The 4 Best Parent PLUS Refinance Companies for 2018

refinance parent plus loans
By: Louis DeNicola

Supporting a child through college can be expensive, and some parents take out loans to help pay for educational costs. You may be able to do this by borrowing against your house, taking out private loans, or applying for a federal Parent PLUS loan.

Parent PLUS loans can offer borrowers a variety of benefits, and it could be easier for some applicants to qualify for a Parent PLUS loan than another type of loan with the same or better interest rate.

However, if you have a good credit history, good credit score, and little debt relative to your income, you may be eligible for a lower interest rate if you refinance a federal Parent PLUS loan with a private student loan.

Several private lenders offer a Parent PLUS refinance product, and SimpleTuition compared the loans’ features, terms, benefits, and drawbacks to identify some of the best options.

Table of contents

The best Parent PLUS refinance companies
Laurel Road
CommonBond
SoFi
Earnest
Should I refinance my Parent PLUS loan?
Alternatives to Parent PLUS loan refinancing
How we ranked Parent PLUS refinance companies

The best Parent PLUS refinance companies

We started the review and comparison process by identifying the 14 largest national student loan lenders and then narrowing down the list to the seven that offer Parent PLUS refinancing.

We scored each lender that offers Parent PLUS refinancing in 10 areas, with extra weight going toward interest rates, as that can be a particularly important factor when comparing lenders. We then identified the top four lenders based on the average scores. (You can read about the details of our analysis below.) In descending order, these four Parent PLUS refinancing companies got the best average score:

  1. Laurel Road
  2. CommonBond
  3. SoFi
  4. Earnest

Loan information

 

 

 

 

 

 

 

 

Ranking

Lender

Variable APR*

Fixed APR*

Terms offered

Balance range**

Soft credit check

1

Laurel Road

2.80-6.38%

3.50-7.02%

Five, seven, 10, 15 or 20 years

$5,000 to the full loan balance

Yes

Learn more

2

CommonBond

2.48-7.00%

3.20-7.25%

Five, seven, 10, 15 or 20 years

$5,000 to $500,000

Yes

Learn more

3

SoFi

2.80-7.54%

4.00-7.80%

Five, seven, 10 or 15 years

$5,000 to the full loan balance

Yes

Learn more

4

Earnest

2.57-5.87%

3.25-6.32%

180 terms, ranging from five to 20 years

$5,000 to $500,000

Yes

Learn more

*Rates are current as of July 17, 2018, and include a 0.25 percent autopay discount
**Minimum loan amounts may be higher in some states

 

Loan fees and features

 

 

 

 

 

 

 

Lender

Fees

Autopay discount

Can apply with a co-signer

Co-signer release available

Unemployment protection or forbearance

Laurel Road

No origination or application fees

 

Late fee is the lesser of $28 or 5% of the unpaid amount.

 

The non-sufficient funds fee is $20

0.25%

Yes

Yes, you can apply for release after 36 consecutive full payments

Yes, up to 12 months

Learn more

CommonBond

No origination or application fees

 

Late fee may be the lesser of $10 or 5% of the unpaid amount

 

Returned check fee may be $5

0.25%

Yes

Yes, you can apply for release after 36 consecutive full payments

Yes, up to 12 months at a time, and 24 months overall.

Learn more

SoFi

No origination or application fees

 

Late fee may be the lesser of $5 or 4% of the unpaid amount.

0.25%

Yes

No

Yes, up to 12 months

Learn more

Earnest

No origination, application or late payment fees

 

There may be an $8 fee for a returned payment.

 

Florida residents could have to pay a 0.35% stamp tax. Earnest collects the tax and sends it to the Florida Department of Revenue.

0.25%

No

No

Yes, up to 12 months

Learn more

Learn more about the top 4 Parent PLUS refinance companies

Private student loan companies may offer a similar product, but the terms, features, benefits and drawbacks can vary from one lender to the next. It’s always best to compare all your options before taking out a loan. To help guide you, we’ve highlighted some of the pros and cons of each lender below.

