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Should I Refinance My Student Loans?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Refinancing student loans is similar to refinancing other types of debt — you apply for a loan and use the money to pay off your existing loans. With student loans, the refinancing lender will generally send the money directly to your current loan servicers, and you’ll then start making monthly payments to your new lender.

You may be able to simplify your monthly payments by combining multiple student loans into one new loan. Refinancing could also save you money if you get approved for a lower interest rate than you’re currently paying, and you may be able to decrease your monthly payments depending on your loan’s rate and term.

10 questions to ask when deciding if you should refinance your student loans

There are many pros and cons to refinancing student loans, but everyone’s circumstances are different and there isn’t a universal answer to whether refinancing your student loans is a good idea.

What is certain is that once you refinance your loans you can’t undo the process — your old loan has been paid off, and you’re working with a new loan now. You may be able to refinance again, but you’ll never be able to switch back to your original terms.

To help you decide the best course of action for your situation, ask yourself the following questions. The answers can help you determine if you should refinance your student loans.

1. Do you have federal or private student loans?

A variety of institutions originate student loans, including the U.S. Department of Education and private banks. As a result, you may have federal student loans, private student loans or a mix of the two.

You may be able to refinance federal or private student loans, and you may be able to combine both your federal and private loans into one new private student loan. (Only private lenders offer refinancing.)

If you have federal student loans, one of the largest potential downsides to refinancing is that your new private loan won’t be eligible for federal student loan programs, including income-driven repayment programs, forgiveness, cancellation, forbearance, deferment and discharge options. Private lenders may offer some similar programs that allow you to delay making payments if you’re experiencing a hardship, but they don’t offer loan forgiveness programs.

If you have private student loans, replacing your current loan with a new private student loan may not be as difficult of a decision. However, you’ll still want to compare each lenders’ programs and benefits rather than solely comparing the interest rates and loan terms.

2. Do you plan on using a federal repayment plan?

Federal student loans may be eligible for up to five income-driven repayment (IDR) plans. In some cases, your monthly payment amount could drop to $0, and you can switch between plans for free at any time.

The IDR plans can be especially helpful for those who are having trouble finding work or are pursuing a career in a low-paying industry. In addition to making your monthly payments more affordable, with four of the IDR plans, the remainder of your loan balance could be forgiven after you make payments for 20 to 25 years.

If you’re on an IDR plan, or think being able to switch to an IDR plan could be helpful in the future, you may not want to refinance your federal student loans. After refinancing, your new private loan won’t be eligible for federal IDR plans.

3. Do you want to use a federal loan forgiveness or cancellation program?

Your federal student loans may be eligible for a forgiveness program, such as the Public Service Loan Forgiveness (PSLF) program or the Perkins loan cancellation program. Private student loans aren’t eligible for these programs.

If you’re considering one of the programs, you may want to research all the eligibility requirements, including which loans qualify for the program and the requirements for receiving forgiveness or cancellation.

Those who qualify, or who have already been making eligible payments towards one of the programs, may not want to refinance the loans that will be forgiven or canceled.

However, private student loans don’t qualify for the programs and there are different types of federal student loans, some of which may not be eligible for the program you’re pursuing. You may want to consider refinancing those loans.

4. Can you save money by lowering your interest rate?

Congress sets the interest rate on federal student loans, and if you previously took out a private student loan your interest rate could depend on the lender, your creditworthiness and your cosigner if you had one.

When you refinance your student loans, the interest rate of the new loan can also vary depending on your current creditworthiness, the lender and a cosigner.

Lowering your interest rate can save you money in interest payments over the lifetime of your loan and may lead to lower monthly payments depending on your new loan’s term (the amount of time you have to repay the loan).

If you’re only able to get approved for refinancing with a higher interest rate than you currently have, then generally it won’t make sense to go through with the refinancing.

5. What is your credit score?

Your eligibility for refinancing student loans, and the rate and terms you’ll receive, may depend in part on your credit score. Having a high credit score can help you get better rates and terms, and the best offers may go to those with a score in the good to excellent range (e.g., a FICO score above 670). Some refinancing lenders also have a minimum credit score requirement that you must exceed to be eligible for a loan.

If your credit score has increased since you first took out a private student loan, that may be an indication that you could qualify for a lower interest rate now. On the other hand, if it’s dropped, you may not qualify for a lower rate and might want to focus on building your credit and increasing your score before refinancing.

