2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall
2021 NerdWallet Best-Of Awards Winner

Parent Loan Refinance

Refinance
Parent PLUS Loans Quickly

Did you know that you can refinance Parent PLUS loans? For parents who took out loans to help their children go to college, this can be an easy way for qualified borrowers to reduce their interest rate and pay off their loans sooner.

Whether you want to pay off your loans quickly, free up more room in your monthly budget, or even transfer your Parent PLUS loans to a child, student loan refinancing can help you accomplish your financial goals — and simplify your finances.

Refinance
Parent PLUS Loans Quickly

Did you know that you can refinance Parent PLUS loans? For parents who took out loans to help their children go to college, this can be an easy way for qualified borrowers to reduce their interest rate and pay off their loans sooner.

Whether you want to pay off your loans quickly, free up more room in your monthly budget, or even transfer your Parent PLUS loans to a child, student loan refinancing can help you accomplish your financial goals — and simplify your finances.

How Much Can You Save on Parent PLUS Loans?

Compare Student Loan Refinance Rates With No Impact on Credit

Today’s Rates Starting From 1.88% APR

Compare Your Actual Prequalified Rates in 2 Minutes

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Benefits of Refinancing Your Parent PLUS Loans

Qualify for a Lower Interest Rate

ultimately saving you money on interest costs over the life of your new refinanced loan.

Pay Off Your Loans Faster

with a lower interest rate — and flexible repayment terms

Merge All Your Loans into One

giving you just one monthly payment to worry about

Lower Your Monthly Payment

also with a lower interest rate — to have a smaller, more management monthly payment.

Parent PLUS Loan Refinance:
Interest Rates, Lenders, and Terms

Fixed Rate

2.50% – 5.79% APR​

Term

5 – 20 years

Minimum Credit Score

650

Variable Rate

1.88% – 5.64% APR​

Eligible Loans

Federal & Private

Purefy Rating

five-stars

Fixed Rate

2.50% – 5.79% APR​

Term (years)

5-20

Minimum Credit Score

650

Variable Rate

1.88% – 5.64% APR​

Eligible Loans

Federal & Private

Purefy Rating

five-stars
Lightning-fast loan processing
Up to 12 months financial hardship deferment
Doesn’t offer cosigned loans

Fixed Rate

2.89% – 5.63% APR​

Term

5, 8, 12, or 15 years

Minimum Credit Score

670

Variable Rate

Not Offered

Eligible Loans

Federal & Private

Purefy Rating

five-stars

Fixed Rate

2.89% – 5.63% APR​

Term (years)

5, 8, 12, or 15

Minimum Credit Score

670

Variable Rate

Not Offered

Eligible Loans

Federal & Private

Purefy Rating

five-stars
Spouse couples can refinance together using combined income
Become a member of the credit union at no cost when you refinance
Temporary and permanent financial hardship assistance available

Fixed Rate

2.58% – 5.99% APR

Term

5, 7, 10, 15, or 20 years

Minimum Credit Score

680

Variable Rate

2.39% – 6.01% APR

Eligible Loans

Federal & Private

Purefy Rating

five-stars

Fixed Rate

2.58% – 5.99% APR

Term (years)

5, 7, 10, 15, or 20

Minimum Credit Score

680

Variable Rate

2.39% – 6.01% APR

Eligible Loans

Federal & Private

Purefy Rating

five-stars

No maximum loan amount

Up to 12 months of forbearance if you experience financial hardship

Borrowers can refinance Parent PLUS loans in their own name

Fixed Rate

2.74% – 6.42% APR​

Term

5, 7, 10, 15, or 20 years

Minimum Credit Score

670

Variable Rate

Not Offered

Eligible Loans

Federal & Private

Purefy Rating

five-stars

Fixed Rate

2.74% – 6.42% APR​

Term (years)

5, 7, 10, 15, or 20

Minimum Credit Score

670

Variable Rate

Not Offered

Eligible Loans

Federal & Private

Purefy Rating

five-stars
Loans available in any state — not just Iowa
Loan forgiveness if the borrower dies or becomes totally and permanently disabled
Options to postpone payments due to qualifying financial hardships

Parent PLUS Loan Refinance Basics

First, what is student loan refinancing? Refinancing allows you to take out a loan from a private lender that covers the cost of your current debt. The new loan is completely different from your old ones — with a new repayment term, interest rate, and monthly payment. And, if you had multiple student loans before, refinancing gives you just one loan and one monthly payment going forward.