Laurel Road

Darien Rowayton Bank (DRB), a Connecticut-based bank, rebranded its online student loan division in 2017 and now offers student loans and student loan refinancing as Laurel Road. Although it didn’t advertise the lowest possible interest rates of our top lenders, Laurel Road’s overall loan offering led it to first place.

Why we like Laurel Road

No degree requirement. Some student loan refinancing companies require the applicant to have a college degree, even if you’re refinancing a loan you took out for a child. Laurel Road does not.

Available in every state. As part of DRB, Laurel Road offers Parent PLUS refinancing to residents of all 50 states and the District of Columbia.

There may be more loan terms. Although they’re not featured on the main page, in the FAQ, Laurel Road says you may be able to choose from any loan term under 20 years, as long as you meet the eligibility and underwriting criteria.

Where Laurel Road may fall short

Your child must graduate first. Before you can refinance a Parent PLUS loan, the child who you took out the loan for must graduate with a degree from an eligible Title IV program. Some other lenders, such as SoFi, let you refinance while your child is still in school.

Learn More About Laurel Road

CommonBond

CommonBond, an online lender, offers student loans and student loan refinancing, and has specific loan products for MBA students and parents who have Parent PLUS loans. The company began in 2011, and distinguishes itself with a social promise. For each loan that CommonBond funds, it also supports Pencils of Promise, a nonprofit that helps children in the developing world receive education.

Why we like CommonBond

Potentially low rates. When we did our research, CommonBond tied with Earnest for the lowest possible variable interest rate and offered the lowest possible fixed interest rate among the top Parent PLUS refinance lenders.

Hybrid-rate offer. CommonBond offers a hybrid loan term, which lets you lock in a fixed rate for your first 60 payments and then switches to a variable-rate for the remaining 60 payments (it’s only available with a 10-year term). It could be a good option if you can get a lower interest rate on a hybrid loan than a pure fixed-rate loan, but you will be taking on the extra risk of interest rates rising in the future.

Community events. In addition to its social mission, CommonBond gives back by hosting events for borrowers. The events can range from dinners to educational sessions, which often have a business or entrepreneurial focus.

Where CommonBond may fall short

Limited availability. CommonBond doesn’t offer student loan refinancing in Idaho, Louisiana, Mississippi, Nevada, South Dakota, or Vermont. You must also have at least a bachelor’s degree to be eligible for refinancing.

Here’s a full review of refinancing with CommonBond from our parent company, LendingTree.

Learn More About CommonBond

SoFi

SoFi is an online-only lender that offers student loan refinancing for parents and former students, student loans to parents, and several other types of loans. SoFi offers borrowers a variety of extra perks and has some of the lowest advertised interest rates. Although the minimum eligible credit score is 650, according to an analysis from BuzzFeed News, SoFi focuses on creditworthy high-income applicants. So, it may be difficult to qualify for the best rates without a strong credit score and debt-to-income ratio.

Why we like SoFi

No degree requirement. Like Laurel Road, SoFi doesn’t have a degree requirement for parents who are refinancing Parent PLUS loans.  What’s more, SoFi allows Parent PLUS refinancing while the student is still in school — many other refi programs require the student have a degree. If the child for whom you borrowed the loan is a full-time student attending school at certain Title IV accredited universities or graduate programs, the Parent PLUS loan may be eligible for refinance. Parents may also refinance their PLUS loans after their student graduates.

Membership benefits. Once you have a loan with SoFi, you’re eligible for their community benefits. These range from money-saving offers, such as a lower interest rate on other loans, to fun activities, like free happy hours and fitness classes. You’ll also have free access to a career counselor, who can help you move up in your current career or make a change to something new.

Where SoFi may fall short

No 20-year term option. Although you can choose from four different terms when refinancing with SoFi, it doesn’t offer a 20-year term option. A longer term could be desirable to people who want a lower monthly payment.

Nevada residents need not apply. While SoFi lends to borrowers in most states, residents of Nevada aren’t eligible for its student loan refinancing offers.

