How to Refinance Parent PLUS Loans (2024)

Notice how the total interest paid keeps going down. New Loan A has a lower interest rate and saves you around $7,000. New Loan B has a lower interest rate and a shorter repayment term. This not only lowers the interest even more but also helps you pay off the loan faster. As you can see, refinancing can translate into big savings. That’s why it can be a great move for you.

How to Refinance Parent PLUS Loans

Decide if Refinancing Is Right for You

Before you begin the process of refinancing, you need to make sure that refinancing is right for you. Consider the types of loans you have. Are they private or federal loans? Think about your financial goals. Will refinancing now help you meet them? Finally, make sure you’re in a position where you’ll get better loan terms. It’s not worth it if you get similar or worse terms than before.

Can I Refinance Private Parent Loans?

Yes, you can refinance private parent loans. As long as you can get better loan terms, there are few downsides to refinancing your private loans. To qualify, you’ll need at least a good credit score and a stable income. A typical credit score that qualifies is at least in the high 600s, and the higher that score is, the better. Each lender will also have additional requirements that you must meet, so be sure to check on that.

Can I Refinance a Student Loan as the Cosigner?

While refinancing may take you off as a cosigner, you cannot refinance the loan. As a cosigner, you’re there more to vouch for the primary borrower. Even though you also take on responsibility for the loan, only the primary borrower is fully in charge of it. So, only they can start the refinancing process.

If you’re not looking to be a cosigner anymore, some lenders offer cosigner release options. Lenders will release cosigners after borrowers have made a number of on-time payments. Have your child check with their lender to see if they offer this.

Benefits of Refinancing Parent Loans

Regardless of your loan situation, refinancing your parent loans has great benefits. For one, you can save a lot of money on your loans. The earlier table showed how that was true. Yet, that isn’t the only benefit.

If you have multiple private student loans, you have the option to consolidate them when you refinance. That way, instead of making many monthly payments, you’ll only make one. Refinancing can also transfer the loan to your child. This will help them build a credit history and release you from the debt.

Student loan rates from our partners

Ascent

Minimum credit score

Varies

Fixed APR

Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 2/6/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.

4.13 - 15.46%

Variable APR

1 – Terms and Conditions Apply

Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.

2 – Cosigner Release

Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.

3 – Autopay Rate Reduction

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.

4 – AutoPay Discount & Lowest Interest Rate

4.39 - 10.39%

Variable APR

1 – Terms and Conditions Apply

2 – Cosigner Release

3 – Autopay Rate Reduction

4 – AutoPay Discount & Lowest Interest Rate

6.09 - 11.33%

Check rate

Earnest

Minimum credit score

650

Fixed APR

Earnest Private Student Loans are made by One American Bank, Member FDIC, or FinWise Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Finwise Bank, 756 East Winchester, Suite 100, Murray, UT 84107

Earnest loans are serviced by Earnest Operations LLC, 535 Mission St., Suite 1663 San Francisco, CA 94105, NMLS #1204917, with support From Navient Solutions, LLC (NMLS #212430). One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.

4.42 - 15.90%

Variable APR

5.62 - 16.20%

Check rate

College Ave

Minimum credit score

Mid-600s

Fixed APR

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

*The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation. $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 08/25/2022. Variable interest rates may increase after consummation.

This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursem*nt and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 2/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

4.43 - 17.99%

Variable APR

5.59 - 17.99%

Check rate

Insights, advice, suggestions, feedback and comments from experts

As an expert in the field of refinancing loans, I can provide you with information related to the concepts mentioned in this article. Refinancing loans can be a great move to save money and pay off your loan faster. Let's dive into the details.

Benefits of Refinancing Loans

Refinancing loans, such as Parent PLUS loans, can offer several benefits. One of the main advantages is the potential to save a significant amount of money on your loans. By refinancing to a loan with a lower interest rate, you can reduce the total interest paid over the life of the loan. This can result in substantial savings, as demonstrated in this article.

Another benefit of refinancing is the opportunity to consolidate multiple loans into one. If you have multiple private student loans, refinancing allows you to combine them into a single loan. This simplifies your monthly payments, as you only need to make one payment instead of multiple payments to different lenders.

Additionally, refinancing can transfer the loan to your child if they are willing to take on the responsibility. This can help them build a credit history and release you from the debt.

Deciding if Refinancing is Right for You

Before you begin the process of refinancing, it's important to evaluate whether it's the right decision for your specific situation. Consider the following factors:

Types of Loans: Determine whether your loans are private or federal. Refinancing federal loans may cause you to lose certain benefits, such as income-driven repayment plans and loan forgiveness options. However, refinancing private loans generally has fewer downsides.
Financial Goals: Assess your financial goals and determine if refinancing will help you achieve them. For example, if your goal is to save money on interest payments or pay off your loan faster, refinancing may be a good option.
Loan Terms: Ensure that you'll be able to secure better loan terms through refinancing. It's important to get a lower interest rate and favorable repayment terms. If you end up with similar or worse terms than before, refinancing may not be worth it.

Refinancing Private Parent Loans

You can refinance private parent loans, as long as you meet certain requirements. To qualify for refinancing, you'll typically need a good credit score and a stable income. Lenders usually look for a credit score in the high 600s or higher. However, each lender may have additional requirements, so it's important to check with them directly.

Refinancing as a Cosigner

If you're a cosigner on a student loan, you cannot refinance the loan yourself. Only the primary borrower has the authority to initiate the refinancing process. However, some lenders offer cosigner release options. This means that once the primary borrower has made a certain number of on-time payments, you may be released from your cosigner obligations. It's best to check with the lender to see if they offer this option.

I hope this information helps you understand the concepts mentioned in the article. If you have any further questions or need additional information, feel free to ask!