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If you took out a Parent PLUS loan to help pay for your child’s education, you may be able to refinance it to lower the interest rate and, if you wish, transfer it to your child.
Below, you’ll find a few lenders who refinance Parent PLUS loans, each with varying interest rates, terms, and benefits. You’ll also find some useful information that can help you make the best decision for your needs.
On this page:
- Lenders That Refinance Parent PLUS Loans
- How to Refinance a Parent PLUS Loan
- Can You Transfer a Parent PLUS Loan to a Child?
- Alternative Repayment Options
Lenders That Refinance Parent PLUS Loans
Here are three companies that offer Parent PLUS loan refinancing:
3.21% – 8.77%
$5,000 – $500,000
Transfer to Child
Earnest is our top-rated student loan refinance lender. Borrowers can refinance Parent PLUS loans, but will not be able to transfer the loan to a child.
One unique benefit of refinancing with Earnest is that the lender allows borrowers to skip one payment per year without penalty. This can come in handy if, for example, unexpected financial loss were to occur.
Earnest strives to offer a unique application and approval process for people who want to refinance Parent PLUS loans. They don’t just look at the credit score of the applicant, but they try to account for a wide variety of factors. There are no set income requirements, either.
- Minimum credit score: 650
- Variable rates: 3.21% – 8.72%
- Fixed rates: 3.21% – 8.77%
- Rate reduction: 0.25% automatic payment discount
- Fees: None
- Repayment terms: 5 – 20 years
3.30% – 6.69%
$15,000 – Total outstanding loan balance
Transfer to Child
ELFI is a lender that allows parents to refinance their Parent PLUS loans into a child’s name. Borrowers can receive a rate estimate with a soft-credit pull before submitting a full application. A Personal Loan Advisor will walk you through the entire process offering assistance.
- Minimum credit score: 680
- Minimum annual income: $35,000
- Variables rates: 3.50% – 6.01%
- Fixed rates: 3.30% – 6.69%
- Fees: Late fee of 5% or $50, whichever is less
- Repayment terms: 5, 7, or 10 years
2.72% – 6.41%
$10,000 – $500,000
Transfer to Child
Citizens Bank is a national bank that offers a specific student loan refinance product for those looking to transfer a Parent PLUS loan to a child. You can refinance loans for multiple children, even while they are still in school.
- Variable rates: 2.72% – 6.16%
- Fixed rates: 3.59% – 6.41%
- Rate reduction: 0.25% automatic payment discount and 0.25% loyalty discount
- Fees: None
- Repayment terms: 5, 7, 10, 15, or 20 years
How to Refinance a Parent PLUS Loan
Parent PLUS loans currently have interest rates of 7.08%, but have ranged between 6.31% and 7.90% over the years. PLUS loans typically have the highest interest rate of all federal student loans. Because of this, it may make sense to refinance your parent PLUS loan with a private lender to get a lower rate.
Private lenders require you to have a good credit score and steady income to be eligible for refinancing. If you have both, then the following steps can help you get started:
- Compare rates: Compare your current interest rate to the estimated ranges provided by each student loan refinancing company. You can start with the companies listed on this page. If a lender allows you to pre-qualify with a soft credit check, you can do so to get a better idea of what your rate would be. To complete your comparison, you can use our student loan refinance calculator to compare savings.
- Check the eligibility requirements: Once you find a lender that offers you a lower interest rate, check the eligibility requirements to make sure you check off all the boxes.
- Apply for a new loan: If the lender offers you a lower interest rate, you are ready to submit your application. If you’re approved following a hard credit check, your existing Parent PLUS loans will be paid off and you will be responsible for making monthly payments to the new lender.
Can You Transfer a Parent PLUS Loan to a Child?
When refinancing Parent PLUS loans, you may have the option to transfer the loan to your child depending on the lender. If you want your child to take on responsibility for the loan, make sure the lender you refinance with allows you to do so.
The lenders in the table below allow you to transfer a Parent PLUS loan to a child.
|Company||Rates (APR)||Loan Amounts||Transfer to Child|
|ELFI||3.30% – 6.69%||$15,000+||Yes|
|Citizens Bank||2.72% – 6.41%||$10,000 – $500,000||Yes|
How to Transfer Parent PLUS Loans to a Child
You can’t transfer a Parent PLUS loan to your child through the Department of Education. However, you can transfer it by refinancing with a private lender.
Your child will need to apply and have a good credit score and steady income. The application process usually requires the child to have earned at least a bachelor’s degree or higher.
Benefits of Transferring to a Child
The benefits of transferring a federal Parent PLUS loan to a child are that you are no longer responsible for making the monthly payment. Additionally, the new loan can have a lower interest rate than the original loan, and it’s entirely in the child’s name.
Negatives of Transferring to a Child
In general, if the Parent PLUS loan is refinanced it can cause you to lose federal loan program protections including the Public Service Loan Forgiveness option and income-driven repayment plans. Also, the child will bear the responsibility of the loan and that could create a financial or legal burden if they can’t meet their monthly payment.
Alternative Repayment Options
If you hold a Parent PLUS loan, there are alternatives to the traditional student loan refinancing options named above. These include:
- HELOC: This stands for home equity line of credit. You’re basically using the equity in your home to pay off student loan debt. There are risks to this option, including the fact that if you default on this loan you could lose your home. Learn more about this process with our page on using a HELOC to pay off student loans.
- Unsecured Line of Credit: An unsecured line of credit doesn’t require you to use your home or anything else as collateral. You can repay loans, but this option is usually only available to the most creditworthy borrowers. Check our Best Personal Lines of Credit page to see our top picks.
If you are ready to refinance your Parent PLUS loan, Earnest and ELFI are our top-rated lenders.
Author: Dave Rathmanner
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