6. What is your income, and what other financial obligations do you have?

Along with a credit score, lenders may look at your income relative to your overall required monthly payments — your debt-to-income ratio. DTI can be an important factor in determining your eligibility for refinancing and your interest rate offer. If your rent or mortgage, loan payments, credit card bills and other monthly obligations make up a large portion of your monthly income, it could be more difficult to qualify for a good rate.

Applicants who have a high credit score and want to refinance their student loans but don’t qualify for a low rate may want to focus on paying down debts, decreasing other financial obligations and increasing their income before reapplying.

7. What could happen if you can’t afford your loan payments?

Federal student loans offer prescribed options for borrowers who have trouble making payments. You may be eligible for an income-driven plan, which can lower your payment amount. Or, you might be able to temporarily stop making payments by putting your loans into deferment or forbearance if you return to school, join the Peace Corps, lose your job, have a medical emergency or meet other criteria.

Although private student loan companies may offer borrowers some hardship options, they vary by lender, and some lenders determine eligibility on a case-by-case basis. If you think you may have trouble making payments later, and particularly if you don’t have an emergency fund to fall back on, you may want to hold off on refinancing your federal student loans.

If you do decide to refinance, carefully review different companies’ hardship policies. You may want to choose the lender with the most favorable or lenient policies, even if it isn’t the one that offers you the lowest rate.

To lower the risk of refinancing, you could choose to refinance at a longer loan term. Although a longer term could result in a slightly higher interest rate, it could also lower your monthly payments. You can always pay more than the required amount to pay off your loan early, but the lower required payment gives you more flexibility if you run into financial trouble.

8. Will you need a cosigner to qualify?

Applicants who have trouble qualifying for refinancing on their own may be able to add a creditworthy cosigner to their application. Even if you qualify on your own, having a creditworthy cosigner could help you get a lower rate.

You can ask any creditworthy person to cosign as long as they meet the lender’s eligibility requirements, although you may feel most comfortable asking a family member. That person takes on a risk by cosigning your loan, because they will be legally liable for the student loan if you don’t pay.

The liability could make it more difficult for the cosigner to qualify for financing elsewhere, and missed payments could hurt the cosigner’s credit. If you stop making payments altogether, both your and your cosigner’s credit could take major hits, and you both might start getting collection calls.

If you do need a cosigner to qualify, you could look for a student loan refinancing lender that offers a cosigner release. Here’s how it works: After making a series of full and on-time payments, you can apply to take over the loan. You’ll need to pass a credit check and qualify for the loan on your own, and if you do, the cosigner will be taken off the loan and you can continue with the same rate and terms.

9. What will the lender do if something happens to you or your cosigner?

With federal student loans, any remaining debt can be discharged if the borrower, or the student for whom a parent PLUS loan was taken out, dies or becomes permanently and totally disabled.

Some private lenders offer a similar arrangement to borrowers, but others may handle these situations on a case-by-case basis and don’t guarantee a discharge. If the debt isn’t discharged, you could be leaving your cosigner with a large bill to pay, or it could be taken from your estate.

Also, review the contract to see what happens if a cosigner dies or declares bankruptcy. In the past, it was a common practice for lenders to place a student loan in default when this happened, meaning you’ll owe the entire balance right away even if you had been making your monthly payments on time. Automatic defaults aren’t as common anymore, but it’s still something you should double check.

10. Which student loans should you refinance?

Based on your circumstances and answers to the questions above, you may find that you want to refinance some of your student loans and leave the others as is.

You may also be able to accomplish some of your goals, such as simplifying your monthly payments, by consolidating federal student loans. Consolidation allows you to combine multiple federal student loans into one loan, and you can choose which servicer you’d like to work with for your new loan.

However, consolidation is only available on federal student loans, and it won’t necessarily save you money, because your new loan will have the weighted average interest rate of the loans you’re consolidating. So if the largest loan you’re consolidating has a lower interest rate than the rates on your loans with smaller balances, the weighted average may produce a lower overall interest rate on your consolidation loan. On the flip side, if your loans with the largest balances also have the highest interest rates, you could actually end up with a higher interest rate on your consolidation loan.