Can’t release a co-signer. You can apply for Parent PLUS refinancing with a co-signer, which is a plus as a co-signer may help you qualify for a lower interest rate. However, you can’t release a co-signer unless the co-signer passes away or you refinance again in just your name. If you apply with your spouse, and your finances are already intermingled, this may not be an issue. However, if you’re asking someone else to be a co-signer, you may want the option of taking on full responsibility for the loan in the future.

Learn More About SoFi

Earnest

Earnest is an online lender that offers student loan refinancing and personal loans. It distinguishes itself from other lenders with its merit-based underwriting, which is one of the potential perks of Parent PLUS refinancing with Earnest. In 2017, Navient, which was formerly part of Sallie Mae, acquired Earnest for $155 million.

Why we like Earnest

Merit-based underwriting. While your credit score is a factor in getting approved for refinancing and the interest rate you’ll receive, Earnest takes a variety of other information into account as well, such as your other outstanding debt and whether you regularly save. Even if you have a low credit score, if it’s at least 650, you may be able to qualify for a relatively low interest rate depending on your overall financial health.

Choose the best-fit loan term. Earnest lets you decide on a loan term that’s between five and 20 years. You can, therefore, select as short a term as possible (which can lead to a lower interest rate), while still having manageable monthly payments.

A variety of repayment options. Earnest also gives you options when it comes to repaying your loan. You can choose to make monthly or bi-weekly payments, can change your payment date via your online account, make extra payments throughout the month and even skip a payment every 12 consecutive on-time payments.

Where Earnest may fall short

No co-signer option. Earnest doesn’t allow you to add a co-signer to your loan application, which could make it more difficult to qualify.

Mixed availability. You don’t need to have a college degree to refinance a Parent PLUS loan.

However, Earnest doesn’t offer refinancing to residents of residents of Alabama, Delaware, Kentucky, Nevada, or Rhode Island. You also can’t refinance with a variable-rate loan if you’re a resident of Illinois, Minnesota, New Hampshire, Oklahoma, Tennessee, Texas, Utah, or Wyoming. You also can’t refinance Sallie Mae student loans, regardless of where you live.

Another potential restriction is that the student must have graduated, or be in his or her final semester at school, for you to refinance your Parent PLUS loan.

Learn More About Earnest

Should I refinance my Parent PLUS loan?

The two primary benefits of refinancing a Parent PLUS loan are lowering your interest rate and lowering your monthly payment. Depending on the term you choose, you might even be able to do both at the same time. Even if your monthly payment doesn’t decrease, by lowering your interest rate, you can save money on interest charges over the lifetime of your loan.

You can use the calculator on MagnifyMoney, also a subsidiary of LendingTree, to estimate your monthly payments and overall savings after refinancing.

The downside of refinancing

Even if a private lender offers you a lower monthly payment or interest rate, and you might be able to save a lot of money, consider some of the drawbacks of refinancing.

When you refinance, you’re replacing a federal student loan with a private student loan. In addition to not having as many benefits, you would lose access to potentially helpful federal student loan programs.

Alternatives to Parent PLUS loan refinancing

You may not be sure if refinancing your Parent PLUS loans is a good idea. Or, you might be having trouble qualifying for a lower rate than you’re currently paying. But if your current arrangement and payments aren’t working out, there may be alternatives to consider.

Comparing the federal repayment plans is a good place to start if you’re having trouble making payments. Another option may be an informal arrangement where your child helps pay part, or all, of your monthly loan payment.

Parents can also ask a child to refinance the Parent PLUS loan in the child’s name. Although the child will likely need to build up a healthy credit history and secure a good income to qualify, refinancing can move the legal responsibility for the loan payments to the child. He or she may also be able to consolidate federal or private student loans with your Parent PLUS loan. However, refinancing federal student loans into private student loans comes with many of the same drawbacks to refinancing federal Parent PLUS loans.

How we ranked Parent PLUS refinance companies

Here are the criteria we considered in our rankings: