 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.
4. Sign Loan Documents: If your application is approved, your lender will have you sign a loan agreement before paying off your parent PLUS loans.
5. 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.