How to Refinance Parent PLUS Loans (or Private Parent Loans) in 8 Steps

Refinancing student loans for parents can lower your interest rate, reduce monthly payments, or transfer the debt to your child.

Both private and Parent PLUS loans can be refinanced, but switching federal loans to a private lender means losing access to benefits like forbearance and income-driven repayment plans. If you want to keep federal protections, consolidation may be a better option.

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Should I Refinance My Parent PLUS Loans? When It’s Smart—and When to Avoid It

Below, we’ll explain how to refinance parent loans in your name or your child’s, plus highlight the best lenders for refinancing and alternatives if refinancing isn’t the right move for you.

Table of Contents

1. 1. Check your credit and finances.
2. 2. Compare lenders with parent-specific options.
3. 3. Confirm the lender allows transfers from parent to child (if transferring).
4. 4. Ensure the child qualifies independently (if transferring)
5. 5. Use a refinance calculator to estimate savings.
6. 6. Gather required documents.
7. 7. Submit your application and monitor loan payoff.
8. 8. Set up automatic payments.
9. Alternatives to refinancing for Parent PLUS loans

When refinancing from federal to private student loans, the main factor you must consider is losing federal benefits. Parents considering refinancing loans should look at their current financial condition. If the child is in a situation where they can take on the debt payment (and the parents planned to transfer the debt to their child), they should discuss whether they’re comfortable losing federal benefits for the parent and the child. If the parent chooses to repay the loan for their child regardless of the child’s financial condition, the parent should consider the impact of losing the benefits that accompany federal loans. And as always, when in doubt or stuck at a crossroads, consult a financial professional.

1. Check your credit and finances.

Lenders typically require good credit (often 650+), a stable income, and a reasonable debt-to-income (DTI) ratio. If your credit needs improvement, consider boosting it before applying.

2. Compare lenders with parent-specific options.

Some student loan refinance lenders cater specifically to parent borrowers and may offer better rates or flexible repayment terms. Prequalify with multiple lenders to see personalized rates without affecting your credit score.

3. Confirm the lender allows transfers from parent to child (if transferring).

Not all refinance lenders allow parents to transfer loans to a child. Check lender policies before applying. The table below includes four of our picks for the best refinance student loan lenders that allow you to refinance parent loans in your name or your child’s name.

Lender	Starting rates (APR)	Transfer to child?
Credible	4.75%	✅*
ELFI	5.28%	✅
Earnest	5.44%	❌
RISLA	6.34%	✅**

We selected these lenders based on years of research comparing rates, fees, and features. Click the lender’s name in the table to find out more about its refinance loan for parents. You can read our full roundup post here:

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The Best Lenders to Refinance Parent PLUS Loans.

4. Ensure the child qualifies independently (if transferring)

The child must meet the lender’s credit and income requirements to refinance without a cosigner. If their credit is limited, they may need to build credit before qualifying.

Consider using a cosigner (if needed). Some lenders allow another cosigner (not the parent) to help the child qualify. The cosigner can later be released if the child meets lender requirements after a set period.

5. Use a refinance calculator to estimate savings.

Run the numbers to ensure refinancing actually lowers your costs. Look at total interest paid, not just monthly payments, to avoid stretching the loan term unnecessarily.

6. Gather required documents.

Most lenders will ask for proof of income (pay stubs or tax returns), a government-issued ID, and current loan details. Some lenders may also consider retirement assets when evaluating eligibility.

7. Submit your application and monitor loan payoff.

Once approved, the new lender will pay off the parent’s loan. Parents should check their loan servicer account to ensure the loan is closed and their obligation is removed. Keep making payments until you receive confirmation that the old loan is closed.

8. Set up automatic payments.

Whether it’s in the parent’s or child’s name, taking on a refinanced student loan impacts credit and cash flow. Setting up autopay and tracking spending can help avoid missed payments and protect credit. Many lenders offer an interest rate discount (usually 0.25%) for setting up autopay, which can help save money over time.

If the child is approved, the parent will be relieved of the debt. This will improve the parent’s debt-to-income ratio (DTI) and free up cash flow. In contrast, the child’s credit will dip, but this should be temporary as long as the child makes on-time payments. This will, in turn, increase the child’s DTI, so it’s wise for the child to keep an eye on this to ensure they don’t take on additional debt that would cause them to exceed the thresholds to be approved for other financing, such as a mortgage. A benefit is that if the child has thin (little to no) credit, this is a terrific opportunity to build a credit history and work toward an excellent credit rating. But this will reduce the child’s free cash flow within their budget, so they must account for this when tracking their income and expenses.

Alternatives to refinancing for Parent PLUS loans

If you have a Parent PLUS loan and don’t want to lose access to federal benefits due to refinancing, consider federal student loan consolidation.

To consolidate a Parent PLUS loan, you must apply for a Direct Consolidation Loan by visiting the StudentAid website. Be prepared to provide the following information:

• Your FSA ID
• Current loan information
• Financial information

Consolidating your loans with a Direct Consolidation Loan can help you become eligible for the income-contingent repayment (ICR) plan. This plan determines your monthly payment as the lesser of:

• How much you’d pay over 12 years based on your income 
• 20% of your discretionary income

As an alternative to federal student loan consolidation, you could also consider refinancing a Parent PLUS loan with a home equity line of credit (HELOC) or home equity loan. Remember: If you default on either of those loans, a lender could foreclose on your home.