How Parents Can Save With Student Loan Refinancing
Helped your child pay for college? Here’s how to save on your parent loans and put more money toward bigger goals.
With in-depth how-tos and plenty of actionable advice, we’re here to help you pay off your Parent PLUS or private loans — easily and quickly.
Learn all about an effective strategy for lowering your parent loan interest rates — refinancing — and if it could be the right repayment solution for you.
Parent Loan Refinancing:
Federal vs. Private
Refinance Parent Plus Loans
Parent PLUS Loans generally have the highest interest rate of all federal student loan options. It’s vital to have a plan in place to get rid of them as fastas possible — and save money along the way.
Refinancing to a lower rate could be the perfect way to do it.
Refinance Private Parent Loans
Have high interest private student loans?
Comparing your rate options and refinancing with a different lender could help you put more of your hard-earned money toward other goals, or get a new monthly payment you’re more comfortable with.
PARENT LOAN REFINANCING
You shouldn’t be stuck with high interest loans if you don’t need to be. That’s where refinancing comes in.
Taking advantage of a refinance can significantly reduce your current rate, allowing you to save money on interest costs or pay off your loans much sooner.
Explore and compare your best parent loan refinancing options, rates, and terms — all with one easy form and in one place. No credit check required.
PARENT LOAN REFINANCING
If you qualify for parent loan refinancing, there’s a lot to like.
- Save money on lifetime interest costs
- Shorten your repayment term to pay off your debt more quickly
- Lengthen your repayment term to have a smaller, more manageable monthly payment
- Merge all your loans into one — with just one monthly payment to manage
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Parent Loan Refinancing FAQs
Refinancing is when you take out a new loan through a private lender who pays off the remaining balance of your parent loans. This new loan consolidates all your parent loan debt into one new loan with a new interest rate, monthly payment, repayment term, and loan servicer.
Parent PLUS Loans typically have the highest interest rate of any federal student loan option. This rate is set by the federal government and is standardized across all parent loans regardless of your credit history, credit score, annual income, or debt-to-income ratio.
Because of their high interest rates, it’s crucial to think about refinancing to save significantly on interest costs and manage your loan debt much more easily. If you have good credit, it’s very possible to qualify for a substantially lower interest rate through refinancing — which can save you heaps of cash throughout the life of your loan.
A Parent PLUS loan refinance presents a unique opportunity to:
- Save money on interest costs by getting a lower rate.
- Pay off your loans more quickly by shortening your repayment term.
- Make your monthly payments lower and easier to manage by lengthening your repayment term.
- Have your child take over your monthly payments by transferring the loan into their name.
Yes — through refinancing, you can have the option of refinancing parent loans from your name into your child’s.
By doing so, your child would then be responsible for the loan payments and total debt, and you would no longer have the debt on your credit report. Not all lenders offer this option; PenFed Credit Union is one that does.
Refinancing through a private lender means that you’ll lose federal student loan benefits including deferment, forbearance, income-driven repayment, and Public Service Loan forgiveness.
If keeping one or more of these benefits is important to you, consolidating your Parent PLUS Loans through a federal Direct Consolidation Loan could be an effective alternative that still combines all your parent loans into one simple monthly payment.
However, refinancing is generally the only way to save money by getting a lower interest rate through your private lender of choice. Federal Consolidation, on the other hand, gives you a new rate that is the weighted average of all your current loans, rounded up to the nearest 1/8 or a percent.
Refinancing can be a good strategy for managing your loan debt if you have:
- A strong credit history
- A minimum of one education loan
- A steady income
If you meet these requirements, refinancing could be a powerful tool for repaying your Parent PLUS Loans with a lower interest rate.