Best Companies to Refinance Parent Plus Loans this Year
Refinancing a Parent PLUS loan can be an excellent way to save on interest, read more to find out how to refinance Parent PLUS loans the best companies for it.
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Parent PLUS loans are a type of federal loan given to parents wanting to finance their children’s education. Unfortunately, they have high-interest rates and can be difficult to manage. To make it easier to pay off, borrowers can consider refinancing. Refinancing Parent PLUS loans can help in lowering interest rates, and saving money in the long run.
This Scholaroo blog provides a review of the best companies to refinance Parent PLUS loans and a guide on how to refinance Parent PLUS loans.
7 Best Companies To Refinance Parent Plus Loans
|Lender||Scholaroo rating||Fixed rates starting (APR)||Variable rates starting (APR)|
Great for Personal Loan AdviseVisit website
Best Customer ServiceVisit website
Decades of ExperienceVisit website
Market Competitive Interest RatesVisit website
Brazos Student Loans
Convenient Application ProcessVisit website
Education Loan Finance
User-friendly websiteVisit website
Great online refinancing company with multiple loan termsVisit website
Great for Personal Loan Advise
Best Customer Service
Decades of Experience
Market Competitive Interest Rates
Brazos Student Loans
Convenient Application Process
Education Loan Finance
Great online refinancing company with multiple loan terms
#2 Laurel Road Bank
#3 Citizens Bank
#5 Brazos Student Loans.com
#6 Education Loan Finance
#7 PenFed Credit Union
What are Parent PLUS Loans?
Parents take advantage of Parent PLUS loans, a type of federal loan to pay for their children’s education. Any parent can apply for this loan and they can use it for various educational purposes including tuition, room and boarding or textbooks.
Can you refinance Parent PLUS loans?
You can refinance your Parent PLUS loan with one of the many lenders offering refinancing services. Refinancing a Parent PLUS loan involves taking out a new loan and paying off the original loan with it. This creates a brand-new loan that may come with more favorable terms, such as a lower interest rate or longer repayment period.
How to Refinance Parent PLUS Loans?
Following are the main steps to refinance a Parent PLUS loan.
- Research and Compare Lenders: The first step is to research different lenders, and compare eligibility, rates, and repayment options to get the best deals. You can use the prequalification assessments offered by most lenders that can help you compare and get the best offer.
- Assess if Refinancing your Parent PLUS Loan is Worthwhile: Calculate your potential savings to see if refinancing is worth your while. Check how much you will have to pay up in total with the current rates and terms and compare it against the new terms you are potentially getting through refinancing. You can use our student loan calculator below to get an estimate for different rates and terms.
- Check Requirements and Gather Documents: Once you have chosen to refinance your loan with a specific company, check the information it requires along with the supporting documents that you will need to provide.
- Apply for Refinancing: Once you have chosen the lender, you can apply for refinancing. You will need to submit financial documents and employment verifications. Check for eligibility criteria and keep all documents ready before applying.
- Accept the New Loan: If your application is approved, the lender will offer you a new loan with its terms. You can either negotiate, accept or reject. If you accept a new agreement will be signed.
- Make Payments: You can set up automatic payments to get a discount with some lenders or make sure to stay on top of your payments by keeping them in your calendar reminders.
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Should You Refinance Parent PLUS Loans - Pros and Cons of Refinancing
Pros of Refinancing:
- Lower Interest Rate: Refinancing can help in lowering the interest rate, reducing your monthly payments
- Longer Repayment Period: You can choose a longer repayment period, allowing you to spread out payments over more months or years
- Flexible Repayment Options: Some lenders allow borrowers to choose between fixed-rate and variable rate for the loan term.
- Consolidate Loans: If you have multiple Parent PLUS loans, refinancing can help you consolidate them into one loan with a single payment making it easier to keep track of payments.
- Improve Credit Score: Paying off your loan on time and in full can improve your credit score, making it easier for you to qualify for future loans.
Cons of Refinancing:
- Closing Costs: Some lenders may charge closing costs when refinancing a Parent PLUS loan, so review all the details of your loan agreement before signing.
- Higher Interest Rate: In some cases, the interest rate after refinancing may be higher than what you were paying previously, increasing your monthly payments and total loan cost.
- Prepayment Penalties: Some lenders charge a penalty if you want to pay off your loan early or make larger payments than expected. Make sure to ask about any prepayment penalties before refinancing.
- Credit Check: Refinancing requires a hard credit check, which could lower your credit score temporarily.
Altrenatives To Refinancing
In case you are not able to get your Parent PLUS Loan refinanced, there are other alternatives you can try to pay off the loan easily.
- Consolidation: With consolidation, you can bring all your federal loans under one new loan with a single monthly payment. It doesn’t usually give you a lower interest rate but can extend the loan term which can help reduce the monthly payments and make them more manageable. However, bear in mind that the total cost of a loan may increase this way. Federal loan consolidation does not require a credit check either.
- Income-Based Repayment: With federal loans, you can opt for an income-based repayment plan where your monthly payments will be a part of your income depending on your family size and earnings. This is another way to help make payments manageable. Moreover, under the federal income-based repayment plan, you can also become eligible for loan forgiveness after 20 years.
- Extended Repayment: You can increase your repayment period up to 25 years. An extended repayment would mean a longer term and lower monthly payments. You will also have more time to pay off your loan.
- Grants: You or your child may be eligible for government grants. You can check your financial aid offer that you got after applying for FAFSA. You may be eligible for some grants that you can use to pay off some of the loan and reduce your overall burden. Unlike loans, grants do not have to be paid off.
- Scholarships: There are various scholarships available to students that can help them get some extra money to pay off some of the loan installments. Your child can apply for the ones they are eligible for to help with the loan repayment.
- Get Your Child on Board: Other ways your child can help you pay off the loan you took for them is by taking on a part-time job on the side that can help contribute towards loan payment and make the process easier.
Can you refinance Parent PLUS loans?
Yes, you can refinance a Parent Plus loan through various private lenders. Some of the best ones include Earnest, Laurel Roal, Citizens Bank, and Sofi.
Can I convert my parent PLUS loan to a student loan?
If your lender allows it you can convert your Parent Plus loan to a student loan. It can give you the opportunity to secure lower interest rates, adjustable repayment options, and other benefits. However, it can have some drawbacks like losing certain protections or being subject to different terms and conditions. Be sure to do your research carefully before proceeding with this kind of transfer.
Can I transfer my parent PLUS loan to my child?
No, you cannot transfer a Parent PLUS loan to your child. In order for the loan to be transferred, both parties must agree to the terms and conditions of the loan. Also, even if you do choose to transfer the loan, any remaining balance on the original loan will still be held by you and must be repaid. It is best to consult a financial expert before making any decisions regarding the transfer of a Parent PLUS loan.
Which is the best company to refinance parent PLUS loans?
The best company to refinance parent PLUS loans depends on your needs. Research different lenders, and compare rates, terms, and repayment options before making a decision. Some popular companies offering to refinance for Parent PLUS loans include SoFi, Earnest, Laurel Road, Citizens Bank and Brazos.
Are parent PLUS loans forgiven after 10 years?
Yes, Parent PLUS loans are eligible for loan forgiveness through the Public Service Loan Forgiveness Program. However, if you choose to refinance them with a private lender, you will lose this particular federal benefit and will not be eligible for forgiveness.
Are Parent PLUS loans private or federal?
Parent PLUS loans are federal loans that parents can get for their dependent children who are college students to help pay for their cost of attendance.