If you decide to refinance additional loans later, or want to refinance all your loans together at some point, you may be able to do that as well. Even if you refinance all your loans now, you may want to refinance again if interest rates drop or your creditworthiness improves.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Louis DeNicola
Louis DeNicola |

Louis DeNicola is a writer at MagnifyMoney. You can email Louis at [email protected]

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College Students and Recent Grads, Student Loan ReFi

Best Private Student Loan Companies in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Taking out private student loans can be a relatively expensive ways to borrow for school, yet many college students make the mistake of turning to private loans too quickly. From 2015 to 2016, more than half (53%) of undergraduates borrowed from private lenders before maximizing their federal loan allotment, according to the Institute for College Access and Success.

On the other hand, federal loans can only go so far, especially if you are pursuing a postgraduate degree that requires more schooling. Once you’ve tapped out your federal aid, a private student loan could help you fill the gap.

While federal loans offer a relatively uniform application process and loan terms, private lenders’ terms can vary widely. If you’re thinking about paying for school with a private student loan, it’s vital to compare lenders’ offerings to find the one that’s best for you.

How we ranked the best private student loans

There’s a lot to review when you’re shopping around with private lenders. Your annual percentage rate (APR), fees and loan repayment term could impact how much you pay in interest over the lifetime of the loan. Other features — such as a straightforward application process and the option to request that a cosigner be removed from the loan — could also affect your repayment.

We started the search for the best private student loan companies by identifying the 10 largest national private lenders. Each lender’s undergraduate student loan was graded on eight critical factors:

  • Private lenders offer loans with varying interest rates depending on the applicant’s creditworthiness — or that of the applicant’s cosigner. Lenders advertise an interest-rate range that you can use to compare one with another.
  • In this case, each lender was assigned grades based on its lowest and highest APRs compared with the average lowest and highest APRs for all 10 lenders. Each lender received four scores (as they all offer variable-rate and fixed-rate loans), and the lenders with below-average APRs received top marks.
  • Lenders could charge application, origination and prepayment fees based on your loan balance.
  • Although fees are becoming a thing of the past, one of these 10 lenders (CommonBond) still charges a federal-like origination fee when the loan is disbursed.
  • All of the top 10 lenders offer an online application, but the clarity and ease of use can vary. The lenders with intuitive processes, plus pre-qualification offers, got the best grades.
  • Many private student lenders, including all 10 of the lenders we compared, offer a 0.25% interest rate discount if you enroll in autopay. A few lenders earned extra points for also extending a 0.25% interest rate discount to borrowers with a related bank account.
  • Most of the private student loans we compared offered several repayment terms with a maximum of 15 or 20 years. Lenders that feature fewer loan-term options didn’t score as well because they offer less flexibility to borrowers.
  • Most undergraduate students qualify for private loans thanks to a creditworthy cosigner, who can also help reduce the interest rate. Some private student loan lenders let you apply to release your cosigner after you make a given number of consecutive, on-time full principal and interest payments and pass a credit check. Setting the bar for a top score of only 12 payments was the shortest option available among the lenders we compared.
  • You may be able to choose from different repayment plans, such as making interest-only payments while you’re in school or fully deferring payments until your post-school grace period ends. Lenders that offer full interest and principal deferment received top marks.
  • A few lenders earned extra credit because they offer unique perks, such as a principal rate reduction or cash back when you graduate.

After assigning each lender a grade, we ranked them and selected the top five for our “Best Private Student Loan Companies” list.

Our top picks for private student loan companies

 

Sallie Mae

CommonBond

College Ave

Citizens Bank

Wells Fargo

Ranking12345
Variable APR4.25% to 11.35%3.74% to 9.72%3.99% to 11.98%3.99% to 11.64%4.80% to 10.72%
Fixed APR5.49% to 11.85%5.45% to 9.74%4.73% to 12.94%4.90% to 12.04%5.49% to 10.93%
Rate discount0.25% for autopay0.25% for autopay0.25% for autopay0.25% for autopay, 0.25% for having a Citizens Bank account0.25% for autopay, 0.25 to 0.50% for having a Wells Fargo banking or investment account
Origination feeNo Origination FeesYesNo Origination FeesNo Origination FeesNo Origination Fees
Repayment terms5 to 15 years5, 10 or 15 years5, 8, 10 or 15 years5, 10 or 15 years15 years
Cosigner releaseAfter 12 months of timely paymentsAfter 24 months of timely paymentsAfter half your term has elapsed and after 24 months of timely paymentsAfter 36 months of timely paymentsAfter 24 months of timely payments
PerkReceive study support, plus credit score trackingPause your repayment for up to 12 months after leaving school via economic hardship forbearanceReceive $150 bonus upon graduationReceive approval for multiple years of loans at onceN/A

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on Sallie Mae Bank’s secure website

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on CommonBond’s secure website

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on College AVE’s secure website

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on Citizens Bank (RI)’s secure website

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on Wells Fargo Bank’s secure website

*Rates are current as of Jan. 24, 2019, and may include a 0.25% autopay discount.

#1 Sallie MaeSmart Option Student Loan

Sallie Mae offers a wide range of student loans to undergraduate, graduate and professional students, as well as their parents. That may not come as a surprise though, since Sallie Mae is one of the most widely known private student loan companies. It opened its doors in 1972 as a government-sponsored company before privatizing in 2004.

  • Why it’s our top pick:
    • The undergraduate Smart Option Student Loan has a few standout benefits, such as the option to release a cosigner after making 12 consecutive monthly payments.
    • You can also choose from three in-school repayment plans: full deferment, $25 monthly payments or interest-only payments. And if you’re having trouble making payments after graduation, you can also request to make 12 interest-only payments.
    • Borrowers also get non-loan-related perks, such as quarterly access to one of their FICO credit scores, plus four months of academic support from Chegg.
  • Room for improvement:
    • Overall, Sallie Mae serves borrowers a variety of choices and benefits. However, it doesn’t offer as many potential discounts as some of the other top lenders. Still, if you find you qualify for a lower pre-discount rate with Sallie Mae than another lender, Sallie Mae could indeed be a smart option.
  • Fine print to watch out for:
    • Sallie Mae says it offers repayment terms between 5 and 15 years, but your repayment term depends on a variety of factors, including your loan amount. Unlike with other lenders, you can’t independently choose your repayment term.

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on Sallie Mae Bank’s secure website

#2 CommonBond

Founded in 2012, the student loan refinancing and lending firm CommonBond is perhaps the most giving among competitors. For every loan it funds, it pays for the education of a child abroad. That could among a number of factors that push CommonBond over the top when you’re considering where to borrow for college.

  • Why we like it:
    • Aside from its do-good ways, CommonBond also saves money for its borrowers. It offers for the most part, the lowest rates of any lender under consideration, plus the benefits found at most online-only lenders: a straightforward loan application, flexible repayment terms and responsive customer service.
    • Although it’s not the only lender to offer you the ability to pause your payments once you leave school, it’s also worth noting that CommonBond gives its members up to 12 months of forbearance. That could come in handy if you lose your job or fall on hard times once you’re out in the real world.
  • Room for improvement:
    • CommonBond offers low rates, but it also charges a 2% origination fee. Aside from matching Sallie Mae’s 12-month path to cosigner release, eliminating the fee is CommonBond’s biggest bugaboo. If you decide the lender is right for you, ensure you calculate the added cost of this 2% fee, which is a one-time charge based on your loan amount.
  • Fine print to watch out for:
    • Unlike federal student loan options for deferment and forbearance, CommonBond (like other private lenders) isn’t mandated to grant you a pause on your repayment. You would need to prove that your circumstances are dire enough to be considered.

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on CommonBond’s secure website

#3 College Ave

Founded by former Sallie Mae executives, College Ave is another online-only lender looking to disrupt the student loan industry. It lends to undergraduates, graduate students and parents, plus students attending career schools.

  • Why we like it:
    • College Ave is the only lender among the 10 we surveyed that offers four repayment term options (5, 8, 10 and 15 years). Interestingly, the company says 79% of its borrowers choose plans of 10 years or less, keeping additional interest from accruing during the life of repayment.
  • Room for improvement:
    • We penalized College Ave in our rankings for its slow path to cosigner release. If you agree to borrow on a 10-year term with the lender, you won’t be eligible to apply to remove your cosigner until after the five-year mark. All the other lenders we reviewed offer release within 12 to 48 months.
  • Fine print to watch out for:
    • College Ave contends it takes just three minutes to apply for a loan, but that merely determines whether or not you (and/or your cosigner) are eligible. After prequalifying, you could proceed to the more detailed application process.

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on College AVE’s secure website

#4 Citizens Bank

Citizens Bank is a large traditional bank with over 1,100 branches across 11 states. It offers student loans to undergraduates, graduate students and parents, as well as student loan refinancing.

  • Why we like it:
    • You might need to apply for a student loan at the start of each term. With Citizen Bank’s multi-year approval, however, you could choose to borrow additional money for another term without having to fill out a new application.
    • Also, if you or your cosigner have a qualifying bank account or loan from Citizens Bank, you could be eligible for a permanent 0.25% interest rate reduction on your student loan.
  • Room for improvement:
    • The primary drawback is the 36-payment requirement to apply to release a cosigner. Aside from that, Citizens Bank offers competitive rates, a variety of loan terms and interest-rate discounts that are in line or possibly better than many of the other private student loan companies.
  • Fine print to watch out for:
    • To qualify for cosigner release, you must also submit income statements to prove you can handle repayment on your own.

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on Citizens Bank (RI)’s secure website

#5 Wells Fargo

You’ll likely recognize Wells Fargo, as it’s one of the largest banks in the U.S., but you may not have realized that it offers student loans. It has several different programs, with offerings for community college students, undergraduates, graduates and professional school students.

  • Why we like it:
    • Like many other lenders, Wells Fargo offers a 0.25% interest rate discount if you enroll in autopay. Also, you can get a permanent 0.25% to 0.50% interest rate reduction if you or your cosigner have an eligible Wells Fargo student loan, consumer checking account or Portfolio by Wells Fargo relationship.
  • Room for improvement:
    • Put simply: You’re put in a box. You have to choose a 15-year term for your student loan. If you stick to making your required payment amount, you could wind up paying more in interest than if you took out a shorter loan elsewhere.
  • Fine print to watch out for:
    • Be sure that you make your first full payment on time. If it’s late, you’ll need to make 48 consecutive full payments (rather than 24) before you can apply to release a cosigner.

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on Wells Fargo Bank’s secure website

Determine if a private student loan is right for you

Using our rankings, you might be able to identify the private lender that offers you the best overall loan. However, it’s worth taking a step back to consider all your options before committing.

To do this objectively, come up with the list of criteria that matter most to you. They could vary from the eight criteria that we employed above — your list might emphasize a lender’s customer service, for instance.

When you’re comparing lenders with your criteria in mind, be prepared to weigh them as you see fit. You might not have a cosigner and therefore don’t care if a lender offers a fast path to cosigner release. In that case, you might look past top-ranked Sallie Mae — and its industry-best 12-month policy — to prioritize a lender that offers the lowest rates to independent borrowers.

Finally, confirm that you’re eligible to borrow from most private student loans banks, credit unions and online companies. You might find yourself disqualified, for example, if you’re an international student without a U.S. permanent resident cosigner. Lenders also generally require undergraduates to be 18, to attend school at least half-time and to have solid to strong credit — or to apply a cosigner who does.

Alternatives to private student loans

Almost always, federal student loans should be a borrower’s first choice if he or she has to borrow money. In part, this is because federal loans give you access to forgiveness programs, special repayment plans and guaranteed options to defer payments or put your loans in forbearance.

Also, if you haven’t built credit of your own and don’t have a creditworthy cosigner, federal student loans could be your only option. Most don’t have a credit requirement, and the federal loans for graduate or professional students and parents that do have a credit check don’t vary their interest rate based on your credit.

By contrast, even with a creditworthy cosigner, you may wind up with a higher interest rate if you take out a private student loan. Advertised interest rates can climb into the double digits, while 2018-2019 undergrads could access federal direct subsidized and unsubsidized student loans at 5.05%.

However, there may be times when a private student loan makes sense or could be a necessity. For example, undergraduate federal student loans have annual ($5,500 to $12,500) and aggregate (up to $57,500) borrowing limits that may not be enough to cover all your educational expenses.

Even if your unsure about whether you’re going to take out federal or private loans, complete the Free Application for Federal Student Aid (FAFSA) annually. In addition to being a requirement for federal loans and work-study aid, you may need to submit the FAFSA to qualify for some grants and scholarships.

Secure as much gift aid as you can before resorting to loans of any kind. After all, grants and scholarships don’t need to be repaid.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Louis DeNicola
Louis DeNicola |

Louis DeNicola is a writer at MagnifyMoney. You can email Louis at [email protected]

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Reviews, Student Loan ReFi

3 Best Parent PLUS Loan Refinance Options for 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

mortar board cash

Updated January 29, 2018

Are you a parent still repaying student loans you took out to help your children finance their education? While rising student loan debt totals are concerning for new graduates, Parent PLUS loans can mean similar trouble for older Americans trying to plan for retirement or meet other financial goals.

If you’re in this situation, consider refinancing your Parent PLUS loans to lower your interest rate and make the loan more affordable. Direct PLUS loans have had interest rates ranging from 6% to 8% over the last few years, but some refinance programs have rates as low as 2% to 4%, so there are potentially big savings to be reaped.