Refinancing your Parent PLUS loans and lowering your current interest rate can be a very big deal for your finances — especially when considering Parent PLUS Loans typically have the highest interest rate of any federal student loan. Your student loan balance can quickly balloon with such a high rate, making refinancing Parent PLUS Loans a smart financial decision for many families.

To get started with refinancing, use Purefy’s rate comparison tool . You’ll quickly and easily compare your actual student loan options from a tightly vetted list of refinance companies — all with one simple form.

All our lenders have sterling reputations and offer loans with no origination fees or prepayment penalties. The rate comparison tool will show your rate and monthly payment options with absolute transparency, allowing you to make an informed decision that meets your financial needs.

Some of our lenders also allow parents to transfer their Parent PLUS and private student loans into their child’s name — which can be a great way to help your children take charge of their education and start building up a credit history.

01

Top Reasons to Refinance Parent PLUS Loans

Save Money
All Parent PLUS loans get the same high, fixed interest rate regardless of your credit score. This rate is set every year by the federal government. For example, the rate for the 2018-2019 school year was 7.60%.

If you choose to refinance with a new provider and have good credit, you may find that you qualify for a substantially lower interest rate on multiple student loan options — saving you a large sum of money in the process of paying off your new loan.

Get One Simple Payment
Refinancing also serves as a Parent PLUS loan consolidation. If you have multiple loans (federal or private) they are all combined into one easy-to-manage loan, with just one monthly payment to your new provider.

Reduce Your Monthly Payment
Struggling to afford your current monthly payment? Refinancing can help with that, too.

When you refinance, you get a chance to choose a new loan repayment term and can opt for a longer term that reduces your payment each month. This flexibility lets you dial in your monthly payment exactly how you want it, so you can be more comfortable with the rest of your financial responsibilities.

For example, if you had $30,000 in student loans at 7.08% interest and a 10-year repayment term, your minimum monthly payment would be $350.

If you refinance your loans, keep your same interest rate, but extend your repayment term to 15 years, your payment would drop to only $271 per month. Refinancing would free up an extra $79 in your monthly budget.

Extending your repayment term can cause you to pay more in interest over time, but it may be worth it to get some extra breathing room each month to help with other necessary expenses.

02

Parent PLUS Loan Consolidation vs Refinancing Parent PLUS Loans

While refinancing can be a powerful tool for managing your Parent PLUS loans, there are some drawbacks to consider.

When you refinance Parent PLUS loans, you lose federal student loan benefits such as:

Deferment or Forbearance
Income-Driven Repayment Plans
Public Service Loan Forgiveness Program

If these federal benefits are important to you, an alternative option to refinancing is consolidating Parent PLUS loans with the federal government through a Direct Consolidation Loan.

This program consolidates all your federal loans, and the new rate is based on the weighted average of your current loans. So, although you’ll only have one loan and monthly payment to manage, there’s little chance you will save money on interest costs compared to the savings possible through refinancing.

It’s also worth noting that federal Parent PLUS loan consolidation does not let you combine your federal loans with your private student loans. For that, you would need to refinance.

03

What to Expect When You Apply

If you decide to refinance Parent PLUS Loans, use Purefy’s rate comparison tool first to view offers from multiple lenders at once, with just one simple form, and find your best rate.

To be eligible for Parent PLUS Loan refinancing, you’ll need to meet the following criteria:

Have a strong credit history
Have at least one outstanding education loan
Have steady income

Qualified borrowers may be offered significantly better rates and terms than they currently have on their Parent PLUS Loans, based on their creditworthiness including credit score, income, debt-to-income ratio, and other factors. If you have bad credit, you may be able to qualify by adding a creditworthy cosigner to your application.

Once you have decided on your lender of choice for your Parent PLUS loan refinance, you will be taken to that lender’s application, which can generally be completed in less than 15 minutes.

You’ve gone through enough loan application processes to know what to expect, but one tip is to have your current loan statements handy when applying — the lender will want to know the details.

If you are preapproved, you will need to submit documents to verify the information on your application including:

ID
Paystub
Loan statements

Other possible documentation, depending on the lender’s guidelines
All in all, the process is usually a bit more rigorous than something like an auto loan. To offer such low rates on unsecured loans (loans with no collateral), the lender’s underwriters must do their due diligence.

04

How to Pay Off Parent PLUS Loans Quickly

A Lower Rate
Have good credit? By refinancing your Parent PLUS loans — which have a high standardized interest rate — you can qualify for a much lower rate to save a lot of money on interest costs.

This can help you pay off your debt faster, too. If you’re saving money through a lower interest rate, you can put the extra cash toward additional prepayments, to pay off your loan more quickly — while maintaining the safety net of the same 10-year repayment term in case other expenses take priority.

For example:
Let’s say you had $30,000 in Parent PLUS Loans at 7.08% interest and a 10-year repayment term. Over the course of your repayment, you’d pay a total of $41,948.

However, if you refinanced your loans and qualified for a 10-year loan at 5% interest, you’d repay just $38,184.

By just refinancing your debt, you’d save over $3,700 in extra funds that can be used to increase your monthly payments and get rid of your debt sooner.

A Shorter Term
An alternative option is to simply refinance your Parent PLUS loans to a shorter total repayment term, coupled with your reduced interest rate. Shorter repayment terms also typically come with even lower rates, as an added bonus.

This method will set you up for faster repayment success. You’ll have a higher must-pay monthly payment, but also a much smaller total debt thanks to your lower rate — allowing you to ultimately pay less while putting you on course to shed your debt in less than 10 years.

.

Orginal Loan at
7.08% Interest

Refinance Loan
at 5% Interest

Loan Amount

$30,000

$30,000

Repayment Term

10 years

10 years

Monthly Payment

$350

$318

Total Interest Paid

$11,948

$8,184

Total Repaid

$41,948

$38,184

05

Refinancing Parent PLUS loans to child

An excellent benefit of refinancing Parent PLUS loans is the ability to refinance them from your name to your child’s.

If you took out Parent PLUS Loans to help your child pay for school, those loans are entirely in your name which can be a serious burden. That means you’re solely responsible for repaying them, and with high interest rates, the loans can be expensive and difficult to repay. Plus, having them on your credit report can affect your ability to qualify for other forms of loans, such as a mortgage.

If your child is doing well in their career and is earning enough money to take over the loans, you may be able to transfer the loans into their name through student loan refinancing.

By using this strategy, your child will then be responsible for the loan, and you would no longer be obligated to repay the debt — allowing you to focus on your other financial goals.

If your child has bad credit and doesn’t qualify on their own, you may also consider cosigning on a refinance loan with them. Some lenders, like PenFed Credit Union, offer both parent plus transfer capabilities as well as a cosigner release program, which could remove you from the loan after a certain period of time, after your child’s credit has improved.

06

How to choose the best Parent PLUS loan refinance option

Ready to easily find your top refinancing option?

Using our rate comparison tool , you can quickly tell which lenders are offering the best rate that is tailored to your financial profile — no teaser rates or “bait and switch” with Purefy.

You can use our sortable chart to see your best rates, and by entering your current loan details, you can compare monthly payments at the various term lengths on offer — whether you’re looking for a shorter or longer repayment term.

If you’re currently dealing with Parent PLUS Loans and a high interest rate, student loan refinancing can be a useful strategy to help you save money, reduce your monthly payment, or even to transfer them to your child.

We also have a team of personal loan advisors who are available to help you through the process. If you have any questions, you can contact us by phone at 202.524.1115 or by email at [email protected]