The Best Parent Private Student Loans

Finding the best parent private student loan can be quite an uphill task. The following tips will help you identify the loan that is best suited for you:

1. Loan Amount

The amount of money the lender is willing to give is one aspect that is important when comparing loans. This will help you know if the loan will be enough to cover the entire cost of attendance, as well as the extent to which the loan will assist in meeting your educational needs/expenses.

2. Interest Rates

Lenders may offer both fixed or variable interest rates on the loans they offer, so make sure to choose parent-private student loans with lower interest rates. Borrowers need to be creditworthy to receive lower rates on the amount they borrow.

3. Application Process

The best parent-private student loans have a seamless application process that is quite straightforward and the communication is prompt. The whole process should take a maximum of six weeks between loan application and approval.

4. Loan Terms

Loan terms define the overall relationship between the lender and the borrower. Some lenders have flexible payment methods and timeframes, whereas others are more strict on penalties and offer only traditional forbearance terms. Opt for leniency and longer payment terms that give you ample time to organize your finances.

5. Fees

There are various private loans that require you to pay certain fees such as origination-, application-, or late fees. Some of the best loans require you to pay these fees, while others do not charge anything. 

6. Eligibility

Go for parent-private student loans that you or your child are eligible for. Apart from the general eligibility requirements, there are loans that go into the specifics of the institution, the level, or the field of study. Others require you to have strong credit and a regular source of income.

7. Repayment Options

Different lenders have different repayment options such as grace periods, forbearance, or deferment options. There are private loans that require you to start making payments while the student is in school, whereas others give you a six-month grace period after graduation. Ensure that you find the best repayment option for your financial situation.

Federal student loans are financial aid given to students by the U.S. government. They are loans that have flexible repayment options and lower interest rates compared to private loans. Federal student loans are a good option for borrowers with a financial need or those with a tainted credit history.

The government offers federal loans in terms of direct subsidized loans, direct unsubsidized loans, and direct plus loans. The Direct PLUS Loans have the Grad PLUS and Parent PLUS Loan options. The Federal Student Aid office offers the Parent PLUS Loan to parents to help aid in catering to their child’s education. 

Parent PLUS Loans are given out to either biological, adoptive, or at times stepparents of the eligible students. This loan is an unsubsidized loan that is mostly taken after a student has already taken out any other type of federal loan. Parent PLUS Loans offer additional aid that is needed to cover the remaining part of the costs of attendance after exhausting any other federal loan given to the student.

Being an online lender, College Ave offers many student loans including a private parent loan. College Ave loans up to $2,500 to the parent to be used at their discretion. College Ave is recognized as one of the best lenders for offering various favorable repayment plans and terms to suit parents and their varying budgets. Loans are not only limited to biological parents but are also available to guardians, grandparents, and even uncles and aunts.

Pros of College Ave loans:

• No origination, application, or prepayment fees
• Up to 100% of the school’s attendance costs covered
• Loan can be delivered directly to the parent 
• Easy repayment options

Cons of College Ave loans:

• Their forbearance policy is not clear

Eligibility requirements:

• A credit score in the mid-600s
• Must be a U.S. citizen or permanent resident
• Be enrolled at an accredited institution at least on a half-time basis

Repayment details:

• In-school payment options
• No grace period
• Repayment terms of five to 15 years
• Interest accrued each month must be paid

A.M Money makes loans accessible to students attending an A.M Money-approved school, so the school that the borrower plans to attend must be working in collaboration with the lender. A.M Money does not rely on the credit check and financial history of the borrower but mostly focuses on academic capabilities.

Pros of A.M Money loans:

• No application, prepayment, or late fees
• Loans are based on academics
• No cosigner is needed
• Offers income-based repayment options

Cons of A.M Money loans:

• An origination fee of up to 4.5%
• Eligibility requirements:
• A minimum credit score of 540 and a minimum income 
• Have an above-average GPA
• Attend an eligible school

Repayment details:

• Six months grace period
• Full-in school deferment options available 
• Immediate repayment and post-school repayment options are available
• Repayment terms of five to 15 years

SoFi is a student loan provider that offers loans and refinancing options. They offer to refinance both private student loans and federal loans. SoFi offers customized rate estimates without affecting the borrowers’ credit. This lender is a good option for borrowers who wish to pay off their student loans quickly. They have an intuitive online application process and offer reward points that borrowers can use to pay down their loans.

Pros of SoFi loans:

• Flexible repayment options
• Prequalifies without a hard credit check
• No fees
• Offers career planning and helps in job searching

Cons of SoFi loans:

• Minimum credit score needed

Eligibility requirements:

• Borrowers must be a U.S. citizen and employed
• Minimum credit score of 650
• Parent must have an associate degree or higher 

Repayment details:

• Multiple repayment options available (interest only, flat fee, and deferred)
• In-school repayment options
• Deferment options available for undergraduate and graduate borrowers
• Loan term of five, seven, 10, or 15 years

The Discover parent loans are offered to parents or other creditworthy individuals taking out loans for their undergraduate or graduate students. The Discover loans are for borrowers with strong credit. Although aggregate loan limits apply, the minimum amount for each loan is $1,000. Parents can apply in minutes, set up their loan terms, and receive their funding online. Loan amounts are certified before disbursement through the school so that parents do not borrow more than they need.

Pros of Discover loans:

• International students can apply
• No late fees
• Can borrow up to 100% of the school-certified cost of attendance
• 0.25% auto debit reward

Cons of Discover loans:

• A hard credit check

Eligibility requirements:

• Minimum credit of around mid-600s
• Must be a U.S. citizen or permanent resident
• Students must be enrolled at an eligible school pursuing a degree program
• Must meet and maintain satisfactory academic progress

Repayment details:

• 0.25% interest rate reduction on auto payment
• In-school deferment options
• The repayment term of 15 years

Citizen Bank offers private student loans with borrowers qualifying for an interest rate discount if they have an existing account with the bank. Student loans are available in all states, but checking and savings accounts are only available in limited states. Borrowers can borrow any amount between $1,000 – $ 350,000. They offer both cosigned and parent student loans. What stands out about Citizen Bank is that they offer a multi-year approval so with the first loan application, you can receive funding for the entire college duration without submitting documents or reapplying.

Pros of Citizen Bank loans:

• No origination, application, or disbursement fees
• Can cover up to 100% of school attendance costs 
• In addition to standard forbearance, they offer loan modification programs
• Offers the maximum interest rate under 10%

Cons of Citizen Bank loans:

• No estimate rates provided without a credit check (soft)

Eligibility requirements:

• The parent and student must be U.S. citizens
• Students must attend and be enrolled at least on the half-time basis
• International students need to have a cosigner
• Have no history of defaulting on previous loans

Repayment details:

• Up to 12 months forbearance option
• Five to 10 years loan term
• Six months loan deferment after graduation
• Late fee of 5% of the total payment

Is a Parent PLUS loan better than a private loan?

A Parent PLUS loan may be better than a private loan in that it offers lower interest rates and better repayment options, and the borrower is eligible for loan forgiveness. Private loans have higher interest rates and fixed repayment terms/options.

What is the best bank for parent student loans? 

The best bank trickles down to the borrower’s individual preference and financial standing. However, Citizen Bank and College Ave have the best reviews from previous borrowers and their current customers.

How do I select the best private loan?

Select the best private loan by going through your lenders and weighing in their terms and the loan amount against your current financial situation/your ability to repay and your educational needs.