Below are three lenders we’ve found to be among the best Parent PLUS refinance programs currently available. We encourage you to check each one out to see which (if any) suit your needs the most, as well as to shop around with multiple lenders. All credit inquiries made within a 30-day period count as one inquiry in the eyes of the credit bureaus, so you don’t have to worry about dinging your credit score.

A Word of Warning on Refinancing

Thankfully, most student loan refinance programs and Parent PLUS refinance programs don’t have fees associated with the loan, so you may not need to worry about paying origination or application fees. However, you should do the math to make sure refinancing is worth the paperwork.

If you extend your repayment term, you’ll have a lower monthly payment, but you’ll pay more interest over the life of the loan. And if you’re trying to retire sooner rather than later, extending your term might not be to your advantage.

Beyond interest rates, you should also be aware that refinancing your federal Direct PLUS loan means giving up federal benefits. Private lenders don’t offer the same repayment plans or forgiveness programs, though some lenders are more flexible about repayment than others.

For example, you’ll no longer have access to the graduated, extended repayment or income-driven repayment plans. Private loans also aren’t eligible for Public Service Loan Forgiveness, and you won’t have access to federal forbearance or deferment, though some private lenders allow you to temporarily pause payments if you run into financial hardship.

If you haven’t been struggling with paying back your PLUS loans, then losing these benefits might not concern you, but it’s a factor to consider. And if you refinance your Parent PLUS loans and later run into financial hardship, make sure to speak with your new lender about any arrangements that can be made.

SoFi Parent PLUS Refinance Program

SoFi is one of the leaders in the student loan refinance industry, and it offers refinancing specifically for Parent PLUS loans.

  • Offers refinancing for a minimum of $5,000 up to the cost of attendance for your child’s school
  • Fixed APRs ranging from 3.49% – 7.62% (with autopay)
  • Variable APRs ranging from 2.43% – 6.59% (with autopay)
  • No application or origination fees, and no prepayment penalties
  • Soft credit inquiry with pre-approval; hard inquiry once you apply for the loan
  • Good credit required, but SoFi also takes employment and credit history into account
SoFi

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on SoFi’s secure website

Laurel Road Bank (formerly known as DRB) Parent PLUS Refinance Program

Laurel Road Bank also offers a Parent PLUS refinance program with low interest rates.

  • A minimum of $5,000 required to refinance, with no maximum amount
  • Fixed rates: 3.50% – 7.02% (with autopay)
  • Variable rates: 2.43% – 6.65% (with autopay)
  • Terms of 5, 7, 10, 15, and 20 years available, though borrowers can request a specific term under 20 years
  • Also offers hybrid loans (mix of fixed and variable rates), but you must inquire about it
  • Child needs to have graduated college and be professionally employed
  • No origination fee or prepayment penalty
  • Available in all 50 states
  • Soft credit check first, and then hard inquiry when you apply for the loan
Laurel Road Bank

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on Laurel Road Bank’s secure website

CommonBond Parent PLUS Refinance Program

CommonBond is dedicated to making the refinance process as simple as possible for student loan refinancing borrowers.

  • Maximum amount offered for refinance is $500,000
  • Fixed APRs ranging from 3.67% to 7.25% (with autopay)
  • Variable APRs from 2.50% to 7.24% (with autopay)
  • Hybrid APRs (5 years at fixed, then 5 years at variable) also offered
  • No application or origination fees, and no prepayment penalties
  • 5-, 7-, 10-, 15- and 20-year terms available (hybrid loans offered on a 10-year term)
  • Temporary loan forbearance is available if certain requirements are met
  • Soft credit inquiry first, then hard credit inquiry if you apply for the loan
CommonBond

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on CommonBond’s secure website

Keep in mind some lenders, such as SoFi, CommonBond, and Laurel Road Bank, offer the option to transfer your PLUS loans to your child. If your child can handle making the payments, you might take advantage of this opportunity to get the debt out of your name.

Although these three lenders offer some of the most competitive rates for refinanced Parent PLUS Loans, keep an eye out for other refinancing providers as well. You might find a different lender with even better rates and terms for your loan.

You can also check with your local credit union to see if they have any options available, but be sure the math works out in your favor, as some aren’t offering the best rates. Don’t forget — it’s worth shopping around to find the most savings!

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

Rebecca Safier
Rebecca Safier |

Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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